What happened Monday

Business / news

A review of things you need to know before you go home on Monday; minor TD changes, major house price rises, immigration turning up, FMA shuts down adviser, swaps soft, NZD holds, & more

13th Dec 21, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
Kiwibank raised some key TD rates today by between +10 and +15 bps for terms 6 months to 1 year.

LAST HURRAH?
REINZ's national median house price was up +$180,000 over the 12 months to November and the national median is now $925,000. It is now at $1.3 mln in Auckland. However recent activity is skewing sharply to the expensive end of the market and overall sales numbers are looking wobbly.

TURNING POSITIVE?
Net migration dipped into negative territory in the full year to October as more people left the country than arrived long term in the year. But the overall 1708 lost was less because of the +814 gain in the month of October.

BORDER CRACKS
The Government has approved border class exceptions for key agricultural jobs including 200 mobile plant machinery operators, 40 shearers and 50 wool handlers. And it has now also approved border exceptions for 600 specialist tech workers. So twice as many tech exemptions as rural exemptions. Office stress is considered more of a concern than overworked farm labour.

CLOSING AN END-RUN
The FMA has cancelled the transitional financial advice provider licence of Wisdom House Investment Partners, after its sole financial adviser engaged in serious misconduct at his previous employer. Wisdom House is solely operated by Yuen Pok (Paul) Loo. He established the business after his contract was terminated by Wellington-based financial services firm FoxPlan Ltd, which was censured by the FMA in July 2021 because, among other breaches, one if its nominated representatives provided services he was not permitted to give. That nominated representative was Paul Loo.

SPINNING ITS WHEELS?
Last week the NZX50 capitalisation rose +1.3% from the prior week which was its best result in a while. The most notable change was Sky Network Television (SKT, #45), rising +38% in a week and four places in the NZX50.This was followed by Fonterra (FSF, #46) (+8.4%) and Pacific Edge (PEB, #32) +7.1%). The overall eight-company property sector rose +3.4% and led up by Vital Healthcare (+5.7%, VHP, #27), while the energy sector fell -0.6% last week and led down by Genesis (-5.4%, GNE, #22). The overall NZX50 is now capitalised to $130.355 bln but that is actually lower than the $131.834 bln it was at a year ago.

LOCAL PANDEMIC UPDATE
In Australia, pandemic cases in Victoria jumped to 1290 reported today. There are now 11,649 active cases in the state - and there were another 2 deaths today. In NSW there were another 536 new community cases reported today, another jump, with 4,677 active locally acquired cases, and no deaths. Queensland is reporting eight new cases. The ACT has 3 new cases. Overall in Australia, just under 89% of eligible Aussies are fully vaccinated, plus 4% have now had one shot so far. In contrast, there were two case in New Zealand at the border, and 101 new community cases today. Now 89% are double vaxxed, 93.8% of Kiwis nationally aged 12+ have had at least one vaccination, and the equivalent Australian rate is now at 93.3% of all aged 16+ (92.4% ages 12+).

GOLD FIRM
In early Asian trading, gold is at US$1787/oz and +US$4 higher than where we opened this morning.

EQUITIES FIRM, EXCEPT NZ
The NZX50 has opened its Monday trade down a slight -0.1%. The ASX200 is up +0.5% in their mid-day trade. Tokyo has opened up a strong +1.0%. Hong Kong has opened up a stronger +1.1% and Shanghai is up +1.1% at their open. The S&P500 futures is currently at +0.4% higher.

SWAP & BONDS RATES LOWER
We don't have today's closing swap rates yet. They are likely to be lower today. The 90 day bank bill rate is unchanged at 0.89%. The Australian Govt ten year benchmark rate is now at 1.64% and unchanged. The China Govt 10yr is at 2.87% and also unchanged. The New Zealand Govt 10 year rate is now at 2.42% and marginally softer, and still well below the earlier RBNZ fix for that 10yr rate at 2.47% (+1 bps). The US Govt ten year is now at 1.50% and marginally firmer.

NZ DOLLAR ON HOLD
The Kiwi dollar is now at 68 USc and marginally firmer from where we opened this morning. Against the Aussie we are little-changed at 94.8 AUc. Against the euro we are unchanged at 60.1 euro cents. The TWI-5 is still at 72.6.

