Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
ASB cut some fixed rates to match or better ANZ's recent cuts. But ASB's weren't trimmed as far as Kiwibank did at the end of last week. Details here. Nelson Building Society and the Police Credit Unioin also cut rates today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
There were a series of rate cuts by banks today to TD rates, ranging from ASB, BNZ, Heartland Bank to Rabobank. Details here. AMP also cut rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
STILL CONFIDENT IN HOUSING, BUT LESS SO
Housing market confidence remains high but showing signs of slowing in ASB's latest housing confidence survey. People are generally optimistic about house price gains but are less confident than they were a year ago.
TURNING UP, FINALLY?
The retail sector shows some signs of emerging from its trough. Stats NZ says retail activity as measured by sales volumes (that is, inflation adjusted) saw the first quarterly gain in December since the March 2024 quarter.
SEASONALITY DISCREPANCY
Consistent with the rising retail spending data, the January credit card billing data was up +2.8% on a seasonally adjusted basis, with domestic billings up only +0.4% but offshore billings up more than +12%. On an unadjusted basis, January domestic billings were down -2.9% from the same month in 2024, which means the seasonal factors are masking quite a big drop.
SEASONAL LOW
Credit card account holders are paying interest on $2.952 bln of the $5.791 bln they owe on these cards. That is, 51% of the balances incur interest, and that is the lowest we have ever seen that level. But to be fair, it is a December level and identical to the proportion at December 2023 and December 2022.
NZX UPDATE
The NZX50 is down -1.6% so far today with a broad-based sell-off. Investore leads gainers but Summerset, Oceania, Chorus, and Gentrack are the significant decliners. Market heavyweight F&P Healthcare is down -1.1% today. More here.
A SCRAMBLE TO GET RID OF SOME DEBT
Retirement village operator Ryman says it's taking 'decisive' action to reset its balance sheet and provide the company with the foundations 'to deliver further transformation initiatives'. Ryman is in a trading halt today, so not recording any change in the overall index.
NIB NZ STRUGGLES TOO
And it is not only listed companies struggling. NIB NZ posted a -$10.9 mln loss amid rising claims costs. The inflation and economic pressures are mounting on it.
THE FRUITS OF COST CONTROL
The Z Energy and Caltex brand divisions of Aussie owner Ampol reported A$5 bln revenues and a net result of just A$184 mln for a 3.7% net margin for the year to December 31, 2024 (page 134). This was a revenue decline of -9.3%, but a profit rise of +70%.
HD FOR BRIBERY
A former Auckland Council building inspector, Nicholas Bright, has been sentenced to 11 months’ home detention in the Manukau District Court after pleading guilty to 21 charges of corruptly accepting bribes as a public official. He received discounts for pleading guilty early (in 2024), remorse and cooperating with the SFO investigation. He accepted bribes, including cash payments and home renovations, in connection with his role as a building inspector. As well as over $35,000 paid in cash payments, the renovation work included gasfitting work, installation of a heat pump, double-glazed windows, and a new carport.
SWAP RATES HOLD AGAIN
Wholesale swap rates are likely to be little-changed again, but keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.77% on Friday. The Australian 10 year bond yield is down -4 bps at 4.49%. The China 10 year bond rate is up +5 bps at 1.78% and quite a bog move for them. The NZ Government 10 year bond rate is up +2 bps at 4.69% while today's RBNZ fix was at 4.65% and down -1 bp. The UST 10yr yield is now just on 4.44% and up +1 bp from this morning. Their 2yr is holding at 4.20%, so that positive curve is at +24 bps.
EQUITIES QUITE MIXED
The NZX50 is down -1.6% in late Monday trade. But the ASX200 is only down -0.1% in afternoon trade. Tokyo is up +0.3% in early Monday trade. Hong Kong is also up +0.3%, but Shanghai is down -0.1% its open. Singapore has also opened up +0.3%. Wall Street was down -0.4% on the S&P500 in Thursday trade. The futures market currently suggests Wall Street will open its Monday trade up +0.6% when it opens tomorrow.
OIL ON HOLD
The oil price is still just under US$70.50/bbl in the US, and at under US$74.50/bbl for the international Brent price, both unchanged from this morning.
CARBON PRICE HOLDS IN RANGE
The carbon price is still within its range, and today is down -50c at NZ$62.50/NZU. The next release of units at the official auction is on March 19, 2025. But that auction's floor price is $68/NZU, so it is heading for a failure. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD HOLDS
In early Asian trade, gold is down -US$8 from this morning, now at US$2928/oz.
