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Shane Solly: Harbour Asset Management expert on the market reactions to Westpac's profit · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. There'd be
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  Speaker 2: Shane Solly Harbor Asset Managements with Us. Hello, Shane, are
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  Speaker 2: you okay? How much can we read into those improved
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  Speaker 2: building permit stats that came out today?
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  Speaker 3: Yeah, so we saw a bit of a continued bounce
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  Speaker 3: off I low based residential building consenters up seven point
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  Speaker 3: two percent over the last month. It's better than expected, Heather,
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  Speaker 3: And really we're getting two months in a row. The
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  Speaker 3: data for last month was actually revised up from five
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  Speaker 3: point eight to six point one, so in you know, stronger.
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  Speaker 2: You know.
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  Speaker 3: The only sort of caved here is that data can
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  Speaker 3: be quite volatile. So while it's too strong a months,
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  Speaker 3: it's really sort of a tentative evidence that this residential
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  Speaker 3: investment market's turning higher. So good, but we've got a
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  Speaker 3: bit more to go.
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  Speaker 1: Now.
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  Speaker 2: What did the market make of wes PAX profit.
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  Speaker 3: Well, there was actually a good result. It was better
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  Speaker 3: than expected, but the main reason for it was they
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  Speaker 3: had lower babt bad debt charges, so particularly strong Australian
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  Speaker 3: economy means that baddened up for debt impayments. This is
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  Speaker 3: when banks provision for people not paying back their debt,
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  Speaker 3: and they were lower than expecting. Fact, impayments are really low.
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  Speaker 3: They've gone from six basis points to four basis points.
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  Speaker 3: It doesn't sound like a lot, but it's huge in
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  Speaker 3: banking terms. One of the interesting standouts here there was
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  Speaker 3: the Westpak New Zealand profit result but of a ripper
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  Speaker 3: driven by net interest margin expansion. We actually saw the
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  Speaker 3: west pacture price up three percent to its highest ever
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  Speaker 3: price in Australia, to thirty nine dollars nineteen Australian dollars,
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  Speaker 3: So big day for West Back.
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  Speaker 2: Now we've got the new Chinese economic data out as
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  Speaker 2: well today. Are there any implications there for New Zealand.
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  Speaker 3: Yeah, it was, it was a bit makes a bit
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  Speaker 3: more slippage from It's still positive, but it's nothing that's
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  Speaker 3: going to I don't think it's going to really cause
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  Speaker 3: major recis for New Zealan economy. But we continue to
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  Speaker 3: see the ratings Dog data, that's what it's called. Seeing
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  Speaker 3: the Chinese factory activity expanding less than expected. So the
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  Speaker 3: purchasing manager and this is forward looking index. It says
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  Speaker 3: what people think they're going to do slip from fifty
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  Speaker 3: one point two in September to fifty point six, so
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  Speaker 3: still positive. It's above fifty years expansion exports, that's the
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  Speaker 3: issue either that people wear about this trade uncertainty, so
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  Speaker 3: that doal back their export expectations, but they are adding jobs,
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  Speaker 3: so that's a bit of a conundrum and that one
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  Speaker 3: side squeaker on the other sides up. So jobs has
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  Speaker 3: been a slow point for the Chinese economy. Fastest growth
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  Speaker 3: in two years in the latest data, so that's a
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  Speaker 3: bit of a change.
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  Speaker 2: What are we expecting from the unemployment data this out
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  Speaker 2: on Wednesday?
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  Speaker 3: Yeah, really big one. From the New Zealand market, the
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  Speaker 3: market is expecting potential for ongoing weakness. We have seen
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  Speaker 3: firms not adding to the growth of late. There's a
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  Speaker 3: chance the New Zealand employment rate could tick up to
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  Speaker 3: a nine year high sort of above five. Five point
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  Speaker 3: three is what the pundits are picking, which is a
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  Speaker 3: very interesting number in terms of it's more than five
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  Speaker 3: less than five and a half, so five point three
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  Speaker 3: and if we get to that then that really is
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  Speaker 3: this a bit more support for another cut by the
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  Speaker 3: Rezoo Banking is on another twenty five basis points to
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  Speaker 3: two point two, but the market's always introducing that could
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  Speaker 3: be it for the cycle, So one last cup on
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  Speaker 3: the back of weaker employment data.
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  Speaker 2: Brilliant. Hey, thank you very much for talking us through
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  Speaker 2: that show. That's Shane Solly, Harbor Asset Management.
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