Latest / The SME Stream / Will sticky inflation resist RBNZ moves Plus, Mag7 earnings, Precinct Properties fast-track wobble

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Will sticky inflation resist RBNZ moves Plus, Mag7 earnings, Precinct Properties fast-track wobble · The SME Stream

• 0:00
  Speaker 1: Time now to talk business with our partner's fullsythe bar.
• 0:04
  Speaker 1: Let's look at inflation. This is for the December quarter.
• 0:06
  Speaker 1: December quarter inflation was running at three point one percent.
• 0:10
  Speaker 1: Now the problem. That is higher than what it was
• 0:13
  Speaker 1: expected to be. Also higher than the three percent that
• 0:17
  Speaker 1: we saw full September, higher again than the two point
• 0:21
  Speaker 1: seven percent that we saw for June. So what we've
• 0:23
  Speaker 1: seen happen in the back end of last year is
• 0:25
  Speaker 1: inflation tick up and up and up again. What happens
• 0:30
  Speaker 1: from here and what does this mean for the Reserve Bank.
• 0:32
  Speaker 1: Let's not forget Arna Breman, who's the new Reserve Bank governor,
• 0:35
  Speaker 1: is going to make a call along with the rest
• 0:37
  Speaker 1: of the Monetary Policy Committee next month about where to
• 0:40
  Speaker 1: take interest rates. Probably that will hold, but what happens
• 0:44
  Speaker 1: later in the year and what does that mean for
• 0:46
  Speaker 1: the economy. Joining us now is Garth Bray, host of
• 0:49
  Speaker 1: the Herald Now Business program, which is kicking off this
• 0:51
  Speaker 1: year too.
• 0:52
  Speaker 2: Garth, Good morning, Happy new year.
• 0:54
  Speaker 3: Wonderful to see you here. Ryan, right nearly on an
• 0:56
  Speaker 3: Auklan aniversary a weekend. We're hard at work, no matter what.
• 0:59
  Speaker 1: I know, even if everyone else north of Topor is
• 1:02
  Speaker 1: at home. Yeah, relaxing, hopefully watching, hopefully watching the show
• 1:05
  Speaker 1: this morning. Now, the inflation didn't quite get the memo,
• 1:09
  Speaker 1: did they.
• 1:10
  Speaker 3: Inflation number, Hello, prices you should be coming down. But look,
• 1:13
  Speaker 3: we were maybe sort of worried and expecting that what
• 1:18
  Speaker 3: we've seen. I guess out of this is administrative inflation.
• 1:21
  Speaker 3: Your council rates and that kind of stuff, and energy
• 1:23
  Speaker 3: price is still really really sticky. And I guess the
• 1:26
  Speaker 3: problem for the Reserve Bank when it tries to figure
• 1:27
  Speaker 3: out how what to do about this is that those
• 1:30
  Speaker 3: don't tend to be terribly responsive to a change in
• 1:33
  Speaker 3: interest rates. I mean, interest rates tend to sit influence
• 1:35
  Speaker 3: investment decisions, consumption, that kind of stuff. People are, you know,
• 1:39
  Speaker 3: potentially feeling more comfortab about taking on more debt and
• 1:41
  Speaker 3: so on. But if you're looking at some of the
• 1:43
  Speaker 3: structural problems we've got in there, that's going to take
• 1:45
  Speaker 3: some big move, some sort of long term plans to
• 1:49
  Speaker 3: sort of shift productivity. That kind of stuff such tricky. Nonetheless,
• 1:52
  Speaker 3: I mean, the numbers are the numbers. This is above
• 1:54
  Speaker 3: that range, that three percent range that the RBNZ is
• 1:56
  Speaker 3: supposed to hit. They'll be keeping a pretty careful watch
• 2:00
  Speaker 3: not going to jump on this in February eighteen when
• 2:02
  Speaker 3: they next look at the OCA, but you're already seeing
• 2:05
  Speaker 3: I guess, banks across the board saying, look, there could
• 2:08
  Speaker 3: be one, there could be two OCR lifts before the
• 2:11
  Speaker 3: end of the year, probably third and fourth quarter, and
• 2:14
  Speaker 3: that all starts to color the picture of E banks
• 2:16
  Speaker 3: when they're trying to work out where to put those
• 2:18
  Speaker 3: longer term rates, and you know, you'll start to see
• 2:21
  Speaker 3: some of those better deals sort of preep out of
• 2:22
  Speaker 3: the market they've already sort of favored pretty fast.
• 2:24
  Speaker 2: Yeah, they have almost like it blink and you'll miss them.
• 2:28
  Speaker 1: Yeah, but how can this be the case with people
• 2:30
  Speaker 1: will be saying we're only just coming out of the
• 2:33
  Speaker 1: mess and then whatever, within six months, we're going to
• 2:36
  Speaker 1: be running too hot and we'll need to hype rates again.
