What happened Monday

Business / news

A review of things you need to know before you go home on Monday; rate changes coming faster now, BNZ in big bond offer, Govt talks tough to supermarkets, swaps firm, NZD firm, & more

30th May 22, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
Kiwibank raised two of its fixed home loan rates today. ANZ raised its floating by +40 bps.

OTHER HOME LOAN CHANGES
TSB is now offering up to a $5000 cashback with a qualifying home loan. Kiwibank has started promoting its "Co-own" program, to enable buying a house with friends and family.

TERM DEPOSIT RATE CHANGES
Kiwibank also raised all its TD rates for terms of one year and less. And ANZ also upped its Serious Saver rate to 1.50%, also a +40 bps rise. Heartland has raised its term deposit rates today. Their new one year rate is 3.60%, the highest of any bank.

BNZ'S BOND DETAIL
BNZ has launched the bond offer we signaled late last week, looking for $100 mln with "the ability to accept unlimited oversubscriptions at its discretion". This will be a five year bond, prices at swap plus a margin in the 1.05% to 1.10% range. Based on the 5yr swap rate at the start of trading today, that would mean a yield of at least 4.79%. However, the actual rate will be according to the market pricing on Wednesday, June 1, 2022. (For reference, BNZ offers its term deposit holders a 3.90% rate for a five year term as at today.)

UPDATED
Readers of our handy NZX50 profiles should know that in the past week we have updated the profiles of Fisher & Paykel Healthcare (FPH, #1), Mainfreight (MFT, #4), Pacific Edge (PEB, #36), and E-Road (ERD, #50) to include the latest annual report results released very recently. Arvida (ARV, #26) will be updated very soon as well.

A WEEK OF RED INK
Last week was a tough one for the NZX50, especially in the light of sharp gains on many other global equity markets. The capitalisation of the NZX50 fell by -1.8% in the week, taking the monthly decline to -6.8%, and pushing out the year-on-year drop to almost -9.7%. Over the full year, that is a loss of 'value' of a massive -$12.1 bln. Over the past week, the biggest loser was Fisher & Paykel Healthcare which was down -6.5%. Serko lost -9.4%. There were few gainers but one that did rise was Pushpay Holdings which was up +20% in the week.

IMPROVEMENT NOTED
The RBNZ as regulator has reported that an independent review concluded Westpac has made good progress with its liquidity risk management systems controls and culture.

BIG STICK THREATENED
Government talks tough on supermarkets but provides little detail of how proposed measures may work. It is pledging to make supermarkets do wholesale deals with their competitors and is 'looking at' how to implement compulsory unit pricing on grocery products.

SUING TO FIX AN ONGOING PROBLEM
In Australia, regulator ASIC has commenced civil penalty proceedings in the Federal Court against ANZ-Australia for allegedly misleading its customers as to the available funds and balances in their credit card accounts. ASIC alleges that between May 2016 and November 2018, around 165,750 ANZ customers were charged cash advance fees and interest for withdrawing or transferring money from their credit card accounts based on an incorrect account balance, including on the ANZ website, ANZ App and at ATMs. ASIC also alleges that ANZ has not adequately fixed the problem and that customers continue to be affected.

SWAP RATES HOLD
We don't have today's closing swap rates yet but they have probably firmed. The 90 day bank bill rate is up another +3 bps today at 2.45% and adding to a string of quite big moves up. The last time it was at this level was in March 2016. The Australian 10 year bond yield is now at 3.25% and unchanged. The China 10 year bond rate is now at 2.78% and up +2 bps. The NZ Government 10 year bond rate is now at 3.53%, recovering +5 bps and now the same as the earlier RBNZ fix for this bond which was up +4 bps, now also at 3.53%. The UST 10 year is now at 2.74%, anchored there while Wall Street is on holiday.

EQUITIES ALL RISE
Maybe catching up with other equity markets, the NZX50 is up +1.1% so far today. The ASX200 is up +0.9% in early afternoon trade. Tokyo has opened almost +2.0% higher in mid-morning trade. Hong Kong is up more than +2.0% in early Monday trade, which Shanghai is up a lesser +0.6% just after their open. The US is on its Memorial Day holiday weekend, but the S&P500 futures suggests they will open Tuesday their time (Wednesday ours) up +0.5%.

GOLD UP
In early Asian trade, gold has risen +US$3 from where we opened this morning to US$1860/oz.

NZD MOVES HIGHER
The Kiwi dollar is moving up marginally, now at 65.5 USc. Against the AUD we are little-changed at 91.3 AUc. Against the euro we are up at 60.9 euro cents. That all means our TWI-5 moved up to 72.1.

