New Zealand Investing and Economy

By pjain      Published June 15, 2021, 4:53 p.m. in blog Invest   

New Zealand Investing 4 US

Stock Investing 101

Long term NZ Market

NZX 50 Index

2020 perf - 13.0% return for the NZX 50

  • Returns of NZX 50 By year
Year Open Close Gain/Loss Gain/Loss (in %)
2005 3064.44 3370.51 306.07 10.0%
2006 3370.51 4055.47 684.96 20.3%
2007 4055.47 4041.38 -14.09 -0.4%
2008 4041.38 2715.71 -1325.67 -32.8%
2009 2715.71 3230.15 514.44 18.9%
2010 3230.15 3309.03 78.88 2.4%
2011 3309.03 3274.71 -34.32 -1.0%
2012 3274.71 4066.51 791.8 24.2%
2013 4066.51 4737.01 670.5 16.5%
2014 4737.01 5568.28 831.27 17.6%

ENZL ETF exp 0.5% y1.8%

NZ has Better relations with China than AU

NZ conservative Monetary, Economic, Health Policies

R

Media, Sources

IB, Analysts

  • https://craigsip.com/insights

Economy

Timeine

2021 Reopening

Overall NZ has a strong economic position, and buoyant sentiment esp emerging markets amidst global markets.

Fonterra’s dairy payout forecast has been increased twice in the past few months, the housing market is extremely buoyant, business confidence has returned to pre-COVID levels and the unemployment rate hasn’t risen nearly as much as expected.

NZ dollar to remain strong, which could be a headwind for some exporters.

The low interest rate environment is unlikely to change

2020 Covid19 Hurt

Severe effects of the COVID-19 pandemic. As extended border closures and follow-up lockdown measures in Australia took hold

Macros, Indicators

Demographics

Politics

=== Stock Investing By Sector

Ag, Food

ACOPY

  • FY'20 v -27.3%

  • About: The a2 Milk Company Food Producers

SARDY

  • About: Sanford Food Producers

Staples, Goods

TDMEY

  • About: Trade Me Personal Goods

Discr, Entertainment

SKYTY

  • About: SkyCity Entertainment

Health and Pharma

EBOSY HealthCareEquip

  • FY'20 Stock Value +26.1% '20

  • THESIS

  • Has a solid track record of earnings growth which has been driven by both organic growth and astute acquisitions.
  • Great defensiveness

  • CORE: healthcare - population ages remains robust

  • SEG: animal care - pet ownership continues to increase and will provide further growth opportunities.

  • About: EBOS is Australasia’s largest diversified pharmaceutical and veterinary products group.

Fisher & Paykel Healthcare

  • FY'21
  • headwind for the company during 2021 will be the strong NZ dollar. While this could be a drag on earnings, it doesn’t change the fact that we see strong growth potential across the underlying business.
  • FY'20 beneficiary of the pandemic during 2020, with its products being rapidly embraced in response to the health crisis. This has expanded the company's market and sets the business up well for continued growth.

  • THESIS

  • One of the highest quality companies listed on the NZX. It has excellent products and leading positions in the markets in which it operates, as well as a proven track record and significant future growth opportunities.

  • RISKS

  • ABOUT: Fisher & Paykel Healthcare

Housing, Construction

FCREY

  • About: Fletcher Building Construct&Materials

SKLUY

  • About: Skellerup Holdings Construct&Materials

REITs, Utilities and Telecom

The electricity sector has a stable demand profile and generates strong, predictable cash flows.

RYHTY Ryman Healthcare

Ryman is New Zealand’s leading listed retirement and aged care provider. We see Ryman as the best operator in the sector, based on its high-quality portfolio, land bank, proven track record and continuum of care model.

A buoyant housing market will benefit the company in 2021, while the expansion into Australia should get back on track following the lockdowns in Victoria.

The company handled the pandemic extremely well, which will have earned Ryman huge goodwill with existing residents as well as ensuring broader brand recognition.

PYIYY

  • About: Property for Industry RealEstateInv.Trust

Mercury NZ

Mercury is a low marginal cost producer of electricity with a long-life renewable generation base and a loyal customer base.

The company’s strength is its North Island hydro generation schemes, which insulate the business from any disruption that could arise should the Tiwai Point aluminium smelter close.

Mercury also has a strong focus on sustainability and should benefit from the drive towards a cleaner environment.

CHRYY

  • About: Chorus Fixed Line Telecom.

SPKKY

  • About: Spark New Zealand Limited Fixed Line Telecom.

Energy

Meridian Energy (+37.6% '20)

NZEOY

  • About: New Zealand Oil and Gas Oil & Gas Producers

NZRFY

  • About: New Zealand Refining - Oil & Gas Producers

COENY

  • About: Contact Energy Electricity

Services

Travel, Leisure, Airlines, Airports

ZELDY

  • About: Air New Zealand ZELDY

AUKNY

Auckland International Airport AUKNY

Logistics, Transports, Railways, Ports

Freightways (+19.8% '20)

Mainfreight (+50.6% '20)

Mainfreight is simply a great New Zealand company. It has an impeccable track record, a strong management team and culture, and no shortage of global growth options.

The company performed extremely well in 2020, and we think the platform has been set for an even better 2021, particularly if we see an economic rebound take hold as many countries begin to reopen.

The only negative we can point to is that Mainfreight is highly priced. Then again, as is the case with real estate, highly quality businesses are rarely cheap.

PTAUY

  • About: Port of Tauranga IndustrialTransport

MFGHY

  • About: Mainfreight IndustrialTransport

Finance

NZSTY

  • About: NZX Limited Financial Services

PPSHY

  • About: Pushpay Holdings Financial Services

Technology


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