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Perspectives on China: Don't Expect a Sugar Rush

The longer-term narrative remains intact: urbanisation and the rise of the middle-class consumer
Consumption habits continue to move online but are fractionalising, moving at a fast pace to social network platforms
Longer-term growth risks remain around demographics and high public debt
Technology and infrastructure spending continue to frame growth opportunities
 

Getting on with urbanisation in the new global orderIn two we...

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Andrew Bascand | Posted on Sep 24, 2019
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4 sustainability trends from the latest company reporting season

Key points:

  • Sustainability disclosure has improved
  • Key focuses include climate change, diversity and waste
  • Real world impact alignment on the rise
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Jorge Waayman | Posted on Sep 13, 2019
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Harbour Outlook: Downside risks

Lead economic indicators continued to weaken and uncertainty around trade negotiations dragged on during September. It was against this uncertain backdrop that global equity markets fell 2.0% (in local currency). New Zealand equities held up comparatively well, down -0.9%, with higher yielding companies faring best after the RBNZ’s surprised 50bp cut to interest rates. Australia suffered the brunt of falling commodity prices, down 2.4% (in AUD)...

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Harbour team | Posted on Sep 6, 2019
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a2 Milk Steps Up Market Development

Source: Weekly Times

The a2 Milk Company reported on earnings last Wednesday. In spite of net profit 47% ahead of last year with a 41% increase in revenue, the market was disappointed by reduced margins, reportedly due to increased spending on marketing and, as a consequence, the price has fallen.

a2 spent more on marketing and product development than expected
We see this as building the foundation to be a global leader in ...

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Oyvinn Rimer | Posted on Aug 26, 2019
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Navigator: Inversion Irrelevance

The US yield curve briefly inverted last week, sparking predictions of recession
Whilst US activity is slowing, the prospect of recession is not borne out by the data
The NZ yield curve is not inverted, and inversion has not been a useful predictor of recession
NZ economic indicators are not signalling recession but global risks do provide a negative skew to RBNZ Official Cash Rate outcomes in the near term
US yield curve inve...

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Harbour Team | Posted on Aug 21, 2019
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Harbour Outlook: Lower and lower domestic interest rates

Key pointsThe trade tensions roller coaster continued during July. Hopes were initially raised with the announcement of further trade talks in China, though that hope turned quickly to despair as Trump announced further tariffs on Chinese imports.
The US Federal Reserve delivered its much-anticipated rate cut in July, just eight months after its last hike. The Fed’s view that this is a “midcycle adjustment to policy” disappoin...

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Harbour team | Posted on Aug 8, 2019
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Payments: The Disruption of a Two Trillion Dollar Industry

Key Points

The two trillion-dollar global payments industry is forecast to grow 9% p.a. through to 2022
Chinese companies are leading payments innovation and expanding globally
Disruption in the payments industry is being driven by technological and regulatory change
The global payments industry is one that sits quietly underneath the world’s economies. Generally, businesses facilitating payments have been very successful thr...

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Simon Momich | Posted on Aug 5, 2019
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Banks make a start on new capital

A new capital security issued on Tuesday night by Westpac Banking Corporation (Westpac) has highlighted the lack of higher-yielding opportunities available for New Zealand-based investors.

Banks fund the loans they make from deposits, bonds and shareholders’ contributions.  In Australia, that’s also the order in which funds are repaid in the event of default.  To go into further detail, there’s also a class of securities that...

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Simon Pannett | Posted on Jul 18, 2019
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Secular changes are benefitting global growth investing. Are they here to stay?

Key points:Since the Global Financial Crisis (GFC), growth stocks have outperformed value stocks significantly. This follows a long period of outperformance for value.
Whilst the “tech bubble” made some investors weary of technology and growth companies, valuation levels for tech companies today are significantly lower than 20 years ago. Further, investors should look at the earnings certainty of industry incumbents through th...

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Chris Di Leva | Posted on Jul 12, 2019
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Harbour Outlook: Finely balanced, markets walking a tightrope

Key points Trade tensions again dominated the headlines during June, while the “truce” reached at G20 summit mitigated some left-tail event fears, there is plenty yet to play out and the outcomes are likely to be non-binary. 
Trade tensions and a string of softer than expected economic data led global yields lower in June. 
In line with the global trend, domestic data erred on the side of disappointing with low PMI and busines...

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Harbour Team | Posted on Jul 5, 2019