Latest / Best of Business / Shane Solly: Harbour Asset Management spokesperson on Air New Zealand's projected first-half earnings

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Shane Solly: Harbour Asset Management spokesperson on Air New Zealand's projected first-half earnings · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. They'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: And Solly Harbor Asset Management with us.
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  Speaker 1: Now.
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  Speaker 3: Hey Shane, Hello head Shane.
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  Speaker 2: You've been at the New Zealand AGM today. How's it
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  Speaker 2: looking like?
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  Speaker 4: It's been a really tough environment for a New Zion
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  Speaker 4: Despite this tough newsion economy and what's really massive supply
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  Speaker 4: channel shoes, they've actually provide a slightly positive update to day,
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  Speaker 4: driven by better cost control, revenue better than expected, talking
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  Speaker 4: about a little grin shoots and to the small medium
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  Speaker 4: sized enterprises corporate travel Domestic still got sixteen percent of
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  Speaker 4: their fleet grounded by lack a part supply chain. They're
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  Speaker 4: saying could get through the worst of that by early
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  Speaker 4: twenty twenty six, and they're even talking about growing a
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  Speaker 4: network again to three to four percent. But it's all
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  Speaker 4: been driven by things they're doing internal leaders, some transformation programs,
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  Speaker 4: talking about three to four hundred men, the savings, a
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  Speaker 4: couple of interesting nuggets in there, some new products, some
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  Speaker 4: new services will be apparently released pretty soon, but certainly
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  Speaker 4: investing for the growth up to eight hundred million of
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  Speaker 4: capital investment and per annum, so massive investment. They're talking
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  Speaker 4: about continuing with their Clean Skies initiative by twenty thirty
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  Speaker 4: bearing ten percent of sustainable own viewers. But yeah, I
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  Speaker 4: think a lot of these enhancements they've been working hard
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  Speaker 4: on last year or two post COVID started to come through.
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  Speaker 3: It's still very tough.
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  Speaker 2: So we are, i think, part way through the company
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  Speaker 2: reporting season for the September period. What's the tone that
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  Speaker 2: you're getting from the ins and exlisted companies right now?
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  Speaker 4: Yeah, Look, we are in to think of it hither
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  Speaker 4: you're right at the margin results so looking slightly better
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  Speaker 4: than expected, and it just suggests that the earnings for
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  Speaker 4: zeale companies may be basing again. Like in New Zealand,
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  Speaker 4: has been some tough runs, but we are seeing some
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  Speaker 4: real spread of outcomes. Global logistics something the main freight
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  Speaker 4: better result starting to say there's in some green shoots
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  Speaker 4: a bit of improvement. Reads that companies like Goodman and
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  Speaker 4: Argasy saying hey, we're seeing things getting a little bit better,
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  Speaker 4: but we're not getting to ediburse else. And we've got
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  Speaker 4: companies that may people to bounce back from a really
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  Speaker 4: tough a hawk space flad and then we've got companies
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  Speaker 4: okay to total one out of the box, big upgrade.
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  Speaker 4: So yeah, I think management teams still being cautious, but
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  Speaker 4: they're becoming increasingly cautiously optimistic and bit of a contrast there,
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  Speaker 4: and we think that might just provide a bit of
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  Speaker 4: upside for the zeal And company earnings.
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  Speaker 2: Hey are we still are we still expecting a fifty
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  Speaker 2: basis point cut this week?
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  Speaker 1: Yeah?
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  Speaker 4: I think that's right. The market is saying fifty basis points.
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  Speaker 4: The data continues to point to inflation falling. We are
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  Speaker 4: seeing businesses a little bit more confident. There's another reading
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  Speaker 4: later this week on Thursday, actually after the Reserve Banking
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  Speaker 4: design is due to report.
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  Speaker 3: But you know again employment.
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  Speaker 4: Level is it, so then we've going to watch for
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  Speaker 4: that there is actually unemployments starting to creep up. Reserve
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  Speaker 4: Bank may want to get ahead of that. This is
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  Speaker 4: of course, their last meeting before mid February when they
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  Speaker 4: come back after the summer break. So they have maintained
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  Speaker 4: this path of less regrets, which means they don't want
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  Speaker 4: to be the reserve bank that lets the inflation gene
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  Speaker 4: out of the bottle by not by easing interest rates
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  Speaker 4: to really, so I probably want to keep it a
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  Speaker 4: little but not get too carried away. So a three
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  Speaker 4: quarter point seven five percent cut that would be a surprise.
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  Speaker 4: So fifty years the odds on money at this stage.
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  Speaker 2: Yeah, hey, over in the US, shame, we've obviously had
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  Speaker 2: the Trump trades push everything up and has come back
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  Speaker 2: a wee bit. Now what are you looking when you
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  Speaker 2: look at that? What do you think that means for
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  Speaker 2: returns for the US share market and then for US
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  Speaker 2: as well.
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  Speaker 3: Yeah, look, you've seen some extremes there. There's definitely some
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  Speaker 3: of the leveraged exchange trade of phones, the cryptophones, all
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  Speaker 3: the sort of speculative elements have really gone hot. But
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  Speaker 3: there's four things that we're looking at that are sort
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  Speaker 3: of seeing people would just be a bit more cautious
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  Speaker 3: of recent days. Firstly, we've seen the central bank, the
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  Speaker 3: reserve Central bank result sorry, US Federal Reserve, some of
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  Speaker 3: the commentators just stepping back from cut expectations, saying, hey,
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  Speaker 3: the complation is not going away as quick quickly as
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  Speaker 3: we thought. We're going to want to just be a
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  Speaker 3: bit slower people are watching. Secondly, the Ukraine war getting broader. Thirdly,
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  Speaker 3: certainly some of the policy certainty around some of the
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  Speaker 3: appointments that mister Trump's proposing is just challenging a few
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  Speaker 3: parts of the economy. And finally, I think, you know,
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  Speaker 3: we've seen some results, truly results, but not enough, not
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  Speaker 3: enough for expectations. So normally we see the US market
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  Speaker 3: rally into the end of the year, into December, we've
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  Speaker 3: already seen four and a half five percent rally. It's
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  Speaker 3: a long way for us here in New Zealand.
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  Speaker 4: We've got to be careful about molatility around these political appointments,
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  Speaker 4: particularly what that means for US bond markets and share markets.
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  Speaker 4: And certainly there's more expansion in US fiscal spending ali
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  Speaker 4: the government spending more money that has potential to keep
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  Speaker 4: the reserve bank interest rates higher in the US viedual
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  Speaker 4: reserve higher, and so that could mean that US dollars
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  Speaker 4: stays stronger, makes it tougher for holidays.
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  Speaker 2: He totally us Shane, Thanks very much appreciated, Shane Solly
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  Speaker 2: Harbor Asset Management.
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