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The Muster- David Frame: Craigs IP · The Muster on Hokonui

• 0:03
  Speaker 1: David Frame of Craig's Investment Partners joins us this afternoon.
• 0:08
  Speaker 1: Good afternoon, David.
• 0:08
  Speaker 2: Good afternoon, Andy. GDT result last night, back on track,
• 0:28
  Speaker 2: great result.
• 0:28
  Speaker 1: Yeah, really good result. Yeah, we've got skim milk powder
• 0:32
  Speaker 1: up 3.4%, whole milk powder up 4.4%. It's looking good.
• 0:38
  Speaker 2: What's the rationale behind the rise last night? Just supply
• 0:41
  Speaker 2: and demand? Yeah, I'd say it's.
• 0:42
  Speaker 1: Supply and demand, proteins in demand, which is great. Great
• 0:45
  Speaker 1: for New Zealand.
• 0:46
  Speaker 2: Yeah, no, that's a good news story. The Kiwi dollar,
• 0:48
  Speaker 2: what's happening there? It's getting weaker.
• 0:51
  Speaker 1: Yeah, it's been down for a while, which... Which does
• 0:54
  Speaker 1: actually help the exporters, so it does help with those
• 0:57
  Speaker 1: milk dollars coming back into the country, helps with the
• 1:00
  Speaker 1: sale of lambs. Unfortunately, if we go overseas, and I
• 1:04
  Speaker 1: just went to Australia recently to visit my daughter, we
• 1:07
  Speaker 1: don't buy much when we go overseas, or if we
• 1:09
  Speaker 1: buy imported goods like fuel, it makes an impact. It
• 1:13
  Speaker 1: all costs more. At the moment, the market's reasonably nervous
• 1:17
  Speaker 1: about the election, so... Not saying that one party over
• 1:21
  Speaker 1: the other will be better for the country, but there's
• 1:23
  Speaker 1: some apprehension around what all these new policies might mean
• 1:27
  Speaker 1: for our economy and whether we're a good bet to
• 1:30
  Speaker 1: invest in.
• 1:31
  Speaker 2: So there's a good chance our dollar could keep going lower?
• 1:34
  Speaker 1: I think so. Even once the election rolls through and
• 1:37
  Speaker 1: there's a coalition formed, and let's face it, that could
• 1:41
  Speaker 1: take weeks or months in our government, then there'll still
• 1:44
  Speaker 1: be some uncertainty as to any change in policies and
• 1:47
  Speaker 1: how those actually affect our economy.
• 1:49
  Speaker 2: You look at the dollar, it's not that long ago
• 1:51
  Speaker 2: they talked about an ANZAC, like Australian New Zealand currency
• 1:55
  Speaker 2: being mooted. That seems like the giddy heights of only
• 1:58
  Speaker 2: 18 months ago.
• 2:00
  Speaker 1: Yeah, it wasn't that long ago at all. Yeah, and
• 2:02
  Speaker 1: in reality that would never happen because if Australia's exporting
• 2:07
  Speaker 1: minerals hand over fist and doing well, then our dollar
• 2:10
  Speaker 1: rises and it would make it tougher for our economy
• 2:13
  Speaker 1: to sell our lambs and milk.
• 2:15
  Speaker 2: Oh, we were close to 90, 95 cents at one
• 2:17
  Speaker 2: stage to an Aussie dollar. That was the giddy heights.
• 2:20
  Speaker 1: Yeah, it wasn't that long ago. And I paid 81
• 2:23
  Speaker 1: the other day when I went to Australia. It didn't
• 2:25
  Speaker 1: buy me a lot. Bit of duty free, that's about it.
• 2:28
  Speaker 1: Duty free doesn't really matter these days, though. No, no,
• 2:31
  Speaker 1: it's all alcohol and cosmetics. So the first one interests me,
• 2:37
  Speaker 1: the second not at all.
• 2:38
  Speaker 2: Chocolate's good there. You've got the good chocolate in there,
• 2:40
  Speaker 2: but that's a story for another day. You talked about
• 2:43
  Speaker 2: the election and the impact it's going to have on markets.
• 2:46
  Speaker 2: Just elaborate on that a bit more. What are we thinking?
• 2:48
  Speaker 2: What's going to happen, especially from a southern lens? So
• 2:52
  Speaker 2: there are two sides to it.
• 2:53
  Speaker 1: One is, will the economy be better off if we
• 2:56
  Speaker 1: change government or if we stick with the current government?
• 2:59
  Speaker 1: So there's a bit of apprehension whether all these promises
• 3:03
  Speaker 1: in the lolly jar will actually turn out to be
• 3:05
  Speaker 1: good for the economy. And then the second one is
• 3:09
  Speaker 1: that there are individual industries that could be impacted by
• 3:12
  Speaker 1: the election. So, for example, Labour has said that if
• 3:16
  Speaker 1: they get in the care workers in rest homes and
• 3:20
  Speaker 1: the like, they'll get an instant $ 4 an hour increase,
• 3:24
  Speaker 1: which is great for those workers.
• 3:26
  Speaker 2: For that sector.
• 3:27
  Speaker 1: What about the other ones? Yeah, well, for that sector,
• 3:30
  Speaker 1: it also means, will I end up paying more for
• 3:33
  Speaker 1: my rest home bed Because the operator still has to
• 3:36
  Speaker 1: be able to fund all of these things. Does the
• 3:39
  Speaker 1: government chip in? It becomes more expensive. Now, I think
• 3:42
  Speaker 1: the health care workers are underpaid and they're saints for
• 3:45
  Speaker 1: what they do. But there is a flow on implication.
