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Shane Solly: Harbour Asset Management spokesperson on China's efforts to stimulate its economy · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks.
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  Speaker 2: There'd be follow this and our wide range of podcasts
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  Speaker 2: now on iHeartRadio with us.
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  Speaker 1: Now we've got Shane Solly of Harbor Asset Management. Hay Shane, Hey, Heather, listen.
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  Speaker 1: I'm very well, Thank you, Shane. I'm fascinated by what's
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  Speaker 1: going on in China. So they're going to open up
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  Speaker 1: the stimulus taps a little bit more.
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  Speaker 2: Yep. So again, we've seen a few policy announcements the
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  Speaker 2: last week or so. In the weekend we saw another
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  Speaker 2: big announcement from the Chinese Master of Finance. They're outlining
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  Speaker 2: planning space to issue more debt, to boost property markets,
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  Speaker 2: recopitalize banks, assist local governments, and so. On Saturday, I
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  Speaker 2: talked about the potential to issue special sovereign bonds to
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  Speaker 2: recapitalize the big state owned banks, and it would also
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  Speaker 2: allow local governments to use remember two point through tree
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  Speaker 2: and of local governments special bonds to buy unsold homes.
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  Speaker 2: Really important because the local governments have been pretty hamstrung.
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  Speaker 2: They've had massive debt, and so this really allows them
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  Speaker 2: to repay debt. You put some stimulus back in the economy.
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  Speaker 2: Pieces that's been missing in the Chinese economy.
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  Speaker 1: Now, capital markets initially seem to be kind of disappointed
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  Speaker 1: by this.
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  Speaker 2: Should they have been, well, look it's it was a
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  Speaker 2: bit light on detail and numbers, and this is what
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  Speaker 2: we've seen the last week or so in terms of
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  Speaker 2: these policy announcements. But certainly the Monster of Finance was
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  Speaker 2: be patient. We've got some more policy announcements coming. And
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  Speaker 2: you got asked a question about the scarlet things. He said, look,
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  Speaker 2: I won't say now, but it's going to be big,
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  Speaker 2: and that's pretty unusual. They don't normally say stuff like that.
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  Speaker 2: There's a bunch of policy events coming up to National
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  Speaker 2: People's Congress later in October, and it just feels like
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  Speaker 2: the Chinese regulators are putting more and more and more
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  Speaker 2: layers of support and it's certainly giving the economy a
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  Speaker 2: bit of a boost off the bottom. So there is
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  Speaker 2: some upside here. We had to see some more detail.
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  Speaker 1: Now, what does this mean do you think for the
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  Speaker 1: New Zealand economy.
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  Speaker 2: Look, we've got a bit of a way to go.
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  Speaker 2: We do need to see how this goes in terms
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  Speaker 2: of stimulating consumer confidence. That's what it's all about, right,
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  Speaker 2: trying to give people confidence and housing markets and that
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  Speaker 2: they can open up their own spending. And so if
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  Speaker 2: it happens that it would actually be broadly supportive for
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  Speaker 2: demand for New Zealand commodities, things like services like travel
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  Speaker 2: if it improves confidence, and also would be a bit
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  Speaker 2: of a boost to the Australian economy, which again is
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  Speaker 2: helpful for a lot of New Zealand businesses. There ever
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  Speaker 2: Australian activity, but we've got to let it roll through.
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  Speaker 2: We've seen a bit of a bounce, people are a
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  Speaker 2: bit more optimistic, but we need to see some more detail.
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  Speaker 1: Yeah, fair enough. Now we've just been talking to Nichola
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  Speaker 1: Willis about the easing and the foreign investment laws. What
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  Speaker 1: do you reckon that means for the capital markets?
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  Speaker 2: Well, look, I think the best way putting it is
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  Speaker 2: the current policy has restricted the breadth of boshore investment
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  Speaker 2: New Zealand, and I think it has certainly pushed New
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  Speaker 2: Zealand down the list of the destinations for investors to
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  Speaker 2: go globally. So look, anything that actually sees that maybe
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  Speaker 2: we go back up the list. But I just sort
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  Speaker 2: of obviously point to there's been some really good offshore
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  Speaker 2: interest in our markets of late, there's obviously big bond holdings,
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  Speaker 2: but more recently we've had some massive capital raises. Now
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  Speaker 2: the used example of Aukneport raised one point four billion dollars.
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  Speaker 2: We saw a big ejection from global invesins really attracted
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  Speaker 2: to attractive NEWSI on infrastructure. So I think there is
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  Speaker 2: plenty of appetite out there. They just need to know
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  Speaker 2: that they're actually there's a framework that doesn't penalize them.
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  Speaker 2: And I think also when I come back QUSA A
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  Speaker 2: cause are pretty powerful as well, so you know we
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  Speaker 2: have multiple service as the capital. Just freeing up that
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  Speaker 2: access to international invesinas will be helpful to improve the
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  Speaker 2: pricing we get for our assets.
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  Speaker 1: Yeah, brilliant stuff. Hey, Shane, thanks for talking us through that.
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  Speaker 1: Enjoy the received evening that Shane Solely of Harbor Asset Management.
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