1 00:00:05,160 --> 00:00:07,720 Speaker 1: This is what the Flux. I'm Brett and I'm Justin 2 00:00:07,800 --> 00:00:09,760 Speaker 1: and it's Wednesday, the thirteenth of August. 3 00:00:09,480 --> 00:00:12,200 Speaker 2: Suzy Boy. In the most recent quarter, Australian's watched much 4 00:00:12,240 --> 00:00:15,120 Speaker 2: more sport and Netflix's market share shrunk to just eight 5 00:00:15,120 --> 00:00:17,440 Speaker 2: and a half percent. That's according to Ostan, But take 6 00:00:17,480 --> 00:00:19,160 Speaker 2: it with the grain of salt because it only gathers 7 00:00:19,239 --> 00:00:21,919 Speaker 2: data from TV set, both the connected type and the 8 00:00:21,960 --> 00:00:24,720 Speaker 2: old school. That means it doesn't track content watch on computers, 9 00:00:24,760 --> 00:00:28,200 Speaker 2: tablets and mobiles. So this obviously skews towards old school TV. 10 00:00:28,520 --> 00:00:30,720 Speaker 2: And you can bet your bottom dollar that the traditional 11 00:00:30,840 --> 00:00:33,360 Speaker 2: TV networks will be using these stats. 12 00:00:33,400 --> 00:00:36,360 Speaker 1: Whatever suits their story better be man. I am pretty 13 00:00:36,400 --> 00:00:39,839 Speaker 1: excited today. The RBA made a big decision yesterday. We'll 14 00:00:39,880 --> 00:00:41,240 Speaker 1: be talking about it in the pod. But if you 15 00:00:41,240 --> 00:00:44,879 Speaker 1: want to learn more about inflation measures CPI, there's trimmed 16 00:00:44,880 --> 00:00:47,200 Speaker 1: Bean and sound like the smartest person in the room. 17 00:00:47,360 --> 00:00:49,400 Speaker 1: We have it all covered in the Flux apps. Make 18 00:00:49,440 --> 00:00:50,520 Speaker 1: sure to check it out. 19 00:00:50,720 --> 00:00:54,040 Speaker 2: Three entertaining stories today, Juzzy Boy, let's do it for 20 00:00:54,080 --> 00:00:56,880 Speaker 2: our first. The RBA has cut the cash rate yzero 21 00:00:56,880 --> 00:00:59,480 Speaker 2: point two five percent to its lowest level in more 22 00:00:59,520 --> 00:01:00,200 Speaker 2: than two. 23 00:01:00,560 --> 00:01:03,160 Speaker 1: Next minute, share market smashes through its record. So tell 24 00:01:03,200 --> 00:01:04,560 Speaker 1: me we'll be man, so juse boyd. 25 00:01:04,600 --> 00:01:08,880 Speaker 2: The RBA is essentially the admin of Australia's economy group Chat. 26 00:01:08,760 --> 00:01:10,600 Speaker 1: Yeah, the board member said, eight times a year to 27 00:01:10,720 --> 00:01:13,800 Speaker 1: check in on Australia's economy, it's unemployment rate as well 28 00:01:13,800 --> 00:01:15,039 Speaker 1: as its inflation. 29 00:01:14,680 --> 00:01:16,520 Speaker 2: And of course make a call on the cash rate. 30 00:01:16,600 --> 00:01:19,480 Speaker 1: And last month, when the financial markets predicted a ninety 31 00:01:19,520 --> 00:01:21,240 Speaker 1: five per cent chance of a cash rate cut, the 32 00:01:21,319 --> 00:01:22,760 Speaker 1: RBA surprise us all. 33 00:01:22,640 --> 00:01:25,040 Speaker 2: With a pause. This month, they've cut the cash rate 34 00:01:25,080 --> 00:01:27,479 Speaker 2: by point to five percent, which means the cash rate 35 00:01:27,600 --> 00:01:30,240 Speaker 2: is now sitting at three point six percent and it's 36 00:01:30,280 --> 00:01:33,920 Speaker 2: got the share market very excited, especially because the RBA Governor, 37 00:01:33,959 --> 00:01:36,880 Speaker 2: Michelle Bullock hinted of more cash rate cuts to come 38 00:01:36,920 --> 00:01:39,400 Speaker 2: this year. But the man, before we all start partying, 39 00:01:39,440 --> 00:01:41,479 Speaker 2: there's also a bit of a mood Kuller in her 40 00:01:41,560 --> 00:01:43,039 Speaker 2: post cash rate cut commentary. 