Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
TSB has cut fixed rates, basically to ASB levels. The Police Credit Union, and Heretaunga Building Society have also cut fixed mortgage rates. All rates are here. In case you missed it late on Friday, Bluestone Mortgages said it was quitting New Zealand, unable to find a workable niche that could meet its scale requirements. They follow Resimac.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ has cut all of its TD rates for terms 6 months and longer. The Police Credit Union, and Heretaunga Building Society have also cut TD rates. All updated rates less than 1 year are here, for 1-5 years, they are here. This review might be helpful.
RISING AT A GOOD CLIP
KiwiSaver assets are up +15.1% in June 2024 from the same quarter a year ago. While that is a heady gain, it is nowhere near the +26% rise in the year ended June 2021. Of course some of this is an increase in contributions, $12.3 bln in fact. But there are other withdrawals (FHB and hardship, along with retirees cashing out) so it is not possible to calculate a system-wide return from the RBNZ and IRD data. We can only rely on the fund manager reports.
IN DECLINE
Life insurance assets are actually falling, especially their New Zealand assets.
FHBs AT CAPACITY
RBNZ data shows that FHB's are stall taking our news loans at about the $550,000 level, an amount that hasn't really changed since May 2021. But of course house prices have. The median house price is down -7.7% over that same period while the first-quartile house price is down -4.1% over the same period. Interest rates in May 2021 were 2.5% while they are now 6.1%.
NZX EQUITY MARKET UPDATE
Check out our new quick update of how the NZX is faring today, as at 3pm. We welcome comments on that update story. Updates to annual results were released today for both Chorus (CNU, #16) and Property for Industry (PFI, #27) and they are updated in our profiles.
ANOTHER INSURER POSTS HIGHER PROFIT
Health insurer nib New Zealand said operating profit was $21.2 mln in FY24, down from $33.4 mln in FY23. Insurance revenue was $402.1 mln in FY24, from $367.6 mln in FY23, up +9.4%, due to policyholder growth and premium increases.
WILLFUL BLINDNESS RESULTS IN BIG FINE
Hamilton-based dairy company, Milkio Foods, has been fined $420,000 for misleading customers about the origin of some of their ghee dairy products with claims like “100% Pure New Zealand” despite importing the core ingredient from India. The matter was first identified by MPI and prosecuted by the Commerce Commission. The company is majority owned by Rajesh Chatterjee.
POSITIVE FEEDBACK
Banks and insurers continue to rate the RBNZ positively, according to the 2024 Relationship Charter Survey. In this year’s survey, 92% of registered banks, 81% of licensed insurers, and 94% of licensed non-bank deposit takers, NBDTs, rated their relationship with the Reserve Bank ’good’ or ‘very good’.
BOLSTERING CAPITAL WITH PERPETUAL PREFERENCE SHARES
Westpac NZ is the latest big bank to signal it will fundraise to bolster its capital position. It signaled an offer of $100 mln (with the ability to accept unlimited oversubscriptions at it’s discretion) of perpetual preference shares which are expected to constitute Additional Tier 1 Capital for regulatory capital requirements. They follow BNZ who did something very similar recently.
COURT SAYS UBER DRIVERS ARE EMPLOYEES. REALLY?
The Court of Appeal has dismissed Uber’s appeal of the Employment Court’s 2022 verdict that ruled Uber's control over the work environment and terms of employment effectively made them employees. It is a ruling that might affect many workers hired as contractors. All eyes now turn to Brooke van Velden as Workplace Relations minister who has shown an interest in this case and its implications.
SWAP RATES ON HOLD
Wholesale swap rates are probably little-changed today. Our chart below will record the final positions. The 90 day bank bill rate is down -2 bps at 5.22%. The Australian 10 year bond yield is down -3 bps at 3.92%. The China 10 year bond rate is down -1 bp at 2.16%. The NZ Government 10 year bond rate is up +2 bps at 4.27% and the earlier RBNZ fix was at 4.18% and down -3 bps from Friday. The UST 10yr yield is down -2 bps from yesterday at 3.79%. Their 2yr is now at 3.90%, so that curve has now tightened up, inverted by just -11 bps.