BITCOIN HIGHER
Bitcoin is now at US$30,189 and up +3.5% from where we opened this morning. Volatility over the past 24 hours has been moderate at +/- 2.3%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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35 Comments

by Foxglove. | 30th May 22, 4:24pm 1653884690

Big, loud government talk to the Supermarket cartel. Noise, no more no less. Hardly this government’s fault but all NZ politicians for the last ?? years should hang their heads in shame as to the foul disservice that has been allowed to be inflicted on the people of New Zealand. Insurance is another one. Maybe they need to revisit Warren Freer’s fruitless MRPs or Muldoon’s equally futile price freeze(s.) Again they were effectively nothing more than noise in the end. Not much since has changed for the better has it.

by Kjeldorian | 30th May 22, 4:15pm 1653884152

Supermarkets

Insurance

Banking

Building Materials...

by Advisor | 30th May 22, 4:40pm 1653885609

Those sectors combined contribute a significant share of NZ's business dealings and employment. If the government brings even a semblance of competition back into these broken markets, they could mend some of their maligned reputation on handling runaway inflation in NZ.

by RickStrauss | 30th May 22, 4:48pm 1653886136

And along with those we also have a Commerce Commission whose job includes ensuring competition.

by Nzdan | 30th May 22, 6:51pm 1653893492

The last time they deemed it fit to ensure competition was with telecommunications, something that's not a basic necessity of life. So they split up Telecom and not long after the Government started rolling out Fibre......

by J.C. | 30th May 22, 4:24pm 1653884651

Big, loud government talk to the Supermarket cartel. Noise, no more no less.

Yes. Little more than virtue signalling. Nothing will happen because the commercial opportunity for new entrants is likely to be limited or non-existent (ROI and ROE [effort]).

by Advisor | 30th May 22, 4:42pm 1653885730

Won't expect anything to change here. This lot lacks the gall to deliver on this issue, the opposition has vested interest in the status quo (no surprises there).

by Brock Landers | 30th May 22, 4:55pm 1653886505

The esteemed journalists at "News Hub" are saying that so many people are now trying to escape Jacindastan that there simply aren't enough flights.

https://www.newshub.co.nz/home/travel/2022/05/not-enough-flights-to-cop…

✈️ ✅

Be quick!

by fortunr | 30th May 22, 5:06pm 1653887167

sadly you can't blame them - especially with a Government focused on wokeness (and blatantly ignoring the housing Ponzi and rampant inflation), rather than trying to address the structural problems of the NZ economy (including low productivity and lack of competition in many sectors, and an economy focused on parasitic housing speculation rather than on real productive activities)

by J.C. | 30th May 22, 5:13pm 1653887628

I think you misinterpreted this. This is more along the lines of the world needing NZ workers because they are so good.

The exceptionalism narrative.

by kiwikidsnz | 30th May 22, 5:49pm 1653889790

Do you wonder why you only hear of private sector workers leaving NZ & never public sector "servants" ?

by Neonlights | 30th May 22, 5:59pm 1653890395

Do you have a source for that?

It’s really easy to bash the public sector, and I don’t doubt some parts of it are unproductive but the 12 months I spent working for a crown entity were up there with the hardest of my entire career - the whole thing runs on the goodwill of the staff and I went back to the private sector as I was getting burnt out.

by sit23 | 30th May 22, 6:08pm 1653890915

What would be the point of the Kiwibuild and Managed Isolation managers going overseas looking for work with that employment on their CVs? Their obvious career move is with the Three Waters Department, or the new centralised Health Board management structure. Plenty of opportunities for people of their skills there!

by J.C. | 30th May 22, 6:22pm 1653891740

A colleague who ran IT for a global automotive mnfer in Europe returned to NZ and was involved in the Super City initiative for the Aickland Council. Almost had a mental breakdown because of the incompetency and nonsense surrounding him. Ended up walking out.

by Independent_Observer | 30th May 22, 6:34pm 1653892492

Yes my experience with public sector has been excessive bureaucracy resulting in exceptionally poor productivity and toxic workplaces (across multiple agencies). Those with any ambition or conscience departed, leaving the lazy and incompetent behind to play games of power/domination with one another while wasting millions of tax payers funds.

And if you argue against the culture or try to improve productivity you get told that you're are out of line and shutdown by whoever has the most power within the bureaucracy....

Ultimately it results in a competition to see who is the best at being the worst.

by HouseMouse | 30th May 22, 6:50pm 1653893456

Well put!!!

I reckon the bureaucracy (not front line workers) could be slashed in half, staff numbers-wise, and not only would you not lose anything in terms of performance, rather you would gain.

And the big savings in wages could go to where we need it - frontline workers in health, education etc.

by J.C. | 30th May 22, 7:08pm 1653894490

Yes my experience with.........Ultimately it results in a competition to see who is the best at being the worst.

Such a great comment. You paint a picture that resonates with me.

by HouseMouse | 30th May 22, 6:32pm 1653892361

My observation is that central government bureaucrats make things hard for themselves, by typically over complicating things.

They also have lots of generalists working on things that specialists should be working on.

by kiwikidsnz | 30th May 22, 6:42pm 1653892936

I worked in the private sector all my 45 year working career, a range of NZ SMEs and large global multinationals.

