Electricity demand smelting away?
The probability of closure versus 2013 has increased
Weak commodity prices, energy and transmission costs are the main issues
As in 2013, the electricity industry may bow to Rio Tinto’s pressure, but possibly not the Government this time
Higher volatility in share prices and wholesale electricity prices is likely near term
Responsible investing - have your cake and eat it too
Increasingly, we have found that people are asking us about responsible or ethical investing.
This interest comes from two different generations of investors. The baby boomers tend to be retired (or approaching retirement) and they remember the hippie era; their focus is on leaving a better world for their children and grandchildren. Millennials are in their late 20s and early 30s and are really starting to hit their economi...
Harbour Outlook: Deteriorating Data
- Trade developments continued to whipsaw markets during September. The optimism instigated from a planned resumption in trade talks was soon dampened after a planned visit to US farms by Chinese officials was cancelled. Sentiment recovered later in September in anticipation of October’s round of negotiations.
- Global economic data generally came in weaker than expected during September, though some Chinese data did buck the trend of weak data prints.
- Domestically business confidence surveys have continued to weaken. NZIER’s Quarterly Survey of Business Opinion (QSBO) showed a decline in firms’ own trading activity with a net 11% of businesses reporting demand fell over the quarter, the weakest level since September 2010.
The move to the public cloud accelerates
We try to attend at least one global technology conference each year to keep abreast of latest developments, market trends and hot topics. Over the last five years, speakers have focused on many exciting areas with large market growth potential (covering online migration and SaaS business models disrupting the old world), consumers going mobile, big data and Artificial Intelligence (AI), and the Internet of Things (IOT) to nam...READ MORE
NZ Monetary Policy: Diminishing Returns
The Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) at 1.0% at its OCR Review this week, surprising the market with a rather sanguine tone, given the deteriorating global backdrop.
The RBNZ noted that both fiscal and monetary policy have scope to provide additional stimulus.
As the OCR plumbs new lows, questions are being raised over the efficacy of additional rate cuts.
This note highlights potential i...
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...
4 sustainability trends from the latest company reporting season
- Sustainability disclosure has improved
- Key focuses include climate change, diversity and waste
- Real world impact alignment on the rise
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)...READ MORE
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 ...
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...