• 2:38
  Speaker 3: Well, and it's not like they're going to go to
• 2:41
  Speaker 3: the moon, right because they're still at two point two five,
• 2:43
  Speaker 3: even at two point seven five, they're still below what
• 2:45
  Speaker 3: you'd probably consider the neutral rate. I guess it's just
• 2:48
  Speaker 3: like you know, medicine for the patient, and they're just
• 2:51
  Speaker 3: going to say, hey, we need to really read back
• 2:53
  Speaker 3: off that longer term medication that you've been taken economy.
• 2:56
  Speaker 2: You need to just chill out a little bit. She'll
• 2:58
  Speaker 2: kill you jet.
• 2:58
  Speaker 1: Now let's talk about the Magne since seven, we've got
• 3:00
  Speaker 1: four of the seven reporting this week on this is
• 3:03
  Speaker 1: the AI firms.
• 3:04
  Speaker 3: Yeah, and these are the dominant players in the US market,
• 3:07
  Speaker 3: the dominant players and the games that we've sort of seen,
• 3:09
  Speaker 3: but actually they've not been fearing too well. So I
• 3:10
  Speaker 3: think Meta and Microsoft are the two main ones out
• 3:14
  Speaker 3: of the blocks. I think Tesla as well. They're still
• 3:16
  Speaker 3: sort of hanging in there as a mag seven. They'll
• 3:17
  Speaker 3: be up to Thursday later this week, but it's a
• 3:20
  Speaker 3: real test because they have dropped off the sheer market
• 3:23
  Speaker 3: highs that you sort of saw with them back in September,
• 3:26
  Speaker 3: and it's a real I suppose investors looking going, hey,
• 3:30
  Speaker 3: you can't just say AI anything now.
• 3:32
  Speaker 2: It's like which.
• 3:33
  Speaker 3: Horse is looking more likely to do well in this
• 3:35
  Speaker 3: horse race? And people starting to make pips and make bets.
• 3:38
  Speaker 3: But generally, I suppose if they don't come in with
• 3:39
  Speaker 3: some pretty impressive ficks and pretty impressive numbers, it's going
• 3:43
  Speaker 3: to take a bit of confidence out of that and
• 3:44
  Speaker 3: buy a picture of the U s and.
• 3:45
  Speaker 1: P Now we have just spoken to an entrepreneur on
• 3:48
  Speaker 1: the program set up the Betel Guardian lives in the
• 3:52
  Speaker 1: city knows it well, told us we need to do
• 3:55
  Speaker 1: more investment in the CBD, and.
• 3:58
  Speaker 2: Now we've got a bit of a heckup.
• 4:00
  Speaker 1: This is for precinct properties in their plan to redevelop
• 4:03
  Speaker 1: a large area of the downtown.
• 4:05
  Speaker 3: And anyone that knows Auckland and Orcan's downtown. There's a
• 4:07
  Speaker 3: downtown car park which is pretty much the only place
• 4:10
  Speaker 3: that you can park now in downtown at a reasonable rate.
• 4:13
  Speaker 3: They took that over i think just before Christmas, purchased
• 4:16
  Speaker 3: it for the council of about one hundred and twenty million,
• 4:18
  Speaker 3: and they are looking at a roughly one billion dollar project,
• 4:20
  Speaker 3: a couple of towers they're going to put in their butt,
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  Speaker 3: a fast track and naval they've been part of the
• 4:25
  Speaker 3: part of the legislation. But the fast Track didn't mention
• 4:28
  Speaker 3: that they were going to put a hotel there, just apartments,
• 4:30
  Speaker 3: so they had to do a little tweak just before Christmas,
• 4:32
  Speaker 3: and that's meant the precinct pulled its application resubmitted it.
• 4:36
  Speaker 3: There will be some costs involved in that, because you've
• 4:38
  Speaker 3: got to stump up with the thick end of half
• 4:40
  Speaker 3: a million dollars. When you put an application into the
• 4:42
  Speaker 3: fast track, they're working out the refunds and so on.
• 4:45
  Speaker 3: That's kind of the jump change. The real problem is
• 4:46
  Speaker 3: does this push that redevelopment even sort of further down
• 4:50
  Speaker 3: the track for the people that want someone to park
• 4:51
  Speaker 3: when they're nipping into the shops and Akland. If you're
• 4:53
  Speaker 3: still coming in, it's probably good news, but I guess
• 4:56
  Speaker 3: probably just another sign of how tricky it is to
• 4:58
  Speaker 3: try and get that kind of redevelopment and that kind
• 5:01
  Speaker 3: of regeneration that Andrew Barnes the chap of mentioning that
• 5:05
  Speaker 3: was talking about.
• 5:06
  Speaker 1: Appreciate your Tom. Just want to Garth thank you. That
• 5:08
  Speaker 1: is Garth Bray. He is host of Herald Now Business
• 5:12
  Speaker 1: and we talk business every day here on Ryan Bridge
• 5:15
  Speaker 1: Today thanks to our partner's full sythe Bar