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A review of things you need to know before you go home on Monday: Change in the ANZ NZ hierarchy, Synlait CEO goes, S&P see uncertainties for local government

A review of things you need to know before you go home on Monday: Change in the ANZ NZ hierarchy, Synlait CEO goes, S&P see uncertainties for local government

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

MORTGAGE RATE CHANGES
There were no changes today.

TERM DEPOSIT RATE CHANGES
There were no changes today.

NO NEW COMMUNITY COVID CASES MONDAY
The Ministry of Health reported no new community cases of COVID-19 on Monday, but seven more cases in managed isolation. The total number of active cases in New Zealand currently is 100. The community case announced on Sunday night, "Case C," is a close contact and colleague of the worker at the Grand Millennium who tested positive last week. This person is now at the Auckland Jet Park with their partner. The partner of Case C returned a negative test. (Monday's full Ministry of Health statement is here).

CHANGE AFOOT AT ANZ NZ
The June departure of Craig Mulholland, ANZ NZ's managing director of wealth and private bank, will see some structural change at the country's biggest bank. ANZ says its private bank arm will report to personal banking chief Ben Kelleher, and the wealth business will be renamed funds management. ANZ is advertising for a new managing director of funds management, who will report to CEO Antonia Watson, and a new private bank managing director will report to Kelleher.

SYNLAIT MILK CEO RESIGNS
Synlait Milk Ltd says its CEO since September 2018, Leon Clement, has resigned. Clement will leave the role at the end of April. John Penno, Synlait's co-founder, former CEO, and current director, will serve as interim CEO until a permanent replacement is appointed. Synlait says a recruitment process will get underway shortly.

In late March Synlait said it had "proactively engaged" with its bankers to increase its leverage ratios on loan covenants, whilst forecasting a "broadly breakeven" July financial year after reporting a 76% plunge in half-year profit to just $6.4 million.

S&P SEES LOCAL GOVERNMENT UNCERTAINTIES
S&P Global Ratings says there's more uncertainty than usual over the extent to which NZ councils will deliver the budgets they propose over their 2021-2031 long-term plans, especially future infrastructure requirements. Most NZ local and regional governments are likely to have rising infrastructure budgets, which could erode headroom at their current rating levels, the credit rating agency says. Proposed reforms to water supply, storm water, and waste water could reshape the landscape of some councils. S&P does say, however, that local councils' credit quality remains favourable, with NZ's economy and fiscal outcomes rebounding quickly from the COVID-19 pandemic.

EQUITY MARKETS CAUTIOUS
Asian share markets began the new week cautiously. Reuters reports investors are waiting to see if US earnings can justify high equity valuations, while bond markets could be tested by what should be strong readings for US inflation and retail sales this week. In Australia the ASX 200 had fallen by as much as 0.5% with shares in iron ore miners, Commonwealth Bank and Macquarie Group down. Here in New Zealand, the NZX 50 Index was down 0.69% at the time of writing.

NZ DOLLAR LITTLE CHANGED
The Kiwi dollar is little changed over the day, latterly at US70.24 cents, at AU92.39c, and at €59.08c. 

BITCOIN SLIPS
Bitcoin is down US$29.5 since this morning at US$59,807.05. 

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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Source: CoinDesk

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22 Comments

I found this little sentence in today's ANZ's Research paper on the LSAP:

"We expect it will take decades to fully unwind QE."

Pretty much, have a look at how the US Fed got on with the unwinding of their QE programme from 2008...

Could be.
But some things have a habit of being unknowable. (From something else I was researching today, and written just 2 months before everything fell apart so spectacularly)

The trading demonstrated an abrupt shift of attitude among speculators, who as recently as a week ago were betting big that the currency was on the rise....The fall in the dollar has added to the financial markets' fears of resurgent inflation, and bond prices plunged yesterday. Gold, meanwhile, fell only a bit, losing $1...it is too early for people to start looking for new lows only a week after the market thought the dollar was going to go through the stratosphere.''...Not everyone believes the dollar is going to fall further, including monetary authorities around the world....The possibility of central bank intervention, continued worries about the Middle East and new evidence that the American economy is expanding should underpin the dollar.

All sounds spookily familiar.
https://www.nytimes.com/1987/08/20/business/currency-news-dollar-s-fall-...

it will never unwind --- look back to 2008 -- still unwinding from that -- and now Covid and there will be similar events probably more frequent going forward -- with similar money printing responses to keep it all going!

The only possible outcome is hardly an unwinding more like a complete and utter explosion - Ground Zero will not be pretty

One very bad one is local government. Their increase in debt is done with no intention of paying it down. Not even considered. So it will be on their books at whatever the interest rate is applicable in 20, 50, 100 years time.

Yvil
Agreed.
I think that 18mths ago we were in a position where RBNZ would be starting to do so but clearly Covid has come at an inopportune time and actions over the past year are going to put that back for a considerably longer time.
Realisation of Covid a year back would have been considered a real worse case scenario for those at RBNZ.

Write it off... not difficult. This is the age of funny dunny munny

Starting to hear more stories about developers going bust, time will tell if these are isolated events or something bigger:

https://www.nzherald.co.nz/business/who-wants-69m-from-gary-groves-the-i...

What other developers are going bust?

A close friend is developing 68 apartments in Henderson, the building is nowhere near finished and he already sold 80% of the apartments. As a result he is onto another site to undertake a bigger apartment development.

I hope he's not superstitious! 13, left to sell.

Clearly a few Sharesies and others concerned about the precipitous and prolonged falls in Synlait and A2 share prices . Surely the Government or at least the RBNZ could intervene and give a handout to prop up the market. At least bank shares are above pre Covid levels.

People would be more comfortable holding milk equities if such companies went down the 'value-added-route'.

It possibly is just that simple.

I do hope your post is tongue in cheek cowpat - at least with shares there is a fair price discovery (with a smatter of insider trading).

Synlait CEO was based in Vietnam and Sri Lanka when he worked for Fonterrible. Anchor brand has done well in SL. Not a good sign if he's resigning.

The Synlait ethos of miles ahead of Fonterra - they are dinosaur-era in comparison.

I suspect the harder task is to find a CEO who gets what they're about.

How does Synlait business model succeed long term when it’s cost of goods ( milk ) is based off its main competitor ( Fonterra ) ? .
A good CEO should be seriously be asking questions.

The charts of both A2 and Synlait, technically appear to offer no relief to existing shareholders, meanwhile in Biitcoin land , the chart looks ready for another moon landing.

Leon Clement was dumped from Fonterra in a dead wood clean out. I can’t believe he landed on his feet at Synlait. Let alone in the C-suite level.

He’s always struck me as well over his level of competence.

Leon Clement was dumped from Fonterra in a dead wood clean out. I can’t believe he landed on his feet at Synlait. Let alone in the C-suite level.

Yes. Knew quite a few of them. Jose Miguel was great.

Inflationary pressures abound... will the central banks raise interest rates, decimating asset prices, or will they let keep flogging the economic dead horse and inflation run wild? Interesting times

depends how long Adrian waits before going to specsavers and finally gets to see the inflation that we all see,in the email from contact putting power up 8%,or the whangarei district council rate increse of 6.5%,or the numbers on the gas pump that are 10% higher than a few months ago.