• 3:48
  Speaker 1: And so if you look at the share price of
• 3:52
  Speaker 1: the aged care facility providers, they've all taken a tumble.
• 3:55
  Speaker 1: They're all well down.
• 3:57
  Speaker 2: Can we afford Winston's checkbook these days? Well.
• 4:01
  Speaker 1: To be fair, you could probably afford all of the checkbooks.
• 4:05
  Speaker 1: It's just how they get rolled out and how the
• 4:08
  Speaker 1: actual economy rolls with the changes. So no one's got any, oh,
• 4:13
  Speaker 1: I shouldn't say no one. Some have daft ideas. But
• 4:16
  Speaker 1: in general, the main parties have good ideas if everything
• 4:20
  Speaker 1: falls in line to meet their budgets.
• 4:24
  Speaker 2: But like, so when you get 65 superannuation, I think
• 4:27
  Speaker 2: that's the more or less referring to is, can we
• 4:29
  Speaker 2: afford that?
• 4:30
  Speaker 1: No, going forward we can't. Yeah, 10 years ago the
• 4:33
  Speaker 1: Retirement Commission said that they should push the retirement age
• 4:37
  Speaker 1: out to 67 for anyone born in 1972 or later,
• 4:41
  Speaker 1: and I was born in 72. 74, yeah, you're starting
• 4:45
  Speaker 1: to get envy. It's like when the drinking age went
• 4:48
  Speaker 1: up to 20 and my niece just missed out. And
• 4:51
  Speaker 1: so they still need to do something. That was never implemented,
• 4:55
  Speaker 1: but the country will have a shortfall at some stage
• 4:58
  Speaker 1: because we'll have So many retired people. So there are
• 5:02
  Speaker 1: some hard decisions to be made there. I think some
• 5:05
  Speaker 1: parties are for it, some are against it. Yeah, I
• 5:09
  Speaker 1: don't think anything's going to change quickly because it's quite
• 5:11
  Speaker 1: a hard sell for the government.
• 5:13
  Speaker 2: Well, it is. Means testing's got to come into the equation, surely.
• 5:17
  Speaker 1: Well, down the track it does. Compulsory KiwiSaver, later retirement
• 5:22
  Speaker 1: aged for your government superannuation, means testing. There are a
• 5:25
  Speaker 1: number of tools they can do. They just need to
• 5:27
  Speaker 1: give us a lot of warnings. Because I don't want
• 5:30
  Speaker 1: to get to 64 and then find that someone pushes
• 5:33
  Speaker 1: it out two or three years.
• 5:34
  Speaker 2: Yeah, because you've paid your dues all your life. You
• 5:36
  Speaker 2: feel like you're owed something.
• 5:37
  Speaker 1: Yeah, and otherwise my retirement budget just goes out the window.
• 5:40
  Speaker 1: So they need to give a lot of notice, whichever
• 5:42
  Speaker 1: way they do it.
• 5:44
  Speaker 2: Okay, we're over six months now from Donald Trump invading Iran.
• 5:48
  Speaker 2: We've still got the ongoing situation with Russia and Ukraine.
• 5:52
  Speaker 2: How's New Zealand sitting internationally at the moment? We're doing okay.
• 5:57
  Speaker 1: Our exports are great, and I'd like to thank the
• 6:00
  Speaker 1: Southland farmers for that because we are driving the economy.
• 6:03
  Speaker 2: Absolutely, yeah.
• 6:04
  Speaker 1: The flow on, though, is that fuel prices are still massive,
• 6:07
  Speaker 1: aren't they? So we're still paying for that. That'll trickle
• 6:10
  Speaker 1: through to your supermarket pricing. Inflation is creeping in. Interest
• 6:15
  Speaker 1: rates are going up, but probably not to a major level.
• 6:19
  Speaker 1: So we'll probably see one-year home loan rates sort of
• 6:22
  Speaker 1: in the low 5s, mid 5s. So these are expected
• 6:27
  Speaker 1: to ease off mid to late next year, but I'll
• 6:30
  Speaker 1: add that forecasts are always wrong. So if fuel prices
• 6:33
  Speaker 1: stay high, we could see a little bit more of
• 6:36
  Speaker 1: this and it could put more pressure on our economy.
• 6:38
  Speaker 2: So if you're doing interest rates at the moment, it's
• 6:41
  Speaker 2: a case of bad timing?
• 6:43
  Speaker 1: Well, you're hedging your bets.
• 6:45
  Speaker 2: Yeah, you are.
• 6:45
  Speaker 1: We could have this discussion in a year and say, oh,
• 6:48
  Speaker 1: it would have been best to fix a rate then. Yeah,
• 6:52
  Speaker 1: it's a lottery to be fair.
• 6:54
  Speaker 2: Absolutely right. Craig's Investment Partners, David, how do we get
• 6:56
  Speaker 2: in touch?
• 6:57
  Speaker 1: Just walk in the front door at 1 Erk Street.
• 6:59
  Speaker 1: We're opposite the New World in Gore.
• 7:01
  Speaker 2: Get your groceries and go and see you guys about
• 7:04
  Speaker 2: a bit of investment. Makes sense, eh?
• 7:05
  Speaker 1: Yeah, sounds great.
• 7:06
  Speaker 2: Good on you, mate. Enjoy the day.
• 7:07
  Speaker 1: Thank you.