Latest / Best of Business / Sam Trethewey: Milford Asset Management Portfolio Manager on the market reactions to the latest OCR cut

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Sam Trethewey: Milford Asset Management Portfolio Manager on the market reactions to the latest OCR cut · Best of Business

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• 0:16
  Speaker 2: Sam Tratha Wey Milford Acid Management.
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  Speaker 3: Hi Sam, good evening, he.
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  Speaker 2: So, what did you make of that for sher and
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  Speaker 2: PIKEL result?
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  Speaker 3: Well, Ook, it was a big day from the market
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  Speaker 3: because Frishi and Bikel is the largest listed company and
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  Speaker 3: naturally has a big overall influence on performance of the inxidex.
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  Speaker 3: So the result the company delivered was what the market
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  Speaker 3: calls a beaten rays. So profit growth for the period
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  Speaker 3: came and ahead of guidance provided in August, and they
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  Speaker 3: also upgraded or raised guidance for the year ahead. So
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  Speaker 3: the company's core product, which is respiratory masks that are
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  Speaker 3: used in intensive care units and elsewhere in hospitals across
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  Speaker 3: the globe, grew at seventeen percent a year on year,
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  Speaker 3: So that's a continuation of pre strong growth that they
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  Speaker 3: have been seeing there for every long time. And the
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  Speaker 3: company also demonstrated some good cost control, benefiting a bit
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  Speaker 3: from the weekning New Zealand dollar to deliver overall profit
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  Speaker 3: growth of and pretty impressive thirty nine percent. So despite
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  Speaker 3: the headwinds from Trump's tariffs. They managed to pull off
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  Speaker 3: a big number there, so it's impressive company, world class
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  Speaker 3: technology and stands out when we look across the globe.
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  Speaker 2: Yeah, well, what impact does the tariffs having on them?
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  Speaker 2: How are they managing that?
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  Speaker 3: Yes, that's certainly been, I guess an area of concern
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  Speaker 3: for investors over this year, with the US essentially being
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  Speaker 3: Fresh and Pipers the largest customer, and the company is
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  Speaker 3: getting head on tariffs from product source Tire and Yu
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  Speaker 3: zeal On soldo into the US and about a third
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  Speaker 3: of their production as based here locally. So over the
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  Speaker 3: past couple of months, the team at Fresh and bikel
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  Speaker 3: have found a range of essentially manufacturing efficiency improvements to
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  Speaker 3: offset the cost of the tariffs. That's literally, in the words
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  Speaker 3: and the CEO, thousands of small changes across what is
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  Speaker 3: a very large production line to offset that impact on
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  Speaker 3: their cost base. And that's a positive compared to the alternative,
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  Speaker 3: say simply putting up prices and pushing it through to hospital.
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  Speaker 3: So there's more impact to come from taffs, but they
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  Speaker 3: backed themselves to continue to do that to offset the
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  Speaker 3: lost had the headline.
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  Speaker 2: Hey, what was the impact that you saw on the
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  Speaker 2: market today from the ocr cup.
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  Speaker 3: Yeah, that was the other big event. So I think
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  Speaker 3: the surprise across the market was clearly the optimism that
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  Speaker 3: it was expressed by the RBNZ that the easing cycle
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  Speaker 3: is now largely done and the economic recovery is underway,
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  Speaker 3: so reflected in what they provided in their forward track
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  Speaker 3: of where and straits are heading, that was above market expectations.
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  Speaker 3: So we did see the ki dollar jump higher I
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  Speaker 3: got across against key crosses on the back of that.
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  Speaker 3: But look going forward, I think there's two clear areas
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  Speaker 3: that will be interesting. So firstly, mortgage activity, given the
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  Speaker 3: message today as a catalyst for those with mortgages to
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  Speaker 3: rethink how far out they are fixed, and it was
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  Speaker 3: pretty hot topic of conversation in the press conference this afternoon.
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  Speaker 3: You could argue as well that the lack of refixing
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  Speaker 3: by mortgage holders onto those lower fixed term rates rather
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  Speaker 3: than floating, has been a key reason that we haven't
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  Speaker 3: seen the economic activity of economic impact of rate cuts
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  Speaker 3: flow through to activity so far. And then secondly, it's
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  Speaker 3: really around term deposits, so that three percent level where
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  Speaker 3: they're just sitting above at the moment, has been historically
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  Speaker 3: at sort of a level where MANI holders up to
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  Speaker 3: pend term deposits go hey, look I can do better
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  Speaker 3: than that. Three percent less tax is not worth it.
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  Speaker 3: They start to look for higher attends elsewhere, turns to
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  Speaker 3: things like guest dividend paying stocks on the sheer market,
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  Speaker 3: property companies, et cetera. That trend has been underway on
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  Speaker 3: the ns X in recent months and those companies has
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  Speaker 3: been strong performers. But they are the two clear things
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  Speaker 3: that do come out of this announcement that could flow
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  Speaker 3: through in the coming months.
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  Speaker 2: Sam always good to talk to you mate. Thank you, Sam.
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  Speaker 2: Tra through we have MILF Fedescid Management.
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