Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
Nothing to report today.
TERM DEPOSIT RATE CHANGES
NZCU Baywide tweaked their 5 month rate.
BIG PROBLEMS, BIG SPENDING
The big economic news of the day is the 'new' $28 bln decision to "invest in Auckland transport infrastructure". You can read the Plan in detail here, or our summary here. Regular readers will know we try to keep track of all these major Auckland projects, and today's new ones have pushed the totals to well over $50 bln. That is a huge pipeline of impending construction work. Some will be funded from Auckland Council resources, some from new taxes (the regional fuel tax), some from central Government. In the end, the real source of all this money are taxpayers.
A GROWING IMBALANCE
As at March, there were 15,955 real estate agents licensed to work in New Zealand. That number includes 1,906 "agents", 389 "branch managers" and 12,726 "salespersons". 931 "companies" are also registered. All up, this is +3.7% more than a year ago. In Auckland, the total is 7,055 or 44% of the national total. But the Auckland numbers grew very little. These numbers are growing despite sales volumes falling -14.4% nationally and down -20.0% in Auckland. Auckland accounted for just 29% of all sales even though they have 44% of all agents. While it is true it has long been the case where a minority of agents do the majority of the business, these trends indicate a growing imbalance.
DYNAMIC NEW BOSS
Kiwibank has a new chief executive. Steve Jurkovich, who oversaw strong growth of ASB's rural and corporate lending, will succeed Paul Brock who was apparently shown the door after a series of unfortunate and expensive stumbles - and two new state-owned cornerstone shareholders in the NZ Super Fund, and ACC.
INVESTOR LOAN GROWTH CAP TO GO
The Australian Prudential Regulation Authority said it plans to remove its investor loan growth benchmark and replace it with more permanent measures to strengthen lending standards. The 10% benchmark on investor loan growth was introduced in 2014 as part of a range of actions to reduce higher risk lending and improve practices. Since then they claim banks have "improved the quality of lending, raise standards and increase capital resilience".
KEEP OLD MEN OFF BIKES
Someone sent me this link. Perhaps it was a warning ...
FRIENDLY LOAN CO, UNFRIENDLY COLLECTION AGENCY
Payday loan operators offer debt at very high effective cost rates on a per annum basis. The key to getting people to sign up is to make it easy to apply. Often the business case of the credit provider is centered around a good proportion of borrowers being unable to pay on time, generating lucrative fee income. We warned about the risks in this article. And we built a popular calculator to ensure readers know upfront what the effective cost of debt is. Now we hear that there is a new strategy to get people to take out such loans - ATM-like machines in retail malls. Because they seem to be targeting naive and vulnerable shoppers, perhaps we need official intervention to prevent harm.
BENCHMARK INTEREST RATES RISE
Local swap rates rose today following Wall Street higher. The two year is up +2 bps, the five year is up +3 bps, and the ten year is up +4 bps. The UST 10yr yield is now at 3.02%, down -1 bp after Wall Street closed. The Aussie Govt 10 yr is now at 2.87% (up +2 bps). The China 10 yr is up +5 bps to 3.63%. The NZ Govt 10 yr is up +2 bp at 2.94%. The 90 day bank bill rate slipped another -1 bp to 2.03% today.
BITCOIN SLIPS
The bitcoin price has slipped today and is now at US$8,825 which is down -2% from this time this morning.
NZ DOLLAR HOLDS LOWER
The NZD slid significantly yesterday but that has stopped now and we are at 70.7 USc. We are also marginally weaker on the cross rates where we at 93.3 AUc and at 58.1 euro cents. That has the TWI-5 down to 72.6 and its lowest level in 2018. Some analysts think this new level is more realistic.
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12 Comments
Aussies going for the instant loan ATMs
http://www.abc.net.au/news/2018-04-26/rise-of-instant-cash-loan-machine…
Merchant of Venice stuff! Meanwhile, in peer to peer lending land, I think I'm seeing evidence of people using high interest P2P loans to build mortgage deposits in NZ.
I see it all the time but this is just from today (harmoney).
location Whangarei, House_owned 0 months, Loan Amount $50,500@14.49% (new loan)
location Hamilton, House_owned 2 years, Loan Amount ~$57,000 (refinance, loan issued ~2.5 years ago)
"Perhaps it was a warning"
Do you have an e bike?
Many car drivers have a very unhealthy attitude towards bikes. Other drivers are incompetent.
I got broken ribs from an incompetent one. After that on my commute I used the footpath when I could. Regardless of the rules. Slowed down where there were pedestrians of course. I'm sure that I wouldn't be here today if I hadn't changed my philosophy towards self preservation.
No cops showed an interest in me of course. They are more interested in ticketing those doing 104 kph on the open road.
Huh that's funny a incompetent cyclist crashed into my cyclist friend and smashed her up, (did not even stop to check she was ok & call an ambulance). She lost 2months of work and needed 2 surgeries. Then another incompetent cyclist drove head first into the side of a friends parked car and damaged the vehicle, did not even offer to pay for the damage or leave contact details, police still reported it as an accident involving a vehicle even though only one was responsible (the police found and contacted the cyclist but they still refused to pay). Then another incompetent cyclist decided to ride 2-3 abreast so they were swerving into the oncoming lane of traffic, going downhill, around a blind corner, (moron nearly killed himself). It takes all types and while my friends are very competent cyclists they too see a lot of issues in people in general not being risk adverse, safety conscious & responsible where ever they are. To be fair my partner is particularly raw as he has been assaulted in a wheelchair and with a walking stick by cyclists for being too slow & disabled. So it takes all types to be arseholes as well. The difference being that cyclists have all the options, they can walk, they can cycle, they can use PT, they could drive etc. The disabled often only have one option and that is a car or large disability van with lift. Guess whose access to basic services & community is at threat due to road closures & cycleway barriers preventing footpath access from the road. Not to mention the heart attack risks of cycling for many which is why we still have a lot of cycle deaths in public events in NZ.
I agree with you about cycling on the footpath. Both cyclists and car drivers are prone to mistakes but when cycle and car collide whoever is to blame it is the cyclist who is risking their life.
So I cycle as if I was 60 years younger - wild abandon - but the reason for commenting is to remind you that any pedestrian can be infirm, deaf and poorly sighted so please always conspicuously give way to pedestrians. Fortunately there are very few in North Shore.
"Panics do not destroy capital; they merely reveal the extent
to which it has been previously destroyed by its betrayal into
hopelessly unproductive works." John Stuart Mill
https://www.smh.com.au/business/banking-and-finance/westpac-dives-as-ub…
What happened Thursday. Tegel (TGH.NZX) received a takeover offer by Bounty Holdings New Zealand (subsidiary of Bounty Fresh Food) to buy shares at 1.23. The share price is currently 0.81. Tegel is in pretty fantastic shape with an intrinsic value of 1.18 based on future cash flows, low debt, good revenue, good earnings, and good growth prospects. share price still seems to be 0.81...
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