The June quarter has so far seen the NZX50 give back its gains from the 1st quarter of 2024, with the market now broadly flat.

To steal a line from my last quarterly update, “This continues a recent trend of the NZX50 under-performing its global peers.”

During our last Investment Committee meeting, we discussed the most recent reporting season, which saw aged care get sold

off on slower sales and continued cash flow issues. We also saw downgrades from Spark, Tourism Holdings and the Warehouse.

These downgrades show that higher interest rates are continuing to bite, and it is the Committee’s position that this economic pressure should flow through to lower interest rates, perhaps sooner than the Reserve Bank of New Zealand is currently predicting.

This was the sentiment shared by Betashares Chief Economist David Bassanese, who updated the Committee on the NZ and Global outlooks. Both were broadly positive for equities and bonds.

Whilst most of the time, the Committee is focused on the markets, it was nice to take a moment to thank one of the Committee’s longest serving members. Mike Macfarlane, Managing Director at Investor Link Securities, has served as an independent member of the Investment Committee for 10 years. Having served most of those 10 years with Mike, it was my great pleasure to present him with a chart showing the long-term performance of the stock market throughout the last 100 years, noting, of course, that the long-term path of the market over that period was always upwards!

Grant Davies – Chairperson