The NZ sharemarket bounded to a new high on Wednesday, with the NZX-50 index surpassing the previous peak to climb above 12870.
Investors are not exactly dancing in the streets, although in past eras they might have been.
But there seems to be a clear conviction among investors that the NZ economy is escaping from the shackles of the Covid-19 pandemic faster than most others, and anyway, where else can funds be placed for a decent return (apart from the overheated housing sector)?
Strangely, too, the market hit its new peak just as the gloss had gone from the stocks which had enjoyed to that point the status of market darlings, F&P Healthcare and A2 Milk. Continue reading “Market darlings falter but the rise of other stocks has lifted the NZX-50 to a new record”
So how is NZ Inc doing in this pandemic? OK, you might say. Take for example NZ’s external trade. NZ has posted its biggest external trade surplus in 28 years as Covid-19 led to a sharp fall in imports.
For the month of October there was a deficit of $501m, just under half the size of the deficit the previous October.
All up, international trade has proved remarkably resilient – a welcome boost for a small importing economy like NZ. And there are signs the economy is strengthening, says ASB economist Nat Keall.
He said that on the same day the NZ sharemarket rose to a new record.
But despite the positive signals, exporters can’t rest on their laurels. Indeed, fruit exporters are already under the pump as they face shortages of workers for coming crop harvests. Continue reading “We can learn from Australia about becoming too reliant on trade with China”
It’s been a grim week for investors. RNZ reported the local sharemarket continued to slide yesterday, because of anxiety about the coronavirus and the prospect of it sparking a global recession, and the NZ dollar tumbled after the first case in this country was confirmed.
The market mayhem was induced by the global panic as news of more coronavirus cases, notably in Italy, raised concerns of the virus’s economic impact being much greater than previously expected.
The market started the week at a record high but fell every day and had lost almost 7 per cent by the end of trading on Friday.
The three main US indexes ended the week down 10% or more.
“A known unknown” is how one major company boss described the economic fallout of coronavirus to the BBC, which reported the markets have woken up to the disruption to the economic activity from coronavirus being wider, deeper and perhaps longer lasting than previously assumed. Continue reading “Sorry, but we can’t find a financial whiz to assure us the short-term economic outlook is bright”
Finance Minister Grant Robertson was bullish in telling the party faithful about the state of the economy at the Labour Party’s annual conference in Dunedin earlier this month.
One year after the election of the Ardern government’s the fundamentals of the economy were strong, he said.
“We have just had the strongest quarter of economic growth in two years. We have a sustainable surplus that is allowing us to invest in infrastructure and keep debt under control”.
And he rounded off his gung-ho report of what the coalition has achieved :
“It is time to change gear on our economy”.
The question now is did he mean changing up to a higher gear? Or was he reckoning on dropping it down one? Continue reading “Minister of Finance is ready to change gear – but he didn’t signal to what effect”
The New Zealand sharemarket’s top index hit a new record this week.
So given the slump in business confidence, is this just another outburst of irrational exuberance? Or do investors have a different take on the state of the economy than the business leaders who respond to confidence surveys?
The sharemarket has had a long bull run and some authorities think it is now overpriced. Yet those who have been predicting a downward correction are lonely prophets. Continue reading “A bullish sharemarket contrasts with flagging business confidence”
Business confidence has been declining since November and – according to the latest ANZ Bank survey – a net 27% of businesses are pessimistic about the year ahead. ANZ chief economist Sharon Zollner thinks the economy may be “tiring”.
Investors in the NZ sharemarket seem to have a different view. The S&P/NZX50 index hit a new record this week, reaching 8899.52 at the close of business June 7. After a flat first quarter this year, the market has surged 6.5% in the weeks from April 1.
So what’s going on? Continue reading “The paradox of sliding business confidence and rising sharemarket indices”