Latest / Best of Business / Shane Solly: Harbour Asset Management spokesperson on BNZ's performance of services index staying below 50

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Shane Solly: Harbour Asset Management spokesperson on BNZ's performance of services index staying below 50 · Best of Business

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  Speaker 2: Got more evidence the Reserve Bank did make the right
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  Speaker 2: call in cutting the OCR Last week BNZ Performance of
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  Speaker 2: Services indexes out was up almost four points to forty
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  Speaker 2: four points six in July. Shane Solely from Harbor Asset
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  Speaker 2: Management has been looking at these numbers for us.
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  Speaker 3: Hey, Shane, Yeah, Hey, Ever.
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  Speaker 2: Now it's still under fifty, so it's still contracting, right, That's.
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  Speaker 3: Right, And I think this is a really important thing here.
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  Speaker 3: We're still actually well below where we were in the GFC,
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  Speaker 3: and I think a lot of people if they know
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  Speaker 3: that when they see it out in the streets. But
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  Speaker 3: we're reading got a lot of work to do here.
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  Speaker 3: There was a little bit of life in the measure,
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  Speaker 3: so the recovery in terms of the activity and sales
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  Speaker 3: measure and actually a little bit of pick up in
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  Speaker 3: new orders. But this is still suggesting the economy is
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  Speaker 3: continuing to decline and the Reserve Bank, well, they need
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  Speaker 3: to keep moving with those cuts.
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  Speaker 2: And we've had a start to the August profit reporting
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  Speaker 2: season on the market today. What do you make of it?
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  Speaker 3: Yeah, a couple of interesting results. So two beats, two
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  Speaker 3: beats against the expectations and one mess. And the two
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  Speaker 3: beats Contact Energy and Freightways slightly better. Obviously Contact Energy
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  Speaker 3: a eleterriacity generator. They're hanging on to their balance sheet.
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  Speaker 3: They're talking about focusing on future investment and infrastructure to
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  Speaker 3: support growth and demand. Freightways not a bad result, but
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  Speaker 3: cautious about the outlook the next six months, but suggesting
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  Speaker 3: maybe as these rate cats come through they see a
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  Speaker 3: bit of recovery. But really for them it was Australia
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  Speaker 3: was there when the clanger. The real disappointment was atm
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  Speaker 3: L missed expectations. The stock price was actually down nineteen
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  Speaker 3: percent at one stage, and the management team really quite
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  Speaker 3: conservative about sales demand, particularly into China, with this unfortunate
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  Speaker 3: we haven't seen a real boost in terms of infants
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  Speaker 3: being born in the Year of the Dragon against expectations,
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  Speaker 3: and really just actually a shortage of formula supply and
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  Speaker 3: some higher cargo costs, particularly air freight, so a few
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  Speaker 3: things really pushing him back on expectations of a recovery
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  Speaker 3: in demand and margin. So yeah, tough day for a two.
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  Speaker 3: The stock has actually been really strong into this so
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  Speaker 3: little bit of the market perps getting ahead of itself.
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  Speaker 2: Oh what else are we expecting to see in terms
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  Speaker 2: of profit results for the rest of the week.
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  Speaker 3: Yeah, busy week here that this week we've actually got
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  Speaker 3: fifteen companies Tomorrow, we've got Mercury Energy Wednesday, Ebos, Fletcher Building,
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  Speaker 3: Sky TV Thursday, Auckland Airport, Genesis sky City Friday, Channel Infrastructure,
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  Speaker 3: the old ENZI Refining, inside X, the Stock Exchange, Port
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  Speaker 3: of Tower on a Spark, New Zealand, and Winton, which
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  Speaker 3: is the real estate developer.
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  Speaker 1: Yeah.
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  Speaker 2: And not only that, we've got a whole bunch of
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  Speaker 2: data coming out this week. What are you looking for?
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  Speaker 3: Yeah, look, I think I can I lookwise. Tomorrow we've
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  Speaker 3: got the ARII and Z house sales for July and
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  Speaker 3: that's important because we are we seeing a turning point.
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  Speaker 3: But I think US politics and economic data come back
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  Speaker 3: to the fray again. Heither. We're certainly investors have been
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  Speaker 3: watching this US Democratic National Conference it starts tomorrow. Is
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  Speaker 3: there any sort of policy announcements that come through that
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  Speaker 3: are different, challenging? And then later in the weekend this
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  Speaker 3: is are going to switch their focus to the US
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  Speaker 3: Federal Reserve Jackson Hole Symposium, and that is about whether
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  Speaker 3: our friend mister J. Powell, Chair of the USC Reserve,
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  Speaker 3: actually starts to talk about we're going to cut rates
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  Speaker 3: again here, assuming the inflation data is supporting that.
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  Speaker 2: Yeah, Shane, thank you very much, really appreciated that. Shane Solly,
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  Speaker 2: who's with Harbor Asset Management.
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