In none of these organisations was failure ever an option: quite different from the daily reports of public sector incompetence & failure to deliver while grossly wasting taxpayers & ratepayers hard earned money.

The key performance difference is robust market competition which over time ensures only the strong, committed & successful in meeting customer expectations survive.

Suppliers working hard isn't an essential customer requirement: dependable delivery in full on time to the required quality is.

by Ahuhyeah | 30th May 22, 7:26pm 1653895582

And yet

https://figure.nz/chart/mBoxAr1YlOeOcshS-XlCZPMMzubrrUxpp

by kiwikidsnz | 30th May 22, 8:32pm 1653899564

Illustrates my point.

by singautim | 30th May 22, 10:41pm 1653907312

In fact if you are working hard full-time then you have no resilience. The best managers don't work hard (a) they have time to think and (b) when the s*** hits the fan they can reallocate their time.

by agnostium | 30th May 22, 11:52pm 1653911536

Worked in both and so a little bit in the not for profit sector. Did not see a huge amount of difference between both sectors to be honest. The main difference that I did see us that public sector are less motivated by money and more by trying to do good. Public sector work seems to be more complex, private sector work more complicated. In the private sector it's easier to measure how effective you've been as it's related to a very measurable output (how much money you've got from clients) public sector much harder to measure success, you can work your nuts off for a year or so and churn out some next level work that would be utterly transformational for the organisation (or society more widely) but due to political considerations the whole thing just gets paused or bastardised.

One of the other reasons the public sector struggles is that they can't pay staff as much as the private sector. It's easier to pay a consultant twice as much for the same work as no-one reports/monitors on the hourly charges of contracted works but quite often public entities have to report on how many people earn over certain thresholds.

My hourly rate in the private sector is 2.5 times the rate the organisation paid for me when I worked for them. Same work, only now I get to turn down the shit jobs and don't feel guilty about it.

by northman46 | 30th May 22, 5:13pm 1653887628

T-minus 12 weeks for us ✈️ ✅

by Albert2020 | 30th May 22, 5:23pm 1653888203

Did you actually read the article Brock? Nothing to do with reduced air travel capacity after planes have been sitting in a desert for 2 years and kiwis being restricted from travel??? Nah, your version of events sounds much more plausible.

by Independent_Observer | 30th May 22, 5:27pm 1653888433

The way I read it was that there quite a lot of younger people interested in leaving the country (which aligns with discussions I've had with people in 20's and early 30's who can't afford housing).. And yes there is also reduced capacity airline wise at present...

by Albert2020 | 30th May 22, 5:32pm 1653888770

Of course there is; working and travel overseas is a rite of passage for that demographic which they have not been able to undertake for 2 years. I did it and I expect kiwis to continue to do it. But to suggest (like Brock is alluding to) that they are all leaving because of a horrible socialist leading the country is just immature dribble.

by Independent_Observer | 30th May 22, 5:45pm 1653889538

Ah ok I'll let you and Brock argue out your political injustices between you.

I'm sure Brock blaming Adern, and you getting angry with Brock, will make life all the very much better for all involved.

by northman46 | 30th May 22, 5:45pm 1653889538

I don't know. Brock has a point. We've hemorrhaged our social network (skilled late-20s to mid-30s) over the past year. It was one of the factors in our own decision to leave in a couple of months. And none of them have plans to return in a year or two.

by Rex Pat | 30th May 22, 6:53pm 1653893584

Ours left in February and March. We hope they don’t return anytime soon. It’s a big world out there, full of opportunities.

by Brock Landers | 30th May 22, 5:47pm 1653889634

Hi Albert2020,

I don't see the term "horrible socialist" there. We know you love a good rant, but it would be better for everybody if you endeavoured to stick to "non-fiction" content.

Cheerio.

by Smudge02 | 30th May 22, 4:55pm 1653886521

I can’t wait to see this “at pace” dealing to the supermarket monopoly by the Govt. I mean I literally can’t wait, I’m 50 years old so will never see it in my lifetime!

by HouseMouse | 30th May 22, 5:51pm 1653889902

‘At pace’ haha, possibly the most inappropriate rhetoric used by any government in our nation’s history

by Baywatch | 30th May 22, 4:55pm 1653886549

Geez rainy Monday..after reading the above comments even the Ukraine sounds appealing

by waymad | 30th May 22, 6:28pm 1653892088

Imagined presser following PR release from our esteemed Foreign Minister:

Minister: "I am planning to visit the Solomons with a confirmed budget, in order to ascertain which members of their Parliament have been insufficiently aligned with China's largesse. I will offer them significant Koha to rethink their alignment with our own longstanding commitment to Pacific matters in general and to Indigenous economic wellbeing in particular."

Journo: "You're gonna bribe them? But shurely China has beaten us to the punch there".

Minister: "According to my sources, they didn't get everyone whose economic wellbeing is sub-par thanks to centuries of colonisation. I plan to rectify that situation."