Harbour Outlook: Moving into the political season
The Harbour Outlook summarises recent market developments, what we are monitoring closely, and our key views on the outlook for fixed interest, credit and equity markets.
Key developments
Globally, equity markets bounced back in April, with concerns abating from earlier in the year on global inflation risks, trade wars, political threats to the tech sector, and funding pressures. In particular, global markets were comforted...
The state of Infant Milk Formula in China
Harbour Senior Research Analyst Oyvinn Rimer recently took a trip to China, to investigate the state of the Chinese consumer milk market.
Disclosure: Harbour owns a2 Milk in a number of portfolios.
Having regularly visited China for a decade now, it never ceases to amaze me the sheer scale and speed of their development. Despite frequent visits, there are always noticeable changes to the land and cityscapes.
Two weeks ago, ...
The Changing Face of the New Zealand Credit Market
Over recent years the New Zealand credit market has been going through something of a quiet revolution. The borderline between bank lending and fund management is becoming blurred. Fund managers are stepping into areas traditionally dominated by banks, as regulatory reform has imposed higher capital costs on banks. Fund managers are broadening their investment choices and the range of bonds issued has become more varied. There...
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Trade, tech and funding tensions
Key developments
Globally, equity markets were weak over March, with most overseas markets down between 2-3% over the month.
After experiencing worries about rising inflation and the removal of monetary stimulus in January and February, in March equity investors were rattled by the Trump-led US government’s aggressive approach to trade negotiations and potential increased regulation of the technology sector. In addition, wh...
Banking sector under the spotlight
An Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry has started to hear evidence. The so-called Hayne interim report into banking misconduct won’t be issued until 30 September though, unlike previous reports into the banking system, this inquiry is in the full public glare and, with more than 3,000 submissions, we can expect Justice Hayne to highlight further evidence o...
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How active management can provide a solution to technological disruption
The impact of technology is one of the most exciting aspects of being a professional investor. Technology can enable a business to significantly enhance its service offering, improving customer service and hopefully making an increased profit along the way – a win-win.
Disruptive technology, however, is when technology, or the convergence of multiple technologies, is sufficiently powerful enough to disrupt existing companies ...
A New Reserve Bank Governor and Policy Targets Agreement
Adrian Orr started yesterday as the new Governor of the RBNZ, and earlier this week, signed a Policy Targets Agreement (PTA) with the Minister of Finance, Grant Robertson. As widely expected, the announcement included many of the outcomes of Phase 1 of the Government’s RBNZ Review; reaffirming the RBNZ’s position as a flexible inflation targetter; adding a dual mandate of “supporting maximum sustainable employment”; and, shift...
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Trade Wars...Or Negotiations?
While many of the details of the US Government’s proposed trade tariffs directed at China (aimed at reducing the US’s trade deficit with China) and China’s reciprocal tariffs, are yet to be made public, the immediate response is to increase uncertainty for investment markets.
Investment markets have initially interpreted a break out of a trade war as being negative for growth and as being inflationary.
In Harbour’s view, the...
Quantitative or qualitative equity research?
At Harbour, we believe it is best to use a mixture of quantitative and qualitative equity research to make investment decisions. Quantitative research is used as a filter to break down the investment universe, pick potential outperformers and underperformers, and support analyst and portfolio manager views with tangible numbers. Our qualitative research looks at a firm’s business model, competitive advantage, corporate governa...
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Rising Volatility
The Harbour Outlook summarises recent market developments, what we are monitoring closely, and our key views on the outlook for fixed interest, credit and equity markets.
Key developments Following on from the same themes in January, markets continued to see strong global economic growth in February, but worried about the top risk on our list for 2018 – namely inflation risk and ultimately concerns about whether monetary sti...
