Forsyth Barr acquires Hobson Wealth

By | Insights
Forsyth Barr today announced that it has purchased Hobson Wealth. The two companies confirmed the sale following a thorough due diligence process and relevant approvals, and after careful consideration by...
Forsyth Barr today announced that it has purchased Hobson Wealth. The two companies confirmed the sale following a thorough due diligence process and relevant approvals, and after careful consideration by the Board of Hobson Wealth and unanimous approval from its shareholders. Warren Couillault, Hobson Wealth CEO, says both clients and staff will benefit from becoming part of Forsyth Barr. “We have been considering the strategic growth alternatives for Hobson Wealth over the past couple of years, looking for ways we can enhance services for our clients and help scale the business. We completed a comprehensive process and I’m pleased to... Read more

The United States- Why the US is still a leader amongst markets?

By | Insights
The last twelve months in financial markets has reminded us that earnings trends for businesses generally follow central bank policy, as interest rates have gone higher, the outlook for companies’...
The last twelve months in financial markets has reminded us that earnings trends for businesses generally follow central bank policy, as interest rates have gone higher, the outlook for companies’ earnings have gone lower, albeit with a lag of about eighteen months. In an environment of volatility and uncertainty is there such a thing anymore as an investing ‘safe haven’? In my mind, the United States, despite its many challenges, remains the key exception, at least amongst larger and more liquid markets. Now I am not suggesting that US earnings trends won’t follow the global monetary cycle, but moreover, the... Read more

Is the My Food Bag trading result a read through to the broader economy?

By | Insights
My Food Bag (MFB) released their FY23 trading update this week to the market following the completion of their first four months of the financial year. The result was weaker...
My Food Bag (MFB) released their FY23 trading update this week to the market following the completion of their first four months of the financial year. The result was weaker than they had been expecting citing the ‘marked effect on My Food Bag’s supply-side confidence in Q4 FY22, as the company and its suppliers encountered difficulties accessing staff and dealing with the flow-on problems of incomplete and late deliveries.’ This ongoing commentary from the impacts of Covid is now very much commonplace and so really of no surprise to business owners or the broader public. However, in my view what... Read more

When will the Government realise that fiscal spending is inflationary?

By | Insights
In a hastily arranged press conference on a Sunday afternoon, our finance minister Grant Robertson announced it would extend cuts to fuel taxes, road user charges, and half-price public transport...
In a hastily arranged press conference on a Sunday afternoon, our finance minister Grant Robertson announced it would extend cuts to fuel taxes, road user charges, and half-price public transport fares until the end of January next year. The reasoning is to assist households with rising cost pressures and offer some relief when filling up at the petrol pump. The cynical side of me questions the timing a day before the release of the second quarter CPI numbers, but that aside, the rationale for the cuts is somewhat baffling. I thought we have a central bank raising interest rates to... Read more

Why Mahé Drysdale changed everything to become a financial adviser

By | Insights
I’m sure we’ve all considered it at least once – completely changing careers, to something fresh, new and exciting.
Mahe Drysdale – the former Olympic champion rower, who has represented New Zealand in countless Olympic and world champion contests has traded in the quick-dry athletic t-shirts for a suit, and now he’s a financial adviser. So what was the process like, and does he have tips for anyone else thinking about a change? You bet. Read more

The shift from borrowers to investors

By | Insights
This week the second quarter consumer confidence numbers in New Zealand printed at their lowest level since the series began back in 1988 and is a sobering reminder of the...
This week the second quarter consumer confidence numbers in New Zealand printed at their lowest level since the series began back in 1988 and is a sobering reminder of the challenges that lie ahead for many households. On the face of it, this is a nervous time for mortgage holders as the cost of servicing debt continues to go higher around the constant commentary of escalating cost pressures and the need for the central bank to move far quicker than anyone anticipated to combat inflation. However, this forms only one half of the equation. For investors reliant on income, this... Read more

Higher interest rates remain the biggest risk for Financial Markets.

By | Insights
For investors and more broadly financial markets, an unfamiliar foe of rising inflation has swept across the world over the last eighteen months, and central banks are now walking the...
For investors and more broadly financial markets, an unfamiliar foe of rising inflation has swept across the world over the last eighteen months, and central banks are now walking the fine line of trying to cool inflation while preventing an economic slowdown. However, policy makers are clearly more concerned with the former, that inflation will not only become imbedded in consumer and business expectations, but will also unhinge delicate political and geopolitical balances around the world. Whenever governments panic and significantly increase fiscal spending, inflation will tend to overwhelm the usual disinflationary pressures in an economy. Over the last two... Read more

Housing- What can we learn from previous episodes of rising interest rates?

By | Insights
Over the past 30 years, housing price growth has always slowed when interest rates have risen, but higher interest rates have not always been associated with outright falls in house...
Over the past 30 years, housing price growth has always slowed when interest rates have risen, but higher interest rates have not always been associated with outright falls in house prices. The difficulty in drawing conclusions about housing prices from past episodes of higher interest rates has been (i) the ongoing structural decline in interest rates and (ii) easier access to credit, both providing a significant cushion to house prices when faced with headwinds. The absence of a significant economic downturn post GFC has also clearly helped. Over the inflation targeting period since the early 1990s, the fall in interest... Read more

Investing in Long Dated Bonds

By | Insights
The Case for Duration Interest rates all over the world are beginning to rise as economies and populations start to feel a sense of normality following the effects of Covid-19....
The Case for Duration Interest rates all over the world are beginning to rise as economies and populations start to feel a sense of normality following the effects of Covid-19. Strong inflation data is putting pressure on central banks to raise their interest rates, and cool down economies following the vast levels of stimulus injected over the last two years. So as this ‘hiking cycle’ happens, how should your bond portfolio be positioned to potentially benefit from this process? Rising rates are not necessarily bad for bonds, but it is the expectations of interest rate rises and falls that influences... Read more

The housing market conundrum

By | Insights
Predicting the path of house prices in New Zealand is a bit like economists attempting to forecast future inflation, an interesting exercise but ultimately a futile one. That is not...
Predicting the path of house prices in New Zealand is a bit like economists attempting to forecast future inflation, an interesting exercise but ultimately a futile one. That is not to throw ‘shade’ on economists but more an acknowledgement that it is a very challenging task and none of us have the benefit of a crystal ball. What is now becoming apparent is the negative shift in sentiment from market commentators around the upward trajectory for prices of residential houses. It has gone from a moderating in price, to in some quarters a market crash just around the corner. To... Read more