Harbour Outlook: Inflation constrained
Key points
The MSCI All Country World Index fell -2.0% over the month in New Zealand dollar-unhedged terms, and -9.0% in New Zealand dollar-hedged terms.
The New Zealand equity market (S&P/NZX 50 Gross with imputation) finished the month down -4.6%, whilst the Australian equity market (S&P ASX 200) fell -6.2% in Australian dollar terms in the month, and -4.0% in New Zealand dollar terms.
Bond yields rose over the month with Ne...
Sustainability trends from the recent reporting season
Climate change action and disclosure improved as new reporting standards loom
Increase in companies adopting science-based targets
Uptick in employee turnover rates
Diversity and pay gap measurement improving
Sustainability remained front of mind in the latest round of company profit reporting with many companies showing improvements in their ESG (environmental, social and governance) practices. Some of the key trends we obser...
UK tax cuts prove unwelcome to fragile markets
UK bond yields soared after aggressive tax cuts, to be funded with increased debt, were announced by Liz Truss’s new Chancellor, Kwasi Kwarteng.
In just 72 hours, the UK 5-year government bond (gilt) yield rose by 1.2 percentage points to 4.7% and the British pound (sterling) dropped by 6% against the US Dollar.
The harsh market reaction highlights how far the market has moved from the Covid-era ideas of Modern Monetary Theo...
Harbour Navigator: Rough ride ahead for NZ households
The Reserve Bank of New Zealand (RBNZ) is rapidly tightening monetary policy to combat the highest inflation in more than 30 years.
Despite strong balance sheets coming into this year, households are feeling this most acutely as inflation is eroding purchasing power, the cost of borrowing is increasing, and asset prices have recently fallen.
The pressures are far from over as the RBNZ sees lower household consumption a...
Harbour Outlook: Markets still focused on inflation
Key points
The MSCI All Country World (global shares) Index fell -1.5% over the month in NZD-unhedged terms, and -2.9% in NZD-hedged terms.
The New Zealand equity market (S&P/NZX 50 Gross with imputation) finished the month up 0.9%, whilst the Australian equity market (S&P ASX 200) rose 1.2% in AUD terms in the month, and 1.8% in NZD terms.
Bond yields rose over the month with New Zealand 10-year government bond yields ending...
Harbour Navigator: Inflation moderating but not yet tamed
Inflation may have peaked, reducing the risks of severe monetary policy tightening and a deep recession.
Supply chains are partly normalising and slowing demand in most economies is reducing extreme pressures on prices.
Tight labour markets, however, are placing upward pressure on wages and the current high inflation rates mean that central banks may retain a tightening bias for some time.
Global economic growth has slowed mor...
Harbour Outlook: Quality growth through a turning point?
Key points
The MSCI All Country World (global shares) Index rose 6.1% over the month in NZD-unhedged terms, and 7.1% in NZD-hedged terms.
The New Zealand equity market (S&P/NZX 50 Gross with imputation) finished the month up 5.7%, whilst the Australian equity market (S&P ASX 200) rose 5.7% in AUD terms in the month, and 6.3% in NZD terms.
Bond yields declined over the month with New Zealand 10-year government bond yields e...
Harbour Outlook: From stagflation to low growth?
Key points
The MSCI All Country World (global shares) Index fell -4.1% over the month in NZD-unhedged terms, and -7.7% in NZD-hedged terms. The index ended the quarter -5.7% in NZD-unhedged and -14.3% in NZD-hedged terms.
The New Zealand equity market (S&P/NZX 50 Gross with imputation) finished the month down -3.9% (-10.3% for the quarter), whilst the Australian equity market (S&P ASX 200) fell -8.8% in AUD terms in the mon...
Impact Investing: Responsible investing’s latest frontier
What is Impact Investing? Responsible investing has evolved over time, from simple portfolio exclusions such as alcohol and tobacco, through to only selecting investments that meet certain Environmental, Social and Governance (ESG) criteria, and investment managers engaging with company management to try to effect positive change in these ESG areas.
Impact investing has become a buzzword of late and has evolved to mean slig...
Contact’s closure cuts carbon
Contact Energy has announced the retirement of a gas-fuelled power station
Contact’s direct carbon emissions expected to be reduced by 20% p.a.
Re-deployment opportunities will be available for affected workers to support a just transition
Generation shortfall expected to be met by new renewable energy, helping to achieve their climate strategy
With the proliferation of new climate change commitments made by governments and co...