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BITCOIN SLIPS AGAIN
The bitcoin price has slipped to US$48,963 and -1.8% below the level we opened at today. Volatility since this time yesterday has been moderate at just on +/- 2.1%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

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Source: RBNZ

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37 Comments

by chebbo | 13th Dec 21, 4:22pm 1639365775

recent [home sales] activity is skewing sharply to the expensive end of the market

I wish the REINZ reports would show a breakdown by quartile, rather than just saying "$1m+". It's hard to know whether more sales are happening over $1m because of "skewing" in that direction, or just general market trajectory.

by Yvil | 13th Dec 21, 6:07pm 1639372037

That's what the HPI is supposed to take into account (although I have never read any details of how the HPI is actually computed). Because of that I expected the HPI to possibly be flat in Nov compared to Oct, it isn't. For Nov over Oct the HPI is up: 1.8% in NZ, 3.0% in Akl, 0.9% in rest of NZ

by Te Kooti | 13th Dec 21, 4:28pm 1639366135

My Food Bag broke below $1.10 today, that's 40% below IPO while the broader index is +5% and all during Covid which you would think would be no worse than neutral to sales. It was obviously seriously mis-priced and even at this valuation is still carrying a lot of goodwill.

by iliketobike | 13th Dec 21, 4:44pm 1639367086

I can't speak for MFB but we have used Hello Fresh, 4 meals for a family of 4 is ~$150 without any discounts, we then went shopping for the ingredients at New World....$60.

I knew it would be less but was surprised at how much less, add in all the extra plastic packaging from HF and we won't be using them again even with heavy discounts.

I suspect online shopping from the duopoly eats into their market now too. NW have been doing click and collect for free this month.

by Te Kooti | 13th Dec 21, 4:57pm 1639367873

I really dislike the business model but also appreciate I can cook and do basic maths so I'm not the target market. It's a poor look for the NZX and Jarden's/Craig's as there are few mitigating factors. If NZ were more litigious we'd be looking at investor class actions I reckon.

by Cowpat | 13th Dec 21, 5:14pm 1639368844

A2 ,another former market darling has multiple class actions lodged in Australia, maybe it could share some with the bagholders.

by JKB | 13th Dec 21, 5:03pm 1639368204

I’m sure there a good recipe books out there under $90

We pay $155 for woop - 3 meals for 4, will review for new year

by HouseMouse | 13th Dec 21, 5:03pm 1639368211

Always seemed like 'Bubble Economy Businesses' to me. The sort of business that gets whacked in a downturn.

I have tried them, they were 'quite nice' taste-wise but no better than that in my opinion. And at those prices I would expect better.

by Te Kooti | 13th Dec 21, 5:07pm 1639368473

It just seems to be a tax on laziness to me. Good recipe's are a dime a dozen online, choose a few and order the ingredients with your weekly shop. How hard is that?

by HouseMouse | 13th Dec 21, 5:15pm 1639368938

Yep.

Also you still have to cook the ingredients, it's not like it reduces that much in the way of cooking time.

I get it, people are busy including me and my household. But I will take the yummy ready made meals from Farro for $25-30 anytime over these.

by Uninterested | 13th Dec 21, 7:11pm 1639375914

Laziness plus it was very trendy. Word of mouth sort of thing. A fad.

by iliketobike | 13th Dec 21, 7:37pm 1639377441

You get lured in with a couple of free boxes gifted from friends, then they offer $100 off a couple for signing up plus some gift ones. Sign up your partner to use the gift boxes and it's not too bad cost wise initially. It is good for getting out of a rut, makes you cook stuff you wouldn't normally, and saves you sifting through the dusty recipe books you haven't looked at since you were given them for Christmas 8 years ago...

The packaging was a big turn off, plus we'd run out of ways to game it.

by Te Kooti | 13th Dec 21, 10:15pm 1639386906

You know the marginal value of a new customer by how much they will pay for a referral.

