Harbour Navigator: Weak QSBO points to lower rates ahead
Weak QSBO points to lower rates ahead
The Q2 QSBO was a sobering read as it corroborated other indicators that suggest the New Zealand economy has taken a sharp turn for the worse in recent months.
The survey indicated a trifecta of rapid labour market easing, contracting economic activity and markedly reduced inflation pressure.
We expect the RBNZ to take note, likely delivering a more balanced message at next week’s Jul...
Harbour Navigator: Back on the ground in China
Consumer sentiment in China remains cautious post-pandemic, with spending reluctance despite crowds being back to normal.
Demographics are shaping long-term views of consumption and investing, with the UN’s central forecast projecting China’s population to halve over the next 75 years.
Policy initiatives will be closely watched to see whether these can offset the structural changes occurring and, of course, a cyclical recovery...
Harbour Investment Outlook: Treading water amid uncertainty?
Key market movements
MSCI All Country World Index (ACWI) was stable in May with a return of 0.2% in New Zealand dollar-unhedged terms for the month. Returns in NZD-hedged terms were considerably better at 3.7% after a combination of US dollar weakness, and New Zealand dollar strength on the back of supportive Chinese policy. Performance (unhedged) was mixed from a sector perspective, with only information technologies, utiliti...
Harbour Investment Outlook: Choppy waters ahead
Key market movements
After a strong first quarter, the MSCI All Country World Index (ACWI) fell in April with a return of ‑2.3% in New Zealand dollar-unhedged (-2.7% in NZD-hedged) terms for the month. Performance was broadly negative from a sector perspective, with only the utilities and energy sectors in the black. Information technology was a standout on the negative side with a -5.6% return.
Locally, market returns for the...
Harbour Navigator: Global Divergence
After years of most of the world sharing the common sudden stop and recovery associated with COVID-19, there are now significant differences in economic prospects across countries. These differences have led to some central banks lifting policy rates (à la Bank of Japan) while others, such as the European Central Bank, US Federal Reserve and the Bank of England have hinted at cuts. The Swiss National Bank has gone one step fur...
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Harbour Navigator: Hot sheds - Growth in data centre demand and the real estate investment opportunity.
Global demand for data centre space is set to increase significantly and the compute density of GenAI significantly increases the electricity required to keep computer capacity cool.
Real estate is a key determinant of a successful data centre, with data centres having specific locational requirements making land with access to electricity a crucial enabler for data centres.
In our opinion, the DC megatrend tail wind may remai...
Harbour Investment Horizon: Long Term Investment Return Assumptions
Summary
Investors anchor long-term strategic asset allocation by considering a range of assumptions for key asset classes
Harbour’s long-term return assumptions are one of many inputs into considering strategic asset allocation across multi asset portfolios, such as conservative, balanced and growth mandates
Our return assumptions are market valuation aware and, as a result, our most recent forecast is for a narrowing in th...
Harbour Investment Outlook: Turning Point for Earnings?
Key market movements
The MSCI All Country World Index (ACWI) rounded off the first quarter with a third positive monthly return at 5.1% in New Zealand dollar-unhedged (3.5% in NZD-hedged) terms for the month. From a sector perspective performance was broadly positive, with energy the outstanding performer at 7.6%, followed by materials (5.5%) and utilities (4.8%).
Locally, market returns for the month were also strong with t...
Harbour Navigator: Bank share price surge- sprinting ahead?
The touchstone for Australasian banking sector trends is the Commonwealth Bank of Australia (CBA), and CBA’s recent share price surging towards $120 has provided another catalyst for many to ask about the outlook for bank share price performance. For equity analysts, we think about the price to earnings ratio as an indicator of valuation; CBA’s has now topped 21 times expected earnings, a mark that most analysts say make the b...
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Harbour Navigator: Bank competition - Innovation trumps more capital
The Commerce Commission’s draft market study into New Zealand’s personal banking services made 17 recommendations which, if implemented, would likely have some impact on bank competition.
But they likely entail compromises to financial stability
In Australia, Macquarie Bank’s highly digitized banking solution offering has reinvigorated competition in the deposit and mortgage markets.
The learnings from this Australian experien...