EQUITIES MIXED
The NZX50 is up +0.4% in late Monday trade. The ASX200 is also up +0.4% in afternoon trade. Tokyo has opened down -1.1%. But Hong Kong is up +0.9% at its open. Shanghai is down -0.2%. Singapore is unchanged at its open. Wall Street looks like it will open tomorrow with a modest +0.3% on the S&P500 according to current futures trade.
OIL LITTLE-CHANGED
The oil price is unchanged from this morning at just over US$75/bbl in the US, and at just over US$78.50/bbl for the international Brent price.
CARBON PRICE FIRMISH
Today the carbon price rose by a marginal +75c today, now at $60.50/NZU today. But that takes it to its highest level since mid-March 2024. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD UNCHANGED
In early Asian trade, gold is holding from this morning at US$2512/oz.
NZD HOLDS
The Kiwi dollar is down -10 bps from this morning, now at 62.2 USc. Against the Aussie we are unchanged at 91.7 AUc. Against the euro we are still at 55.6 euro cents. This all means the TWI-5 is now at 69.8 and marginally lower.
BITCOIN HOLDS HIGHER
The bitcoin price is down -0.2% from this morning, now at US$64,020. Volatility of the past 24 hours has been low at just on +/- 0.9%.
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61 Comments
This one?
"Vendor Paid $1.02M and Now Selling $549,000"
https://www.trademe.co.nz/a/property/residential/sale/auckland/auckland…
Normally they try to price them so once fixed you break even, so you may have to stump up 500k.....
You get the best buys for these if the Body Corp has to take legal action to recover the ammount needed, and by then you know what is total $$$.
Be Slow, but they can be great buys.
I have owned a few villas where the north side weatherboard needed replacing due to constant sun cycles causing water ingress to blow it apart.... so you pull the old WB off and the Kauri framing is as good as new.... nothing between anything no building paper plenty of air movement etc, so as well as no eves, crap cladding , that excuse we could use SHITTY H1.2 framing as it would never get wet was what caused the boat to sink (and leaving the hatches open)
I have a love hate relationship with villas as I have owned a few in the Pon.
so why where we allowed to use such shit poorly treaded framing....
Because we put faith in the exterior design and cladding.
North facing weatherboards are fine if maintained (properly). Much of the damage occurs going from wet/dewy to full sun in the mornings. Maintenance should be done every 10 years, or less if they're a dumb colour. If they're allowed to deteriorate the grains will open and then it's up uphill battle.
I spend a bit of time abroad and I have never encountered, nor heard of, a "leaky building".
What sort of +"##ery did we allow here with our code and products?
We decided to change from making the sorts of houses that worked well with our climate, to ones from other climates that don't get the same amount of rain and humidity.
BW
Check this one out
https://www.trademe.co.nz/a/property/residential/sale/waikato/hamilton/glenview/listing/4861001137
Or this one
https://www.trademe.co.nz/a/property/residential/sale/waikato/hamilton/…
This ones a little cheaper
https://www.trademe.co.nz/a/property/residential/sale/waikato/hamilton/…
(1) Why are they selling? We don't know. But because they expect prices to rise is unlikely to be one of them, and (2) Given the RV's and the surrounding hype, do you really think they'll go for $550k + 5% Deposit? (The FHBer bait).
You know my view. Take this opportunity of lower rates/ enthusiasm/ whatever - to sell.
Caveat emptor.
Bw different topic mate,
I'm talking about how FHB will still take out loans bigger than they need to even if house prices come down.
If you read the comment at the start of the thread, I'm saying you can get a decent house with a 500K loan, 20% deposit, so why do FHB Still take more than they need.
