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A Broker's View

New Zealand Stock Update: Turners Automotive Group

Turners are a company at the coalface in terms of New Zealand’s economic growth. The company is named for their well-known car auction business, which accounts for 37% of operating profit. This is the biggest seller of second hand cars in NZ. The auction house is really just part of an overall supply chain that is focused on providing finance and insurance. Turners Auctions provides ready access to potential clients in this regard. The finance and Insurance part of the...

Australian wide moat Stock: Wesfarmers Ltd

The conglomerate of Wesfarmers (ASX: WES) is shielded by cost advantage and the intangible brand power of its hardware store chain Bunnings. And it’s not just your weekend tinkerer visiting the vast network of stores. Across Australia and New Zealand, Bunnings supplies project builders, commercial tradespeople and the housing industry. It employs 43,000 people, with revenue of $12.5 billion, and a network of 375 trading locations, comprising 265 warehouses, 75 smaller format stores and 32 trade centres. It’s this scale...

Economic Update 2019

Investment markets equity prices have had a good start to the year, though the price gains have yet to recover all the ground lost in the global sell-off late last year. The more defensive, income-oriented sectors have done especially well as investors have worried less about the valuation threat from potential bond yield rises, and have viewed less cyclical equities as a useful hedge against global growth shocks. Looking ahead, the central scenario is ongoing global growth at a modestly...

Capital Gains Tax - The Tax Working Group

A SUMMARY OF SOME RECENT TAX REFORMS IN NZ There is currently no broad based capital gains tax (CGT) in New Zealand, although certain “gains” are deemed to be income in certain circumstances. Income tax for example does apply to property transactions in certain circumstances, particularly in the case of speculation. New Zealand’s last major program of tax reform occurred in the 1980s. This included the following changes: The top marginal rate of income tax was reduced from 66% to 33%...

Myth Busting UK pension transfers

The Internet is a wonderful source of information but it also allows for a lot of misinformation and half truths to flourish! This includes what is said about transferring UK pensions to New Zealand. So I thought it time to try and dispel some of the more common myths about UK pension Transfers. Myth 1: Since Kiwi Saver Schemes have lost their QROPS status I can't transfer my UK Pensions to New Zealand? Wrong, there are a number of schemes in...

Oil: The highs and lows of cyclical commodities

OIL PRICE ANALYSIS Oil is so much more than a fuel. It’s a force even bigger than its trillion-dollar market. It’s a weapon, a strategic asset, a curse. It’s a maker and spoiler of fortunes, a leading indicator and an echo chamber. Each has a part in determining oil prices. THE BACKGROUND During the mid-20th century, a group of multinational oil giants known as the Seven Sisters (including the companies that became Exxon Mobil, Chevron and BP) dominated the market....

A Broker's PreView - Coats Group Tidying up Loose Threads

Overview: Coats Group is the last remnants of Sir Ron Brierley’s Guinness Peat Group. Many Kiwi investors should now be checking those bottom drawers as Coats Group is currently preparing to delist from the NZX and will only be tradable on the London Stock Exchange. Pros: Coats Group is a UK based thread maker with history dating back to the 1750’s. The company employs 20,000 people in 70 countries across 6 continents. They reported revenue of US$750 million, and operating...

A Broker's PreView - Bank of New Zealand Subordinated Unsecured Debt Security

Issuer: Bank of New Zealand Type of Instrument: Subordinated Unsecured Debt Security Overview: Given the low interest rate environment we have at the moment, many investors will look at the 5.314 percent fixed for five years on offer from BNZ with unabashed glee. Most will probably make a direct comparison to the rates available on term deposit and wonder if the 5.314 percent was a misprint. However, given the structure of the Notes, comparing it to term deposits is inappropriate....

A Broker's PreView - FlexiGroup Flexes Acquisition Muscle with F&P Finance Purchase

Overview: Australian company, FlexiGroup, may not be a household name in New Zealand, but their pending acquisition of Fisher & Paykel Finance means that many readers will soon have a relationship with the Company. Pros: In fact the brands under the F&P Finance banner, Q Card and Farmers Card comprise 21 percent of New Zealand credit cards. Although in the pocket of 21 percent of NZ card holders, the spend on these cards only represents 2 percent of New Zealand...

A Broker's PreView - Healthy Returns for Ebos Investors

Overview: Investor expectations were high for the Ebos Group Annual General Meeting (AGM) this week. In the two months preceding the AGM, the share price rose 28 percent as investors started to buy into the Ebos growth story. The 2013 acquisition of Australian medical supplies wholesaler, Symbion, is helping Ebos achieve their growth ambitions. Pros: Growth was the theme of the AGM, with CEO Patrick Davies noting they “are confident of delivering another year of double digit constant currency profit...
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