41 00:01:43,080 --> 00:01:44,640 Speaker 1: What was that productivity? Yeah? 42 00:01:44,680 --> 00:01:45,280 Speaker 2: What about it? 43 00:01:45,319 --> 00:01:48,080 Speaker 1: Well, the RBA now reckons that productivity in Australia will 44 00:01:48,080 --> 00:01:50,320 Speaker 1: grow at just zero point seven percent a year, which 45 00:01:50,360 --> 00:01:53,120 Speaker 1: is down from its previous assumption of one percent annual 46 00:01:53,120 --> 00:01:55,720 Speaker 1: growth of productivity. So what is the key learning here? 47 00:01:55,760 --> 00:01:59,400 Speaker 2: Productivity growth measures how efficiently an economy can produce goods 48 00:01:59,440 --> 00:02:01,040 Speaker 2: and services over time and. 49 00:02:00,920 --> 00:02:03,760 Speaker 1: B Man productivity is essential for an economy because it's 50 00:02:03,760 --> 00:02:06,760 Speaker 1: the main driver of rising living standards. That's because it 51 00:02:06,800 --> 00:02:10,160 Speaker 1: allows wages and incomes to grow without adding inflation. Higher 52 00:02:10,160 --> 00:02:13,480 Speaker 1: productivity means each worker can produce more in the same 53 00:02:13,480 --> 00:02:16,280 Speaker 1: amount of time because of better skills or improved technology 54 00:02:16,280 --> 00:02:17,760 Speaker 1: to work with. On the other hand, when you have 55 00:02:17,800 --> 00:02:21,519 Speaker 1: a weak productivity, it means the economy's potential output is lower. 56 00:02:21,600 --> 00:02:23,799 Speaker 1: And while the RBA is downgrade from one percent two 57 00:02:23,800 --> 00:02:27,120 Speaker 1: point seven percent growth might sound small, this compounds over 58 00:02:27,160 --> 00:02:29,560 Speaker 1: time and it can make a very big difference. 59 00:02:29,560 --> 00:02:32,799 Speaker 2: So unless Australia can fix its productivity problem, it may 60 00:02:32,919 --> 00:02:35,640 Speaker 2: mean a few things. Light its lower wage growth, fewer 61 00:02:35,760 --> 00:02:37,880 Speaker 2: job opportunity, and an economy. 62 00:02:37,480 --> 00:02:38,760 Speaker 1: That feels like it's crawling. 63 00:02:38,960 --> 00:02:42,440 Speaker 2: For our second story, NBNC has cut its losses to 64 00:02:42,520 --> 00:02:45,240 Speaker 2: under one billion dollars in the last financial year as 65 00:02:45,240 --> 00:02:47,880 Speaker 2: it spends big on upgrades to keep up with competition. 66 00:02:48,040 --> 00:02:50,480 Speaker 1: Love that the nbn CODs turned a one billion dollar 67 00:02:50,520 --> 00:02:51,399 Speaker 1: loss into a win. 68 00:02:51,639 --> 00:02:55,400 Speaker 2: Tell me more so. The NBN aka the National Broadband Network, 69 00:02:55,480 --> 00:02:57,600 Speaker 2: kicked off in two thousand and nine with a big 70 00:02:57,680 --> 00:02:59,880 Speaker 2: promise of lightning fast internet for all. 71 00:03:00,160 --> 00:03:03,200 Speaker 1: Sixteen years later, Australia is sitting at a global speed 72 00:03:03,280 --> 00:03:05,680 Speaker 1: ranking for fixed broadband of seventy five. 73 00:03:05,880 --> 00:03:11,040 Speaker 2: Yes, we are behind renowned internet powerhouses like Trinidad and Tobago, Guyana, 74 00:03:11,160 --> 00:03:12,639 Speaker 2: Nicoagua and of course. 75 00:03:12,440 --> 00:03:15,520 Speaker 1: Granada now Biman NBNCo has announced that it has cut 76 00:03:15,560 --> 00:03:18,200 Speaker 1: its annual loss by ten percent in the last financial 77 00:03:18,240 --> 00:03:21,000 Speaker 1: year to just nine hundred and sixty three million dollars 78 00:03:21,000 --> 00:03:23,280 Speaker 1: the jazz boy before you give NBN a standing ovation. 