1 00:00:00,080 --> 00:00:02,720 Speaker 1: Now Jeremy Hutton Milford Asset Management is with us. 2 00:00:02,759 --> 00:00:05,200 Speaker 2: Hi, Jeremy, Good evening, Heather. 3 00:00:05,280 --> 00:00:07,680 Speaker 3: Now, INSIDEX has had a bit of a tough month, obviously, 4 00:00:07,760 --> 00:00:09,840 Speaker 3: so have other markets around the globe. 5 00:00:10,200 --> 00:00:11,360 Speaker 1: How has it been holding up? 6 00:00:12,800 --> 00:00:16,239 Speaker 2: Yeah, it has been extremely choppy and volatile month and 7 00:00:16,280 --> 00:00:20,320 Speaker 2: financial markets and everyone's sort of trying to guess the 8 00:00:19,760 --> 00:00:23,000 Speaker 2: next news flow coming out around the world. But yeah, 9 00:00:23,160 --> 00:00:25,880 Speaker 2: inzid X it's down six percent so far in March. 10 00:00:26,520 --> 00:00:28,000 Speaker 2: That I would add today it had a really good 11 00:00:28,040 --> 00:00:32,760 Speaker 2: bounce back on some of that leaked ceasefire report, so 12 00:00:32,800 --> 00:00:34,120 Speaker 2: it has been actually done a lot more than that 13 00:00:34,200 --> 00:00:36,960 Speaker 2: six percent. But you have been slightly more insulated than 14 00:00:37,000 --> 00:00:39,319 Speaker 2: our peer markets, and in the Australian market down over 15 00:00:39,400 --> 00:00:43,480 Speaker 2: seven percent, European and Asian markets down between eight and ten, 16 00:00:43,600 --> 00:00:46,800 Speaker 2: so they've been hit relatively harder. And the US markets, 17 00:00:46,840 --> 00:00:48,960 Speaker 2: of course have been a little bit more insulated, down 18 00:00:49,320 --> 00:00:52,839 Speaker 2: only three or four percent. It does make sense, you know, 19 00:00:52,920 --> 00:00:55,240 Speaker 2: the US, they've got the energy independence, so they are 20 00:00:55,320 --> 00:00:58,920 Speaker 2: a little bit more insulated. And I suppose we don't 21 00:00:58,960 --> 00:01:02,080 Speaker 2: have any really direct massag direct exposure to the Middle East, 22 00:01:02,080 --> 00:01:04,360 Speaker 2: but you know, there are a few second order effects 23 00:01:04,440 --> 00:01:06,880 Speaker 2: under come through that are worth touching on for New Zealand. 24 00:01:07,040 --> 00:01:09,679 Speaker 3: Yeah, those second order effects, they I mean, they have 25 00:01:09,720 --> 00:01:14,000 Speaker 3: the potential to halt our fragile economic recovery, don't they. 26 00:01:14,520 --> 00:01:16,360 Speaker 2: Yeah, that's right, and it hasn't come at a great 27 00:01:16,400 --> 00:01:19,759 Speaker 2: time for our economic recovery. I mean, we've obviously been 28 00:01:19,760 --> 00:01:23,360 Speaker 2: trying to get off the canvas after a tough few years, 29 00:01:23,400 --> 00:01:25,200 Speaker 2: and you know there has been a bit of a 30 00:01:25,240 --> 00:01:28,200 Speaker 2: downturn and sentiment. I mean obviously driven by this oil 31 00:01:28,240 --> 00:01:31,560 Speaker 2: price spike. It is another tax or another cost and 32 00:01:31,640 --> 00:01:36,480 Speaker 2: post on New Zealand consumers and businesses. And obviously the 33 00:01:36,520 --> 00:01:40,360 Speaker 2: next effect is that short term inflation and are we 34 00:01:40,400 --> 00:01:42,920 Speaker 2: going to get increased prices? Will it lower growth and 35 00:01:43,319 --> 00:01:46,360 Speaker 2: could it lower earnings for companies? So potentially a bit 36 00:01:46,360 --> 00:01:49,800 Speaker 2: of a nasty stakeflation or environment that markets or financial 37 00:01:49,800 --> 00:01:51,920 Speaker 2: markets really don't like and in fact no one really 38 00:01:51,960 --> 00:01:52,480 Speaker 2: likes it all. 39 00:01:53,440 --> 00:01:55,720 Speaker 1: How are you seeing the situation through the different sectors 40 00:01:55,760 --> 00:01:56,840 Speaker 1: on the ins oft ex thiss month. 