Findings from Harbour's carbon emissions research project
Key points
- 26 companies of the 55 studied disclosed emissions data (47%)
- There was wide variation in the quality of disclosure from companies
- Of the companies that disclosed, 52% had emissions on a decreasing trend
- Most companies record their emissions themselves and have no third-party verification
- Technological advancement is key with innovation in electrification, carbon capture and storage, and software solutions
- The Zero Carbon Bill, the Paris Agreement and the Emissions Trading Scheme are all important policy settings aimed to help decrease carbon emissions
- The Task Force on Climate-related Financial Disclosures (TCFD) recommendations are an increasingly popular framework for companies worldwide to report against, to ensure their climate change disclosure is meeting the needs of their investors.
Calling time on TDs?
Traditionally, term deposits have been a popular strategy for many retirees and Kiwis who weren’t quite sure about how to choose or access other investments.
What has happened with term deposits?Around 11-12 years ago, before the Global Financial Crisis (GFC), New Zealand’s Official Cash Rate was sitting at 8.25%. The official cash rate tends to influence the rates which banks offer on, amongst other things, Term Deposits. A...
Harbour Outlook: Risks reduced but not removed
Key points
- Global equities outperformed bonds in October as trade risks abated, US earnings impressed and central bank easing supported sentiment.
- The economic outlook for Australasia improved and the associated higher interest rates reduced the value of fixed income assets. Equities underperformed their global counterparts due to sectoral weakness in electricity, banking and materials stocks.
- We retain a degree of scepticism in the macro outlook. The global backdrop has improved but remains fragile. Domestically, large amounts of monetary stimulus have been delivered but confidence is poor and activity soft.
- This environment should favour growth stocks where Harbour equity portfolio exposure is concentrated alongside maintaining exposure to several defensive investments. Within fixed interest portfolios, we reduced duration in October but remain long relative to benchmark given soft economic activity and residual risk.
Electricity demand smelting away?
Key points
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The probability of closure versus 2013 has increased
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Weak commodity prices, energy and transmission costs are the main issues
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As in 2013, the electricity industry may bow to Rio Tinto’s pressure, but possibly not the Government this time
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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
Key points
- 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...
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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
Key points:
- Sustainability disclosure has improved
- Key focuses include climate change, diversity and waste
- Real world impact alignment on the rise