79 00:03:23,520 --> 00:03:27,000 Speaker 1: They also received one point one nine billion dollars from 80 00:03:27,000 --> 00:03:29,440 Speaker 1: the federal government, which is fifty four percent more than 81 00:03:29,639 --> 00:03:32,480 Speaker 1: twenty twenty four and NBN is spending big on new 82 00:03:32,720 --> 00:03:36,200 Speaker 1: low Earth orbit satellite broadband via Amazon that Begman. The 83 00:03:36,280 --> 00:03:39,680 Speaker 1: reason is because NBN is facing serious competition from other 84 00:03:39,760 --> 00:03:42,520 Speaker 1: fixed broadband providers with faster connection. 85 00:03:42,280 --> 00:03:44,520 Speaker 2: SINC five G and satellite broadband. 86 00:03:44,840 --> 00:03:46,200 Speaker 1: So what is the key learning here? 87 00:03:46,240 --> 00:03:48,840 Speaker 2: When it comes to business, there are generally five forces 88 00:03:48,880 --> 00:03:52,000 Speaker 2: of competition that can influence a business's profit potential. 89 00:03:52,080 --> 00:03:54,000 Speaker 1: There's the threat of new entrants. 90 00:03:53,800 --> 00:03:57,280 Speaker 2: There's the bargaining power of suppliers, there's the bargaining power 91 00:03:57,280 --> 00:04:01,080 Speaker 2: of buyers, there's the intensity of rival, and there's the 92 00:04:01,200 --> 00:04:03,400 Speaker 2: threat of substitution. And does it boid. The threat of 93 00:04:03,440 --> 00:04:06,080 Speaker 2: substitution is biting at nbn co's heels. 94 00:04:06,160 --> 00:04:08,840 Speaker 1: That's because customers can now switch to a different service 95 00:04:08,880 --> 00:04:10,400 Speaker 1: that meets the exact same need. 96 00:04:10,320 --> 00:04:12,280 Speaker 2: And it's often at a lower cost or with a 97 00:04:12,280 --> 00:04:14,680 Speaker 2: better value proposition. In fact, be Man the hriable ce 98 00:04:14,880 --> 00:04:18,320 Speaker 2: reckons that five hundred thousand Australians now used fixed wireless 99 00:04:18,320 --> 00:04:21,200 Speaker 2: access like four G or five G as their primary 100 00:04:21,400 --> 00:04:24,120 Speaker 2: home broadband connection, and that's nearly double the number from 101 00:04:24,120 --> 00:04:24,760 Speaker 2: two years ago. 102 00:04:24,920 --> 00:04:27,920 Speaker 1: So the growing appeal of these substitutes puts more pressure 103 00:04:27,960 --> 00:04:30,520 Speaker 1: on nbn to actually improve their service. 104 00:04:30,680 --> 00:04:33,839 Speaker 2: So NBNC is trying to defend against this substitution threat 105 00:04:33,960 --> 00:04:37,359 Speaker 2: before it erodes its market share. For our third and 106 00:04:37,520 --> 00:04:41,640 Speaker 2: final story, Jbhihi celebrated a ten percent jump in sales 107 00:04:41,680 --> 00:04:44,760 Speaker 2: and its CEO is resigned with a big payout for investors. 108 00:04:44,880 --> 00:04:47,760 Speaker 2: JB's investors going through a roller coaster of promotions right here, 109 00:04:47,839 --> 00:04:48,360 Speaker 2: tell me more. 110 00:04:48,400 --> 00:04:52,040 Speaker 1: Okay, So Jbhighie is the Australian electronics retail company started 111 00:04:52,080 --> 00:04:53,360 Speaker 1: in nineteen seventy. 112 00:04:53,040 --> 00:04:58,200 Speaker 2: Four, sales everything from laptops, cameras, gaming consoles, TVs, home appliances, and. 113 00:04:58,240 --> 00:05:01,840 Speaker 1: Formerly had a ginormous section for music albums and singles as. 114 00:05:01,760 --> 00:05:04,200 Speaker 2: Well good old singles for seven ninety nine each. 115 00:05:04,320 --> 00:05:07,120 Speaker 1: And then in the last financial year, JB announced some 116 00:05:07,320 --> 00:05:08,240 Speaker 1: very big results. 117 00:05:08,480 --> 00:05:10,440 Speaker 2: Their group sales were up by ten percent and their 118 00:05:10,480 --> 00:05:12,919 Speaker 2: overall net profit increased by five point four percent. 