Latest / Best of Business / Katlyn Parker: Milford Asset Management analyst on the market response to the OCR cut

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Katlyn Parker: Milford Asset Management analyst on the market response to the OCR cut · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. It'd be
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  Speaker 2: Kaitlin Parker Milfedesset Management is with us a Kitlin him
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  Speaker 2: I'm very well thank you. Have the markets react to
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  Speaker 2: the OCI.
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  Speaker 3: Cut, Yeah, Look, interest rates across the current we saw
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  Speaker 3: them move lower about point one percent or so on
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  Speaker 3: the back of THEOCAR quit today. But interest rates have
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  Speaker 3: already moved significantly lower in the lead up to this meeting.
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  Speaker 3: So you know, take the two year interest right to
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  Speaker 3: swap right, that's a real bell weather from mortgage rights.
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  Speaker 3: That was down close to two percent over the past
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  Speaker 3: six weeks leading into the meeting today. So we had
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  Speaker 3: already seen you know, decent moves lower in interest rates.
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  Speaker 3: And then we think about currency. If we think about
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  Speaker 3: the New Zealand dollar now versus the Ausie dollar, you
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  Speaker 3: would expect that it's going to be pretty strong, given
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  Speaker 3: we now have diverging monetary policies. So New Zealand has
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  Speaker 3: embarked on this cutting cycle versus our neighbors and Aussie
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  Speaker 3: are now remaining firmly on hold as it is. But
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  Speaker 3: I would have expected these market reactions that they will
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  Speaker 3: likely extend over the next twelve twenty four hours as
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  Speaker 3: off markets get involved in digest the cut today.
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  Speaker 2: All right now, on the sheer market, we've got a
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  Speaker 2: lot of interest right sensitive companies and so I imagine
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  Speaker 2: this would be a welcome relief to them.
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  Speaker 3: Yeah, yeah, definitely. So you know, in particular, property company,
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  Speaker 3: returned villages, retailers, their shairprise, their movement in their serprise,
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  Speaker 3: they're all seeing the benefit of that cut. Today we
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  Speaker 3: really saw in particular names that were quite beaten up
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  Speaker 3: going for the duration of this year and pretty unloved,
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  Speaker 3: we saw them come back into favor. So names like
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  Speaker 3: Keywet Property Group end of the day up about five
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  Speaker 3: and a half percent, Catman Do up about seven percent,
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  Speaker 3: and that was going in comparison to the overall New
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  Speaker 3: Zealand share market, which end of the day up about
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  Speaker 3: a percent and a half. So good performance from those
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  Speaker 3: right sensitive companies and taking back a bit of the
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  Speaker 3: underperformance that we'd already seen today.
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  Speaker 2: So the fact that we're cutting rights already and that
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  Speaker 2: they're the forecast is that these right cats will keep
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  Speaker 2: on coming. Do you think this is going to cushion
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  Speaker 2: the blow to the economy.
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  Speaker 3: Yeah, look, it's something that only time would tell. And
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  Speaker 3: Governor Orders said today that we're likely in the darkest
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  Speaker 3: period right now. So you know, granted we have had
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  Speaker 3: technical recessions, but ultimately for the most part and in
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  Speaker 3: terms of the hard data that we get, we have
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  Speaker 3: avoided that hard banding with everything coming crossing down at once.
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  Speaker 3: But our data is lagging in terms of you know, GDP,
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  Speaker 3: unemployment and inflation and risks really are pointing towards worsening
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  Speaker 3: the economies and pressures are really mounting. You know, we
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  Speaker 3: know unemployment is climbing, growth is negative and it's likely
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  Speaker 3: to remain. So the housing markets muted, and we've migration
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  Speaker 3: falling with the mass exodus of Kiwis to Uzzi. So
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  Speaker 3: you know, even if we look externally, the US is
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  Speaker 3: flowing and China is pretty as we looked down to
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  Speaker 3: start stimulating its economy. So there is a real chance
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  Speaker 3: that the urbians that you know, we were the first
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  Speaker 3: to hike, they could be too late starting to cut
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  Speaker 3: today and we could already have a lot of damage
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  Speaker 3: done to the economy. But you know, unfortunately, only time
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  Speaker 3: is going to tell.
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  Speaker 2: Yeah, Hi, Kaitlyn, Thanks for running us through that, man,
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  Speaker 2: I really appreciate it. As Kaitlyn Pan Milford Asset Management.
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