So those 99 years leases can now be upgraded to 198 year leases? Meanwhile in Europe Negative Power Prices Hit Europe as Renewable Energy Floods the Grid. European power markets are experiencing a notable shift as renewable energy sources, particularly wind and solar, become a larger part of the energy mix due to renewables Europe is now having negative power prices.
Mind you , Labour are asleep at the wheel too. They could point out gas exploration could have taken place in any of the 31 gas permits still active in 2018, covering an area the size of the North island. The last of these permits expires in 2030, any one of them could have allowed mining for 40 years.
A contractor under the current law is not reliant on one customer, rather has many.
Uber drivers have one - Uber so not surprised at this decision. However watch Brooke with her robot like delivery waffle on about a vibrant economy, with everyone equal under the law, and have the freedom to call themselves a contractor and not have the burden of holiday or sickness pay getting in their way to financial freedom.
there are many companies in NZ that have pushed the obligations onto the contractor but then require them to service their business like an employee and restrict the contactors earning ability outside the contract, courier and trucking companies amongst the worst offenders at this, its time balance was brought back
this should be warning to anyone that thinks you are the boss of your own business and can use your truck outside of company hours to do other work
While you are technically your own boss, you will always be included as an integral member of the @@@@@@@@@ family.
Interesting story about an 88-year-old Japanese stock trader who got into the game around 1986 - just before the Nikkei crashed. Worth about 2 billion yen (USD12.6 million) and didn't touch a computer until the age of 66. NZ needs more people like this as opposed to the Flash Harry, fly-by-night cowboys that we all aspire to - like Kenyon Clarke.
In an Asahi video, he says he doesn't trust people but animals are honest.
Fujimoto has lived his life by the philosophy that, "You should take a chance, even at the risk of a failure, when something makes you think, ‘This is it’, whatever your age.”
Great story, smart guy. Day trading the open based on offshore events upstream of you is probably one of the better strategies to trade. I prefer futures then individual stocks for this on something like the Aussie open. I have a mate who developed a strategy he called the Kookaburra, as he was hand feeding one and noticed that the Kookaburra, very rarely bothered flying down off its perch to grab a worm, but when it did, its success rate was very high. He developed better pre-trade screening and found that on back testing he was better ONLY getting into a trade if it was overwhelmingly weighted in his favour, and the market backed up enough to kick out many via stoploss who saw the opportunity but got in too early. Hence the Kookaburra entry system was born
What a great learning lesson this old Japanese guy had, and still at an age he could recover.
He capitalized on his nest egg to become a full-time investor in 1986. He rode the tide of Japan’s asset-inflated economic boom of the late 1980s and increased his assets at the time to 1 billion yen.
The economic “bubble,” however, burst. There was nothing he could do as his assets slid to 200 million yen.
Nothing teaches you more then a big draw down.
Sustainable Foods, the parent company of vegan meat analogue brand Plan*t, has entered voluntary administration, citing harsh market conditions.
Basically these businesses still fit within 'nice-to-have' purchases. TJ Perenara, Stuff, and the govt all involved - that's some solid 'woke backing'. At the end of the day, the businesses leaders have to understand how people make trade-offs. Alternative meats are still seen as novelty.
https://www.greenqueen.com.hk/sustainable-foods-new-zealand-hemp-based-…
Writing was on the wall last year after the founders other business (prepackaged meat meals) went under
https://newsroom.co.nz/2023/04/03/taxpayer-loan-at-heightened-risk-in-r…
Every vegetarian or vegan I've known seems to lust for something that mimics animal protein.
The biggest issue is the market simply isn't big enough. Hence a lot of vegetarian/vegan eating establishments going under. Food is tough enough as it is without excluding 90 odd percent of the population as your customer base, and it turns out less people are stringent non eat meaters than was assumed.
Some DGM on NZ from Maccy B across the ditch. Often it takes outside observers to call the doom correctly:
https://www.macrobusiness.com.au/2024/08/reserve-bank-drives-retail-spe…
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