Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
The Co-operative Bank raised all its rates for terms of 3 years and longer. No bank has cut their floating rate in response to the OCR cut on Thursday.
DEPOSIT RATE CHANGES
The Co-operative Bank raised its TD offers for terms of 1 year to 4 years. NZCU South raised their 6 to 24 month TD offers.
MORE & YOUNGER
There are now more than 4.7 mln people in the country as residents. The latest data by Statistics NZ was updated today as at the end of September and it shows that our population grew by 84,800 in the year and is now 4,705,400. One interesting fact is that we are getting younger! In fact, the median age is now 37.1 years and that is the third year in a row where where it has fallen. We are now younger than the USA which has a median age of 37.9 years, than Australia where it is 38.6 yrs and Canada where it is 42 years. Our 37.1 median age takes us back to where we were in 2011. However, those over 65 now make up 15.0% of our population, up from 13.8% five years ago. Without the rise in migration which is younger, this ratio would have grown much faster.
FEWER & HIGHER
House prices set new record in Auckland but there was a big drop in sale numbers, according to REINZ data out today for October. Interestingly, there is no sign of the usual spring lift in sales in the housing market this year as sales numbers plummet. This was the sixth consecutive monthly decline and sales are now at their lowest level since January 2015. On an annual basis, house sales were down -14% from last year, due to equal declines in both the North and South Islands.
PAY CUT FOR HISCO, RISES FOR HEALY & MCLEAN
BNZ CEO Anthony Healy and Westpac NZ CEO David McLean both received big pay rises in their banks' latest financial years. ANZ NZ CEO David Hisco, however, saw his remuneration drop. Hisco's September year pay, including cash salary, incentives and a range of non-cash benefits, dropped A$399,330, or 9%, year-on-year to just under A$4.067 million. Healy's increased by A$446,606, or 23%, to A$2.378 million. McLean, who was appointed CEO in February 2015, received a A$592,783, or 37%, increase to A$2.181 million. ASB CEO Barbara Chapman's remuneration is never released by CBA.
A MORE MODEST OUTLOOK
We have the next dairy auction on Wednesday morning and last week we sensed lower prices in the dairy futures markets. However, today the sense is they are a little higher. With the falling exchange rate (see below), the gains in NZD could be quite strong. At present, the futures markets suggest a rise in WMP prices of about +3% (and in NZD, a rise of +5%). At the previous auction, the rise in WMP was +20%.
BIG WRITEOFF
Harvey Norman is a franchised retail chain. The latest publicly filed accounts show that "tactical support" to its franchisees (loans by HO to them that have gone sour and can't be repaid) have swelled to over A$0.5 bln. The brand needs the franchisees to push out the product, but the retail locations are doing it below cost - in this case, their advertising is real!
WHOLESALE RATES STEEPEN AGAIN
Another day, another sharp rise in longer term rates with the curves still getting steeper. Today they are up unchanged for 2 years, up +3 for 5 years, and up +6 bps for 10 years. The 1-5 curve is now +66 bps, its steepest since June 2014. The 2-10 curve is now +101 bps, its steepest since April 2014. The 90-day bank bill is unchanged at 2.08%. Around the world, there are fears investors will suffer from these rising rates, and in particular, corporate treasurers fear the 'bondcano' that is rumbling. Locally, ASB is saying that today's earthquakes could bring another "interest rate cut next year if economic disruption leads to a fall in confidence".
NZ DOLLAR WEAKER
The Kiwi dollar is in a downward trend and now at 71 USc which is more than 1c lower than this time Friday and more than 2½c lower than on Thursday. Roger J Kerr is speculating that the RBNZ may have intervened to push it down recently. On the cross rates, it is trading under 94 AUc, and is at 65.7 euro cents. The TWI-5 is at 75.7. Check our real-time charts here.
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16 Comments
Why are the CEO's paid so much?
CEO's of banks should be dull prudent types who play by the rules. Banks should be managed like utilities.
You only need to pay that kind of money for entrepreneurial creativity, but NZ does not need and should not want such expensive creativity in their banks.
This kind of creativity that you buy for this kind of money, when applied to a bank, is a kind that takes risks, finds loopholes, and pulls the wool over the eyes of the public while purloining their wealth.
Their imprudent aggressive lending has led to overpriced houses, a disproportionate residential investment sector, and FHBs missing out the opportunity to buy homes at reasonable prices.
We don't need this kind of person running our banks, NZ would be much better off without them.
The ultra rich are “scouts”, “experimenting with new styles of living”, who blaze the trails that the rest of society will follow. The progress of society depends on the liberty of these “independents” to gain as much money as they want and spend it how they wish. All that is good and useful, therefore, arises from inequality. There should be no connection between merit and reward, no distinction made between earned and unearned income, and no limit to the rents they can charge. Read more
Interesting the Stats on migration and our median age .
Basically DC reckons if we cut back on migration the number of over 65's as a % of the Popn. will increase , placing a greater burden on the NZ Super .
I wonder if the Retirement Commissioner has run a model on this scenario ?
The story about Harvey Norman is worrying ............. its indicative that retail is in a deeper quagmire than we realized .
I am still going to bang on about deflation ........... this is what deflation is all about , falling prices , business models that are unsustainable due to high costs, expensive wages , and expensive premises in prime locations, and a well informed buying public that knows and understands that the general level of prices of imported manufactured goods is falling .
I am a layperson , and even I can sense it .
I am delaying buying non -essential new stuff , because I am certain its going to be cheaper later .
Its very hard to make money when your core products are rapidly falling in value,(as consumer electronics are). The bigger companies rely on quantity discounts that require bulk purchases to obtain. Catch 22 is the bulk purchase requires holding stock that is becoming outdated before traditional stock turnover times are up . Smaller companies buying daily or weekly amounts via alibaba etc have an advantage in this area, that may offset the chains bulk buying advantage. They can also react quicker to new technology.
I suspect one reason none of the big consumer electronics chains have followed Dick Smith into the doldrums is that they also sell Furniture etc.
Awesome shots of trade from days gone by.
http://www.nytimes.com/2016/11/12/science/shipwrecks-black-sea-archaeol…
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