I totally get there is a market for recipe's and ingredients, I just don't believe it was ever worth $500m market cap. You can get a lot of food inspo from food channel's and tiktok, dusty old cook books went out long ago.

by sit23 | 13th Dec 21, 5:04pm 1639368273

If one is going to order food on line, why would one use a german firm to do it? It beggars belief that Kiwis can be so economically illiterate as to think it a good idea. The same applies to doing business with any foreign company, whose job is to send as much Kiwi money offshore as possible, never to return, instead of a local firm. $1.20 spent locally, is cheaper than $1 spent out of town.

by streetwise | 13th Dec 21, 5:43pm 1639370590

This is news to me...which online meal supplier is german owned?

by Taxbreak | 13th Dec 21, 11:17pm 1639390628

Hello Fresh

by bw | 13th Dec 21, 4:54pm 1639367675

My thought is that MFB was always a '42 Below' re-run.

It was never designed to 'be successful' but to be bought-out by someone who wanted access to the NZ fast food delivery market. It doesn't look like a suitor has arrived. Maybe it's headed the way of Pumpkin Patch now.

by Te Kooti | 13th Dec 21, 4:56pm 1639367784

The founders used it as a liquidity event, the biggest red flag there is.

by Dick Mortensen | 14th Dec 21, 4:31am 1639409480

Fast food in disguise. Your convenience of not having to cook is rewarded by nutrient deficient 'yummy food', loaded with refined sugar, refined flour, possibly processed and a little seed oil thrown in. 34% of kiwi's obese and rising. The real pandemic.

by Mountie | 13th Dec 21, 6:09pm 1639372165

The only hope for MFB was to break into Australia big time and they haven't. Horribly over-priced IPO. We have tried Hello Fresh, gave up after about two months. I quite liked the convenience as a bit of a change from 'what's for dinner' but the excessive packaging did my head in.

by Justa comment | 13th Dec 21, 9:15pm 1639383312

You could see it coming, the hard advertising of the product on tv and radio before and after the float (effectively paid for my the new shareholders) , the over valuation, and with interest rates set to rise, this is a discretionary spend that will be one of the first household cuts. But well executed by the founders, a lesson for the sharsies brigade, but experienced investors had seen this all before and did not partake. They sold at the perfect time. touche

by muzled | 13th Dec 21, 5:24pm 1639369495

Great to see labour still trying to supress IT wages

We’re carefully targeting areas of the sector where industry has highlighted a clear need for overseas talent including, software development, product managers, cyber security and interactive media.

NZ has been importing s/w developers for years because the big firms that are more than able, refuse to train up any juniors.

And I guess why would you when you can import a well skilled one and pay them 25% under market value.

As for putting Product Managers on the list of shortages, who sold David Clark that one?

Not a single skill on that list that needs to be imported if we train our own.

by Zachary Smith | 13th Dec 21, 5:57pm 1639371476

I thought the same when I read they are importing more IT people. A lot of fairly recent IT immigrants wont welcome this news either as they are now in demand and jobs are plentiful.

by JimboJones | 13th Dec 21, 7:00pm 1639375256

Can’t have wages going up though can we.

by Lapun | 13th Dec 21, 7:26pm 1639376797

Before arriving in NZ (2003) with my IT skill I had met Kiwi IT professionals in London, Australia and a 3rd world country. They were good - maybe more feet on the ground than most. You are right about salaries - because I wanted to bring my family to NZ I happily accepted a 50% pay reduction. I'm guessing that all the great programmers have emigrated and all the rubbish ones have remained - it might explain why so many pieces of NZ software drive me mad now I'm retired.

by bookworm69 | 14th Dec 21, 7:33am 1639420418

This is what I was saying 20 years ago. Son graduated 2001 with Computer Science degree and I was sure some big companies would be offering him a position, but when I asked him whether he had heard from any, he said no NZ businesses. A UK investment bank snapped him and another guy from Christchurch up for their graduate programme and he has been in London for the last 20 years. Keeps saying he'd like to come home but the wages are too low - he hasn't had a family so not prepared to accept low wages and high house prices for now.

by rastus1 | 14th Dec 21, 3:50pm 1639450229

Can't IT workers work remotely? Like as in Delhi or wherever?

Haven't they discovered zoom or Teams or perhaps its a bit tricky for them to master?