NZD LITTLE_CHANGED
The Kiwi dollar has risen +10 bps from this morning, now at 57.5 USc. Against the Aussie we are unchanged at 90.3 AUc. Against the euro we are down -10 bps at 54.7 euro cents. This all means the TWI-5 is just over 67.1 and essentially unchanged from when we opened today.
BITCOIN HOLDS
The bitcoin price is up +0.4% from this morning's open, now at US$96,025. Volatility of the past 24 hours has still been low at just on +/- 0.7%.
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41 Comments
Retirement village operator Ryman says it's taking 'decisive' action to reset its balance sheet and provide the company with the foundations 'to deliver further transformation initiatives'.
Always though Ryman was a possible proxy for the Ponzi. Not saying that is, but not saying that it isn't.
But if it is, important to note that the share price is down close to 80% from ATH in 2020 and 75% down in past 5 years. Share price back to 2012 levels. Inflation adjusted, that's a disaster.
The boomers will be heavily exposed to this train wreck as the stock itself fits with the narrative "you can't go wrong with bricks and mortar." Don't underestimate the power of the narrative. In some ways, the Ponzi has some parallels with the more speculative end of the crypto mkts where narrative is everything.
Always though Ryman was a possible proxy for the Ponzi. Not saying that is, but not saying that it isn't.
There's a couple of extra factors to consider:
- boomers are less inclined towards the traditional retirement home than their parents and grandparents, less enamoured with the cookie-cutter, hi-de-hi nature of the traditional format
- Our large, aging demographic only has so long a lifespan
So the industry as a whole is going to have a peak, then an outlook of decline
the Ponzi has some parallels with the more speculative end of the crypto mkts where narrative is everything.
So like, all of the crypto market
No, I just disagree that there's a part of crypto that's value isn't speculative narrative derived.
If you don't think there's an intrinsic value of a house, I'll carve off a bit of land round my place and you can see how much narrative you need to manifest a house there.
The property "Ponzi" is the foundation for "money" printing.
It's as fundamental for supermarkets and farms as it is for property developers, hence no real changes desired by those all in.
When you hear some of the "investor gurus" from the US speak about everything wrong with fiat and money printing, yet brag about their bank debt and tax breaks on property, it's really quite astounding.
And they're the ones mainly lobbying for govt austerity because tax revenue, and the masses believe them.
...just a beginner
https://www.downtoearth.kiwi/post/advice-to-young-kiwis-how-to-manage-y…
This
Awhile ago I was told by one of the highest officials in Wellington that should this Blog keep doing articles critiquing NZ's rulers, there'd be no Board jobs; no high up appointments, for me. This Blog article - all true - though not flattering to Finance Minister Willis - run in the Herald - finished me off, they said. Forget being on the Reserve Bank Board, or big advisory committee. They go to people who suck up. Who cares whether one's work in monetary economics was discussed & cited as being influential by America's last Treasury Secretary Janet Yellen, as well as former Chairs of the US Federal Reserve? It's irrelevant in NZ. But its not just government jobs, its corporate jobs. Our boards are full of mates, of people there because favours are being returned, who know each other from way back.
Warren Buffett says he is likely to take his shareholding’s in the top five Japan trading houses beyond a previously agreed 10% limit, with the five agreeing to relax the limit he can buy.
A tremendous endorsement for the following companies: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo.
https://www.reuters.com/business/berkshire-boost-investments-japanese-t…
I've spoken with quite a few young people lately about investing and the common mantra is don't invest in the nzx. Most became involved as sharesies et al were launched just before covid days. Sadly and accurately they have seen their money double investing in a simple USA ETF or Bitcoin and watched NZX companies go nowhere or dilute their holdings. It's akin to a slow 1987 and burned a generation of investors who won't come back.
It's a really good lesson in investing psychology in my opinion. The NZX did great in the mid-late 2010s, fantastic returns. World leading. Then we dragged for a few years and fell behind the rest of the world. If people are only looking at these 5 years and deciding to throw the whole market away I think that's crazy. These things come in waves.
Looking at my 5 year returns, my NZX stocks are up 6% pa which is not a disaster, but pretty poor compared to other markets. My ASX stocks are up about 20% pa for example. I will continue to hold some NZ stocks where I see good value, and I don't think the underperformance will last forever.
"Australia has had no recession. NZ has had three. Australia didn't panic when inflation rose - and it didn't panic as inflation fell. Central Banks are meant to smooth business cycles, not exacerbate them."
https://www.downtoearth.kiwi/post/the-graph-that-shows-how-the-rbnz-mis…
And this
How has the RBNZ Governor covered his tracks? He has suckered our country's Main Stream Media (easy to do), suckered MPs, and suckered the RBNZ Board (easy to do, since it doesn't have a clue about monetary policy, due to being stacked full of mates of politicians) by blaming foreign factors. Now his huge Comms / PR / marketing team is trying to sucker the Kiwi public.
