Harbour Navigator: Postcard from China - The eCommerce growth model

I visited China last week and met with companies and commentators to dig beneath the data and get a sense of the current issues.

We visited many malls and shopping centres. In particular we went to mother and baby stores to experience the consumer in action, and witnessed the new eCommerce model. We also visited “wet markets”, hired bicycles with WeChat, and saw progress with a2’s new Chinese-labelled product. We saw first-ha...

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Andrew Bascand | Posted on Sep 14, 2018

Harbour Outlook: Crisis of confidence

It was a strong month for absolute returns in New Zealand asset classes in August, with the NZX50 sharemarket index rising around 4.4% and the NZ Government bond index generating a return above 1.2%.   This strong performance of financial markets sat in sharp contrast to the continued weakness of New Zealand business confidence, which is shaping the political and policy-making environment. 

As usual there was a laundry list of global developments highlighting the ongoing risks to the global backdrop:  heightened US trade tensions, this time with Canada; wobbles in the Italian banking sector and sovereign bond market; emerging market strains in Turkey and Argentina; and political changes in Australia generating the 5th prime minister in five years.  Despite these developments and headlines, global macroeconomic data, particularly in the United States, continued to show a picture of solid actual economic activity running near economists’ expectations...

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Harbour Team | Posted on Sep 10, 2018

Continued growth of responsible investment in New Zealand

The Responsible Investment Association Australasia (RIAA) has recently published their fourth annual New Zealand Responsible benchmark report[i] that shows the size and growth of responsible investing in New Zealand over the 2017 calendar year. 

Harbour is delighted to have been included for the third consecutive year as one of four domestic asset managers that are using a leading approach to Environmental, Social and Governa...

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Jorge Waayman | Posted on Aug 23, 2018

Harbour Investment Horizon: Fiscal Policy Outlook

There is growing coverage in the media that a slowing economy could force a fiscal tightening to stay within the government’s fiscal responsibility rules.
There is little evidence that the market is concerned with this risk, with the New Zealand government bond yields trading below the US for the first time in 25 years.
While providing important political discipline, there is also some flex in the fiscal responsibility rules, ...

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Christian Hawkesby | Posted on Aug 17, 2018

Harbour Navigator: Regime Change at the RBNZ

The path of least regret for the RBNZ appears to be letting core inflation rise above 2%.
A broad interpretation of the mandate motivates actions to support growth and business confidence.
As the new regime beds down there may be more volatility in the rates and FX market, with a new voting committee still yet to come in 2019.
In last week’s Monetary Policy Statement (MPS), the RBNZ surprised markets by shifting the projected ...

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Harbour Team | Posted on Aug 14, 2018

Harbour Outlook: Slowing growth and rising inflation

Key developments

In recent months, we have highlighted how the New Zealand economy and markets seem at a crossroads, with a moderation in domestic economic activity whilst cost pressures appear to be rising. With further evidence of this scenario playing out in July, we look into the implications for the rates market through monetary and fiscal policy, as well as the impact on New Zealand equity valuations.

But first, looki...

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Harbour Team | Posted on Aug 7, 2018

Harbour Navigator: Deflationary risks in New Zealand abating

A key theme for the New Zealand economy in 2018 has been the potential crossroads facing the economic outlook. For the past 5 years, we have seen strong economic activity and low inflation keeping interest rates low and asset prices high. However, looking forward there are signs that economic activity is moderating at the same time as inflation pressures are emerging.

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Christian Hawkesby | Posted on Aug 1, 2018

Tariff Wars

A muted global market reaction so far?

With no further escalation, the implications for New Zealand from the current US-China tariff war are likely to be limited. Any escalation, however, will have a significant impact on global growth, company earnings, the stock market and the general appetite for risk. Already, some sectors may be more impacted via supply chain disruption, competitive pricing changes and the economic spill...

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Andrew Bascand | Posted on Jul 24, 2018
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Harbour Outlook - Activity moderating and costs rising

Key developments

In recent months we have highlighted how economies and markets seem at a crossroads. In June, there was further evidence of an upcoming moderation in domestic economic activity whilst cost pressures appear to be rising. Looking forward, this is a theme that remains near the top of our list of what to watch most closely on the horizon.

Looking back over June, while some macroeconomic data in Europe and Asia ...

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Harbour Team | Posted on Jul 9, 2018
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Investment Horizon: Interest Rate Cycles - Endings and Beginnings

As expected by the market, the US Federal Reserve lifted the US Fed Funds Rate this week to 1.75%-2.00%.  This was the second hike in 2018 and a continuation in a cycle that began in late 2015.  In a post-GFC environment where interest rates are eventually expected to settle at lower levels, it’s natural to ask how far away the US Federal Reserve is to the end of its interest rate cycle.  At the same time, in New Zealand, the ...

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Harbour Team | Posted on Jun 14, 2018