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A review of things you need to know before you go home Thursday; HSBC makes rate changes, Xero hits milestone, #2 cable running, regional growth revealed, more student loan defaulters pay up, swaps slip

A review of things you need to know before you go home Thursday; HSBC makes rate changes, Xero hits milestone, #2 cable running, regional growth revealed, more student loan defaulters pay up, swaps slip

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
HSBC is the latest bank to raise its floating rate. It is now 5.79, a +20 bps rise. They haven't changed any of their Premier fixed rates at this time and that means their 3.99% 18 month 'special' is still available.

DEPOSIT RATE CHANGES
HSBC has reduced some term deposit rates for terms of 9 months and shorter, and it has raised term deposit rates for terms of 3 to five years.

PLAUDITS DESERVED
Xero revealed today that it now has more than one million subscribers worldwide on its global cloud accounting platform. It has doubled subscriber numbers in less than two years, adding nearly 300,000 subscribers in the last year alone. It is a significant milestone from what has become an icon New Zealand tech business.

NUMBER TWO NOW WORKING
The Tasman Global Access internet cable is up and running. It runs between Raglan in the Waikato and Sydney, and is an alternative to the trans-Tasman section of the Southern Cross Cable, which is the main international cable that currently carries the majority of internet traffic to and from New Zealand. Supported by Spark, Vodafone and Telstra, this investment is part of critical infrastructure for New Zealand. A third major cable project, the Hawaiki cable, is due to be completed next year. Once the Hawaiki cable is complete New Zealand will have three cable systems providing international connectivity, Southern Cross, the TGA and Hawaiki.

MORE STUDENT LOAN DEFAULTERS PAY UP
Since December 2014 there has been a +66% increase in the number of overseas student loan borrowers who are behind on their payments getting in touch with the IRD to make arrangements to sort their loan. In the same period half of them started making a dent in their loan. Repayments by those who defaulted increased by +$24.5 mln in 2016. Since the overseas-based borrower compliance initiative was established in 2010, borrowers have made more than $360 mln in additional repayments, with more than $100 mln of that in the last financial year.

CEO LEAVING F&P FINANCE/FLEXI CARDS NZ
Greg Shepherd, CEO of Flexi Cards NZ - formerly Fisher & Paykel Finance - will leave the finance company in mid-April. His departure comes a year after Australia's Flexi Cards took over the NZ firm. Shepherd has been CEO for four years and is only the second CEO in F&P Finance's history. The company has not yet named his successor.

A NEW RECORD FOR US
As we write, March traffic at interest.co.nz has powered through its all-time monthly high. We are on track to deliver more than 1.5 mln pages of content in March, and also a new record high level of unique readers. What makes this such a gratifying result is that this level has been reached without a special news event in the month. Previous records came when there was something like an RBNZ rate change, and was pushed ahead by significant bank rate reactions. Or a Budget. (Or a prime minister quitting.) This month however, it is 'just' an unusually high tide. Thank you for making interest.co.nz a part of where you get your daily information. You can see a high level chart of our monthly traffic at the bottom of this page.

REGIONAL GROWTH
It is not only interest.co.nz that is gowing ;), most New Zealand regions are as well. Twelve of the 15 regional economies in New Zealand recorded nominal GDP increases in the year ended March 2016, Stats NZ said today. The largest percentage increases were in the Bay of Plenty (+7.7%), Auckland (+6.0%), and Otago (+4.8%). Wellington was up +3.6% and Canterbury was up +3.5%.The national average increase was +4.1% nominal. The Bay of Plenty’s increase was underpinned by strong performances across the professional and administrative services, and agriculture, primarily kiwifruit, The increase in Auckland was driven by the professional services, finance, and transport industries.

WHOLESALE RATES SLIP
Wholesale swap rates fell -2 bps today, with the ten year down -3 bps. The 90 day bank bill is unchanged at 1.99%.

NZ DOLLAR LOWER
The NZD has declined against the USD today to 70.2 USc. On the cross rates, against the AUD and EUR we now trade at 91.7 AUc and 65.3 euro cents respectively. Against the whole basket however we are up compared to this time yesterday with the TWI-5 now at 75.2.

You can now see an animation of this chart. Click on it, or click here.

Daily exchange rates

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Source: CoinDesk

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8 Comments

Kudos to you, interest! One of the few remaining news sites that deliver accurate news supported with empirical evidence.

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Xero may have 1m subscribers, but if they continue to burn more cash than they receive, what will the shareholders end up with - Zero?

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Xero are an amazing money compounding machine. They raised capital with the intention of spending it to grow, they haven't spent the money they raised yet and are still growing at a healthy clip. Why would they decide to stop spending their cash pile and give it back to the same shareholders that they raised it from in the first place?

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if you read their reports they do not state employee numbers, but for every new client they have to hire more so the "development costs" rise year on year.
economics of scale does not seem to happen very fast so there margins must be so low they will need massive numbers for the curves to reverse

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Rod has said before that the company could be profitable right now if they reigned in their ambitions. They could be comfortable, profitable market leaders in Australasia. The money is being spent aiming for bigger things. Certainly not without risk, but it's a clear strategy and not a shortcoming that they're not profitable right now

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Rod is a very good salesmen, but investors sooner or later will run out of patience as is already being showing in the share prices, promises of future success only go so far without actual figures to back it up.
I hope they do come good but not holding my breath on thisone

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Fair enough, for sure they're not for everyone. I find it slightly frustrating that so many don't even try to understand the strategy and assume no profit = failure, not being confident the strategy will work is valid. I hold, but just a small part of the portfolio due to the risks.

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Well done Interest.

What's also interesting: "Wholesale swap rates fell...." Aren't some on this site saying rates are going up?

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