The RBNZ and the banks have been sucking NZ for years, blaming everyone else for it, and continue crowing in their ivory towers while their debt slaves fight to get ahead and climb the ladder below.
But the majority all enjoyed their sucking and don't know whether to blame the pimp, the ho, the drug dealer, or the mafia supposedly in control of it all.
https://www.stuff.co.nz/business/300721698/unemployment-must-rise-befor…
https://www.stuff.co.nz/business/129960960/50000-people-may-need-to-los…
Great info passed today challenging the narrative that subprime caused the housing crash during the GFC. Wrong. Prime borrower speculation did.
We found there was no explosion of credit offered to lower-income borrowers. In fact, home ownership rates among the poorest 20 percent of Americans fell during the boom because those buyers were being priced out of the market. Instead, we found credit was expanded across the board. Everybody was playing the same game. But credit expanded most drastically in areas where house prices were rising the most, and these were markets that were beyond the reach of lower-income borrowers.
The overwhelming majority of mortgages were going to middle income and relatively high income households during the boom, just as they have always done.
https://www.fuqua.duke.edu/duke-fuqua-insights/adelino-subprime
Because regulators responded based on the belief that there had been an explosion of credit given to low-income borrowers
Was a great lie wasn't it. Who wants to admit that it's the Wall Street casino in charge?
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."
You will own nothing and be happy.
Interesting find. IDP Education provides placement of international students into education institutions. Listed on the ASX. The CEO made AUD38 million in 2019, making him the highest paid CEO in Aussie.
Stock is now one of the most shorted on the ASX. Stock price down over 75% since 2021.
Turns out the company was doing IELTS testing in Vietnam without a license.
https://en.vietnamplus.vn/over-56000-unauthorised-ielts-certificates-is…
Cash Converters going gang busters in Aussie. Now selling ‘luxury goods’ in its stores, including a dedicated ‘luxury only’ store at Bondi Junction. People must be cash strapped.
https://www.tipranks.com/news/company-announcements/cash-converters-rep…
Looks like this will pass - excellent news
NZ First backs Labour’s bill on illegal wage theft
"This meant the left bloc, with NZ First’s support, had 63 votes in favour - outflanking ACT and National’s 60 votes against."
https://www.stuff.co.nz/politics/360591301/nz-first-backs-labours-bill-…
(Winston is also sending a signal to both Coalition & Opposition about keeping his options open for next years election)
Just trying to thing of the reasonings behind why 60 members would vote against a bill that would criminalize intentional wage theft.
- Are some of our members complicit in intentional wage theft outside of politics?
- Will this bill alienate a chunk of donors?
- Maybe they were votes on behalf of Taito Phillip Field or Darleen Tana?
Is wage theft something we want to encourage in this country?
All parties have their points of blinkered dogma
Possibly both National and Labour are thinking of the dogs breakfast that's resulted from their attempts to draft the Holidays Act - with different reactions
(noting that IMNSHO most of those issues are managerial incompetence & outsourcing of payrolls to 3rd party providers. I had personal experience of successfully implementing it in a multishift unionised 24/7 operation with penal rates, shift payments etc).
ACT MP Parmjeet Palmer spoke against the Bill: “The system is already working, and if employers are in breach of their obligation, then there are systems available; there are provisions available. What we need is more awareness for these vulnerable employees to take up these options and to go out and seek justice. That's why the ACT Party is not supporting this bill.”
National’s Grant McCallum described the pressure he thought the law change would place on small-business owners. “Employers in this country are the backbone of this country. They risk their capital. They make the difference and we are the ones who are about to turn this country around, and we will not be held up to be criminals because you might make a mistake which might be interpreted as a criminal activity—and that is what the problem is. That is why we are completely against this bill.”
"The system is already working, and if employers are in breach of their obligation, then there are systems available; there are provisions available. What we need is more awareness for these vulnerable employees to take up these options and to go out and seek justice. "
Over 50 years I've worked as factory wage worker, middle/senior manager & company director. I saw far more unfair legal, employer rorts & policy changes aimed at disadvantaging people when I was in the latter roles, a lot not immediately obvious to an employee.
Anyone with half a brain not stuck in their dogmatic ego knows the odds are so heavily stacked against vulnerable employees that justice is rarely more than a theoretical, expensive & arbritary concept unlikely to withstand the legal machinations.
Which is probably why Australia has also implemented their own wage theft laws this year.
https://www.dewr.gov.au/closing-loopholes/announcements/new-wage-theft-…
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