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...
Payments: The Disruption of a Two Trillion Dollar Industry
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...
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...
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...
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...
Sustainability is Good for Returns
Harbour has been a signatory to the UN Principles of Responsible Investing since 2010 and is also a member of the Responsible Investing Association of Australasia.
Harbour is adding sustainability as an investment mega trend in our equities process
We continue to find integration of ESG factors is a positive factor for returns
An additional overlay of sustainability as a mega trend influence may provide better interaction an...
Interest Rates Race to Zero?
Yields on fixed interest securities, which have been falling sharply all year, took another surge lower last week. The 5-year swap rate, a good proxy for market rates in New Zealand reached 1.36%, down from 2.20% at Christmas 2018 and 2.65% a year ago. That’s a record low level for NZ bond yields. The primary catalyst last week was a signal that the US Federal Reserve is close to cutting rates. They are joining the central ban...READ MORE
Responsible investing and equity returns
There is a growing awareness that stock returns are influenced by Environmental, Social and Governance (ESG) considerations. As a long-term proponent of incorporating ESG factors into our assessment of companies, Harbour is delighted to have been involved in Armillary Private Capital’s annual review of returns of the NZ listed sector for 2018 that was released last week.
This is Armillary Capital’s ninth annual Return on Cap...
Harbour Outlook: Trade tensions impact global growth
Global equity markets retraced from their highs in May with the MSCI World index (in local currency) returning -6.0%. Risk aversion picked up almost entirely due to the breakdown in trade talks between the US and China. This resulted in the US increasing tariffs on US$200 billion of Chinese goods; China promptly retaliated.
New Zealand and Australian equities weathered the volatility in global markets well...READ MORE
5G to enable new technology platforms
Investors need to factor in the opportunity and potential disruption of new technology and changing consumer preferences for mobile and fixed broadband communication. Fifth generation mobile networks (5G) provide a transformational shift in the telecommunications landscape. Why is this change so important?
It enables new technologies, like driverless cars, mobile medicine, the Internet of Things
It may accelerate the transiti...