119 00:05:12,960 --> 00:05:15,800 Speaker 1: And as part of this earnings update, their CEO, Terry Smart, 120 00:05:15,800 --> 00:05:18,800 Speaker 1: announced he'd be hanging up his CEO lanyard and retiring, 121 00:05:19,120 --> 00:05:21,160 Speaker 1: and as a parting gift to shareholders, he announced a 122 00:05:21,200 --> 00:05:24,799 Speaker 1: special dividend. But despite these positive results and the special dividend, 123 00:05:24,960 --> 00:05:26,920 Speaker 1: JB shares fill nearly eight percent. 124 00:05:26,960 --> 00:05:29,119 Speaker 2: Sounds a little strange to some. What is the reason? 125 00:05:29,200 --> 00:05:32,279 Speaker 1: Well, largely because investors were morning the news of the 126 00:05:32,360 --> 00:05:35,960 Speaker 1: CEO resignation and the unknown of what's to come next interesting. 127 00:05:36,040 --> 00:05:37,600 Speaker 2: So what is the key learning here? 128 00:05:37,720 --> 00:05:41,680 Speaker 1: Strong numbers don't always mean a strong market reaction, especially 129 00:05:41,760 --> 00:05:43,320 Speaker 1: when leadership changes happen. 130 00:05:43,240 --> 00:05:46,400 Speaker 2: Yep, and a CEO exit can sometimes worry investors more 131 00:05:46,440 --> 00:05:48,159 Speaker 2: than strong profits can reassure them. 132 00:05:48,400 --> 00:05:50,920 Speaker 1: Even in JB high Eye's case, sales jump, profit lift 133 00:05:50,960 --> 00:05:53,919 Speaker 1: and a special dividend weren't enough to stop shares sliding. 134 00:05:53,960 --> 00:05:57,039 Speaker 2: That's because Jbhigh Fi CEO has steadied the ship even 135 00:05:57,080 --> 00:05:58,440 Speaker 2: in a tough retail environment. 136 00:05:58,480 --> 00:06:00,880 Speaker 1: In fact, since he rejoined JB hig By CEO in 137 00:06:00,920 --> 00:06:02,960 Speaker 1: twenty twenty one, it shares an increase by more than 138 00:06:02,960 --> 00:06:05,440 Speaker 1: one hundred and fifty percent, and a new CEO, even 139 00:06:05,480 --> 00:06:08,359 Speaker 1: if it is the current COO, brings some unknowns and 140 00:06:08,480 --> 00:06:11,920 Speaker 1: markets hey unknowns and interestingly juzy Wait. When Terry Smart 141 00:06:11,920 --> 00:06:14,599 Speaker 1: was first announced CEO in twenty ten, JB share price 142 00:06:14,640 --> 00:06:17,000 Speaker 1: also took a hit because investors feared the unknown of 143 00:06:17,040 --> 00:06:19,400 Speaker 1: a new leader. We've seen this before when Aria Group 144 00:06:19,520 --> 00:06:20,960 Speaker 1: CEO stepped down in February. 145 00:06:21,040 --> 00:06:23,760 Speaker 2: He beat Aria's half year profit forecast, but its shares 146 00:06:23,760 --> 00:06:25,120 Speaker 2: still dipped four percent. 147 00:06:24,839 --> 00:06:28,719 Speaker 1: So b man leadership changes can quickly overshadow strong performance 148 00:06:28,800 --> 00:06:31,000 Speaker 1: in the eyes of investors. Yep, fox am, do you 149 00:06:31,040 --> 00:06:34,200 Speaker 1: know the difference between headline inflation and trimmed mean inflation? 150 00:06:34,400 --> 00:06:36,880 Speaker 1: The RBA's favorite word. Right now, let's be beyond. It'll 151 00:06:36,920 --> 00:06:39,359 Speaker 1: make a whole lot more sense. In the Flux app today, 152 00:06:39,440 --> 00:06:41,640 Speaker 1: we break down why the RBA looks at trimmed mean 153 00:06:41,680 --> 00:06:44,440 Speaker 1: inflation and how it impacts their cash right decisions. Make 154 00:06:44,480 --> 00:06:46,360 Speaker 1: shure to download the Flux app and check it out. 155 00:06:46,400 --> 00:06:48,960 Speaker 2: Thanks for listening and we'll see you on Friday.