A review of things you need to know before you go home on Monday; some minor TD rate changes, no employment growth, GMT's new $100 mln bond offer, Mitchell in ring, swaps slip, 90 day bill rate up, NZD firms

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

MORTGAGE RATE CHANGES
No changes today

TERM DEPOSIT RATE CHANGES
Both NZCU South and NZCU Central made term deposit changes today.

O', OH
Data out today on NZ's PSI (services index) indicates a sector that is expanding at a very healthy rate. Even though the January level is slightly lower than the average of the past 3 months, it does not indicate cause for concern. Except one metric does; the employment sub-index which has slipped to a level indicating the steam has gone out of hiring in the services sector. On it's own that is not a big thing, but when you realise the factory PMI also showed the same signal last week, you realise that perhaps NZ's economy is no longer as employment-friendly as it was in 2017.

HAPPY WITH 4% IN A RISING YIELD BOND MARKET?
Goodman Property Trust today announced that it has opened an offer of up to $100 mln of 5.5 year fixed rate senior secured bonds, maturing on 1 September 2023. It's new funding, not repaying an existing bond. They will have a BBB+ credit rating and will offer an issue margin range of +1.2% - 1.3% above swap, subject to a minimum interest rate of 4.00% pa. At today's 5 year swap rate of 2.72%, that suggests the minimum 4% yield is likely to apply. There will be no public pool - to get some you can only do so through an adviser. Or you can wait. Transpower is considering a new retail 7 year bond offer now and details are expected before the end of the month.

ANOTHER ONE
A relative unknown has thrown his hat in the ring to be the next leader of the National Party. Inside the party Mark Mitchell is seen as "the future", but outside he has a lot of profile building to do.

OLD HAT?
In 2017, two out of every thirteen visitors to Australia were Kiwis, by far their largest source of tourists. But the rate of growth has peaked. At 1.35 mln per year, that level is almost the same as for calendar year 2016.

THOUGHT POLICE
Chinese nationalisim politics is reaching into Australian employment practices.

BENCHMARK INTEREST RATES SLIP
There has been a further slight retreat in swap rates today, in the absence of US bond market activity. Rates 3-10 years are down -1 or -2 bps. The 90 day bank bill rate is back up another +1 bp to 1.92%. Even though tiny, these recent movements up re[present the most in 2018 and take this benchmark back to levels we last had in mid-November 2017

BITCOIN LITTLE CHANGED
Bitcoin is now at US$10,417, down slightly from the open this morning.

NZ DOLLAR FIRM
The Kiwi dollar is settling in at 74 USc, at 93.3 AUc and 59.5 euro cents. That puts the TWI-5 at 74.7 although with a slight firm tone is across the board - so the TWI is inching up to the top of its recent range.

This chart is animated here. For previous users, the animation process has been updated and works better now.

Daily exchange rates

Select chart tabs »
The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

15 Comments

Can we have a National Party leadership survey put up David?

every day someone new decides they should be leader, soon it will be last two to decide which of the 57 should be leader LOL

I think they’re going to let everybody have a turn at being the leader.

When Helen Clark overruled the Commerce Commission , and allowed Fonterrible to form as a near monopoly over the NZ dairy industry ... she underpinned their ability to trade as a " too big to fail " enterprise ...

... the board had a free pass to pretty much do as they like ... including snubbing the struggling dairy farmers themselves when they gifted Theo Spurious an $ 8 Million salary ...

I cant get past the bit that said it looks like they will write off 1 billion. Blardy heck

That Rod Oram report makes for horrific reading... thks for sharing AJ

Fonterra says it is further hobbled by disclosure laws. It says that Zhu and Priem can only tell it what Beingmate says publicly. They cannot share with it anything they learn from within Beingmate. Presumably, that must also significantly constrain any conversations Spierings has with Xie.

Why does someone not ask Fletchers Auditors some really tough questions ?

And if they wont answer the questions ,citing client confidentiality, ask the NZX , they are obliged to give a statement , its in the public interest after all

Why does someone not ask the Auditors of Fletchers what they really knew 10 months back in March 2017?

There is no way in hell that Fletchers could have lost so much money in such a short time, February to Sept 2017 , the rot had to have started way before the end of the 2017 FYE .

Basically ( and somewhat simplistically ) they have lost a Billion Dollars over 4 quarterly reporting periods or they want us to believe they lost this much in 10 months since the 2017 FYE or around 100 million every 20 working days ............ if the Directors did not know then what the hell did they know ?

And this brings to the fore some really serious questions for the auditors

Did the auditors see nothing ........ I doubt it , troubles would have been sticking out like the proverbial dogs balls way back in 2016/17
Were there adequate provisions for these losses on contracts ( it seems not ) ?
Why was Fletchers apparently hell bent on maintaining the 2017 dividend ?
Did the Auditors deliberately not disclose the material deterioration in trading conditions and the provision for loss-making contracts ?
Did the auditors collude ( heaven forbid ) with the Directors to avoid bringing the bad news out to prevent a share price rout ?

Whats the truth?

Given that this is a top 5 NZ company its time to stop the obfuscation and answer some pointed and direct questions .

Its been a feature of our business landscape for too long ............. Companies that dont come clean with shareholders , many of whom are dividend dependent investors , Directors paid 7 figure salaries for doing what ?

Its time we had transparency and accountability .

And like a guilty man the Fletcher auditors are expecting someone to pitch up and ask these questions .............. of that you can be sure .

They almost certainly have a ready statement for any nosey hack, cheeky enough to poke one of the big 4 with a pointy question .

I wonder if anybody cashed out their shares in the past 18 months and what information did they have access to? Smells like the books were being cooked.

both Fonterra and fletchers had one thing in common, maybe he should stick to banking.
apart from air new Zealand he does not have a very good track record,
https://www.nbr.co.nz/article/former-fonterra-director-ralph-norris-spel...
https://www.stuff.co.nz/business/industries/101462307/the-ascent-and-des...

So if I have the timeline right, Norris was dirty deep in Fonterra at the time of the Beingmate purchase. Gee good one Ralph. The 2 billion dollar man. As an aside I have just had to take action on a rellies accounts. I have had several meetings with the accountant, I wasnt that involved to start with that I studied the accounts. However after a couple of off comments from the accountant I dug into the accounts. To find incredible ineptitude. To check my suspicions I took these accounts to my accountant. She verified the total ballsup. I guess one finds laziness and incompetence everywhere. Even those we think are the smartest.

Japan is certainly the place to be if you want a bank loan. According to the Nikkei newspaper, of the roughly JPY471trn in loans made by banks in 2017, a full 62% of them earned the bank an interest rate of less than 1% annually. In fact, only 10% of loans - mostly to consumers and small businesses - had interest rates of more than 2%.

https://asia.nikkei.com/Business/Trends/Nearly-two-thirds-of-Japanese-lo...

Japan is certainly the place to be if you want a bank loan. According to the Nikkei newspaper, of the roughly JPY471trn in loans made by banks in 2017, a full 62% of them earned the bank an interest rate of less than 1% annually. In fact, only 10% of loans - mostly to consumers and small businesses - had interest rates of more than 2%.

https://asia.nikkei.com/Business/Trends/Nearly-two-thirds-of-Japanese-lo...

Fletchers have most definitely got too big to manage efficiently in a busy economy.
More often than not BIG can equate to cumbersome wreck. Of note that would be upper and middle managers ensuring they collect their salary first. Ensuring efficiency of the company second. Easy to hide ..