41 00:01:58,760 --> 00:02:02,160 Speaker 2: Yeah, firstly, you know the artistic sectors being tourism and 42 00:02:02,200 --> 00:02:05,760 Speaker 2: travel adjacent businesses, So companies like in New Zealand, tourism 43 00:02:05,840 --> 00:02:09,200 Speaker 2: holdings and Circo. I mean, they're all understandable given just 44 00:02:09,200 --> 00:02:11,280 Speaker 2: some of the travel disruption we're seeing around the globe, 45 00:02:11,280 --> 00:02:15,119 Speaker 2: and all of those shares or off a considerable over 46 00:02:15,280 --> 00:02:17,919 Speaker 2: twenty percent this month. And then companies that use a 47 00:02:17,960 --> 00:02:21,440 Speaker 2: lot of fuel as well, so Courier Business Freightways and 48 00:02:21,480 --> 00:02:24,079 Speaker 2: their main freight two they're both down over double digits. 49 00:02:24,080 --> 00:02:27,360 Speaker 2: So yeah, those companies are really at the pointy end 50 00:02:27,400 --> 00:02:28,880 Speaker 2: of the fuel crisis at the moment. 51 00:02:29,400 --> 00:02:31,400 Speaker 1: And look, do you think that the higher short term 52 00:02:31,440 --> 00:02:35,160 Speaker 1: interest rates from the oil inflation are affecting us as well? 53 00:02:35,360 --> 00:02:37,680 Speaker 2: Yeah, this is some of the second order effects that 54 00:02:37,760 --> 00:02:41,560 Speaker 2: potentially can come through with those higher short term rates 55 00:02:41,760 --> 00:02:44,079 Speaker 2: and oil inflation. I mean, we're seeing some of the 56 00:02:44,560 --> 00:02:47,840 Speaker 2: cyclical stocks in our economy, which we're anticipating a bit 57 00:02:47,880 --> 00:02:51,720 Speaker 2: of a rebound this year, getting hit building materials companies 58 00:02:51,760 --> 00:02:55,680 Speaker 2: like Vulcan Steel and Fletcher Building. Investors are thinking, you know, 59 00:02:55,720 --> 00:02:58,120 Speaker 2: maybe the construction market might slow down a little bit. 60 00:02:58,840 --> 00:03:01,760 Speaker 2: Retirement sector such as Ryman in Somerset I'm in higher 61 00:03:01,760 --> 00:03:03,959 Speaker 2: interest rates and they're a good good for the housing market. 62 00:03:04,440 --> 00:03:06,800 Speaker 2: And then Catman dou I mean they announced today that 63 00:03:06,800 --> 00:03:09,920 Speaker 2: they're going to perform a capital raise this week, so 64 00:03:10,520 --> 00:03:12,640 Speaker 2: you know, I would expect a bit more weakness also 65 00:03:12,680 --> 00:03:16,360 Speaker 2: in the retail sector, particularly if consumers are just spending 66 00:03:16,360 --> 00:03:17,120 Speaker 2: a lot less money. 67 00:03:17,160 --> 00:03:18,800 Speaker 1: Where have been the places to hide? Do you reckon 68 00:03:18,840 --> 00:03:19,800 Speaker 1: in the New Zealand market? 69 00:03:21,400 --> 00:03:25,400 Speaker 2: Yeah, Channel Infrastructure to know on surprise, given the given 70 00:03:25,440 --> 00:03:28,520 Speaker 2: the media attention around them, they're our fuel input terminal. 71 00:03:29,000 --> 00:03:31,720 Speaker 2: The financial markets are giving them a bit of a benefit. 72 00:03:31,760 --> 00:03:35,000 Speaker 2: I mean they're thinking that potentially a bit more resilience 73 00:03:35,000 --> 00:03:37,360 Speaker 2: and fuel storage will be coming in at that site 74 00:03:37,680 --> 00:03:41,200 Speaker 2: post of this. And then Fonterra and Turner's Automotive, I 75 00:03:41,200 --> 00:03:44,760 Speaker 2: mean they both upgraded their earnings forecast this week, so 76 00:03:44,840 --> 00:03:47,040 Speaker 2: the market's put them in the green for the month. 77 00:03:47,160 --> 00:03:50,480 Speaker 2: So you know, the market is still rewarding those companies 78 00:03:50,520 --> 00:03:52,360 Speaker 2: that are putting some good earnings results. 79 00:03:52,080 --> 00:03:53,160 Speaker 1: Through good stuff. 80 00:03:53,160 --> 00:03:55,120 Speaker 3: Hey, Jeremy, always good to talk to you, Jeremy Hutton, 81 00:03:55,440 --> 00:03:59,360 Speaker 3: Milford Asset Management. For more from Heather Duplessy Allen Drive, 82 00:03:59,520 --> 00:04:00,960 Speaker 3: listen to News Talks. 83 00:04:00,960 --> 00:04:04,160 Speaker 1: It'd be from four pm weekdays, or follow the podcast 84 00:04:04,240 --> 00:04:05,280 Speaker 1: on iHeartRadio.