Makes no sense.

by Stephen Rogers | 13th Dec 21, 5:28pm 1639369737

Those immigration numbers look like they are being manipulated. I follow the passport in passport out numbers from Customs NZ, https://www.customs.govt.nz/covid-19/more-information/passenger-arrival…

It tells me we have lost 84,000 people from 1 march 2020 till the end of last month, regardless of how you spin the numbers. So we need approx 30,000 fewer houses?

by Lapun | 13th Dec 21, 7:28pm 1639376937

Did 84,000 leave NZ and die of Covid while overseas? Does an occupied coffin count as an arrival?

by Dick Mortensen | 14th Dec 21, 5:52am 1639414352

No 84,000 people either cannot get an MIQ (jail) spot, do not like surveillance, do not want to be around transmissive, vaccinated people, mutating the virus which could be a good thing. I guess they do not want to live under totalitarian control. People in your coffin count are a result of their lifestyle choices, for which they take no responsibility. Your fear should be of Big Pharma, ADE, and the grand Pfizer experiment. This infected (pure blood) lab rat proves natural immunity outperforms Big Pharma's chemicals. No money in mother nature for Pfizer and no rise in your 'coffin count', statistics. Interesting that FEMA pays for funeral expenses (CARES Act) for people dying of "Covid" padding your 'Coffin count" (just more fear, stop it).

by Vivid | 13th Dec 21, 9:39pm 1639384780

Stats NZ website explains the manipulation. In brief, the Stats numbers don't reflect real time movements, they are based on where people spend 12 of the next 16 months after arriving in NZ. For current month arrivals, they seem to make a guess as to whether the person arriving intends to remain here long term. This year they have been continually adjusting the numbers downwards, which in their model, can only reflect somebody they assumed planned to remain in NZ leaving again within 12 months.

I suspect our contributor Brock and his family will go down as revisions, Brock if you read this, if I recall correctly you arrived back here around April, and plan to leave again within 12 months of arriving. If that is the case, your family will be a negative revision of 3-4 people to the April number when Stats NZ finally realise you're not a long term returnee, which they won't realise or report until well after you leave for Queensland.

I've got a spreadsheet running, into which I paste the monthly reported figures each month. As an example, March 2021, as first reported (which is figures as issued by Stats NZ in the middle of May 2021) had a net gain of 825 people. This month, the same March 2021 figure is listed as a net loss of 267 people. Similar is occurring in every month, eg this months figures contain downward revisions for the 13 of the last 14 months. The biggest downwards revision between the November report and the December report is a negative 679 for July.

There are more downward revisions to come, though nowhere near the 84,000 figure as much of the 2020 departure number reflected short term tourists who were trapped here in the first wave of Covid related flight cancellations finally getting a chance to leave.

by CWBW | 13th Dec 21, 5:44pm 1639370648

REINZ's national median house price was up +$180,000 over the 12 months to November and the national median is now $925,000. It is now at $1.3 mln in Auckland. However recent activity is skewing sharply to the expensive end of the market and overall sales numbers are looking wobbly.

The median only gets skewed if a lot of high priced houses are represented in the sample. It there are lots of high priced houses represented in the sample, then its median truly reflects the average house prices without a skew bias, ie. it is what it is.

If procrastinators would had bought in 12 months ago, that $180K could had been theirs to enjoy. The returns is equivalent to having a fixed term bank deposit that compounds monthly at 1.820%!

The current sales turnover is not an outlier and I don't think it's anywhere near wobbly.

by Yvil | 13th Dec 21, 6:12pm 1639372336

The HPI is supposed to adjust the higher and lower end sales (although I have never read any details of how the HPI is actually computed). Because of that I expected the HPI to possibly be flat in Nov compared to Oct, it isn't. For Nov over Oct the HPI is up: 1.8% in NZ, 3.0% in Akl, 0.9% in rest of NZ

by CWBW | 13th Dec 21, 6:27pm 1639373229

I know you're looking for this, hope you remember your calculus.

Residential Property Index Series - Core Logic

by JimboJones | 13th Dec 21, 7:00pm 1639375214

Would be interesting to know how much divergence there has between between median and HPI over the years. It would take a lot of high end homes to skew the median so I’m guessing it doesn’t happen as often as claimed but would be easy to prove I guess.

by CWBW | 13th Dec 21, 8:24pm 1639380248

When more "average" houses sells for more than "average", it will appears as if the average is skewed.

However, that "average" is the mental expectation of that individual and so it appears to him the median is "skewed" which is mathematically making no sense because the surprising median is now currently the real average at the time of reporting.

by Zachary Smith | 13th Dec 21, 8:01pm 1639378912

The NZX50 appears to have rallied since this 4pm report and is now showing up 1.12%