New Zealand has been grabbing international headlines with only two fresh novel coronavirus cases reported this week and
apparently no undetected community transmission. The nation is set to enter the more relaxed alert Level-2, following
the Cabinet meeting scheduled to review alert level decisions on 11 May 2020.
With the death toll remaining at 21, the number of confirmed cases currently stands at 1,139, while 1,332 have recovered
so far.
Flattening, perhaps crushing of COVID-19 curve in New Zealand is setting the stage for robust financial stabilisation
backed by dedicated Government initiatives and Central Bank’s robust monetary stance, offering a strong competitive
advantage to economy to rebuild itself.
Meanwhile, spirited business efforts and growing popularity of digital platforms are innovatively carving out new paths
for economic revival.
Microsoft’s latest proposal of investment in NZ’s digital infrastructure to launch its first data-centre marks its
maiden step towards providing local access to enterprise-grade cloud services, validating outstanding spirit of nation’s
innovation.
Prime Minister Jacinda Arden quoted on Wednesday: ‘New Zealand’s success in curbing the coronavirus has given it a “safe
haven” advantage, allowing the country to be open for investment.’
She further stressed NZ’s efficient approach to tackling the health crisis further underpinning the nation’s brand as
high-grade, sound and safe place to invest in.
Backed by strong virus containment, prospective ‘travel bubble’ discussions between Australia and New Zealand have
further rekindled hopes for trade, travel and tourism space. Prime Minister Jacinda Arden joined Australia’s emergency
cabinet meeting on 5 May 2020 for discussing the possibility of opening borders as a part of the ‘trans-Tasman
Covid-safe travel zone’ proposal allowing virus-safe two-way travel between countries.Market Confidence Extended
S reaffirmed New Zealand’s AA Rating with a positive outlook while indicating that the situation would improve as the
pandemic subsides. Besides, revamped business strategies along with calculated Government moves seem to foster optimism
in the market scenario.
S NZX 50 settled at 10,573 points on Wednesday, up 0.78 percent. Pushpay Holdings (NZX:PPH) and Smartpay (NZX:SPY) joined
the rally with a gain of 20.88 percent and 1.30 percent, respectively.
Meanwhile, the market seems to have extended April gains with Consumer Staples, Health Care, and Financial Services
Sector Index posting a positive return on month-to-date (MTD) basis as on 6 May 2020.S/NZX All Consumer Staples Index was up 0.87 percent MTD to 6,489.02.S/NZX All Health Care Index gained 2.84 percent to 2,342.43 on MTD basis.S/NZX All Financials Index was up 0.3 percent MTD to 707.314 points.
Looking at real estate space, it was noted that ASX-listed fund manager Centuria Capital has finally agreed to acquire
up to 25 percent of stake in leading real estate fund manager Augusta Capital (NZX: AUG) in New Zealand. It comes after
Centuria initially withdrawing the offer in March due to high market volatility led by the coronavirus outbreak.
Centuria has decided to take out of its cash reserves a maximum of NZ$23.6 million in order to invest in Augusta
Capital, which it believes is a unique opportunity to develop a strong presence in New Zealand.
On the other hand, Chinese gaming and social media giant Tencent’s investment in Afterpay (NZX:APT) has amplified
investor confidence in fintech products that are boosting online sales across the country.Consumers’ Confidence Increases for Fifth Straight Week
Economic reopening along with the Government stimulus is broadly directed at the free flow of cash in New Zealand
market. ANZ-ROY Morgan Australian Consumer Confidence gained further 5.3 percent, up for the five weeks straight.
The increase in confidence over last week is majorly attributable to further easing of virus-induced lockdown
restrictions and optimism building around no new daily cases, said David Plank, ANZ Head of Australian Economics.
Stockpiling of essential goods during the lockdown continued to drive market momentum as S Consumer Staple index rose by 14.56 percent and 22.39 percent on Quarter-to-Date (QTD) and Year-to-Date (YTD) basis,
respectively, as at 6 May 2020.
Meanwhile, the nation has witnessed piqued online alcohol sales while overall online retail sales were up by around 350
percent as per Retail NZ.
The trade, for the time being, is reportedly aimed to be localised with e-commerce integration eyed to remain the
primary driving force for consumer spending as New Zealand gradually reboots its operations.Potential Recovery Prospects Budding for Travel Industry
While travel and tourism industry is grappling with grave health and financial crisis, the NZ travel space is witnessing
some momentum these days. Trans-Tasman travel bubble could come as a substantive relief for the beaten-down travel
sector of Australia and New Zealand in the near term.
In the optimism building around the travel space, global surf brand Kathmandu Holdings (NZX: KMD) is planning to reopen
its Australian stores while many of its New Zealand stores are already back in operations. Subsequently, KMD stock price
rose by 9.64 percent on 6 May 2020.
On a related note, Napier’s Council-owned Kennedy Part Resort has further strengthened its position to continue to
provide high-quality accommodation as hopes of domestic tourism recovery emerged with strong future growth.
Notably, Tourism Holdings (NZX: THL) witnessed more than 8% rise in its stock price during its early trade on 7 May
2020.
Adding to odds of getting through the pandemic without the Government intervention, some companies are aiming to stay
afloat backed by varied innovative measures. Boeing was recently in news for raising USD 25 billion after huge bond
sale.
With virus spread under control, New Zealand’s COVID-19 success story continues to grab attention backed by increased
consumers’ confidence, strategic business survival and bounced back market momentum. With hopes of less-intense travel
restrictions with neighbours, upcoming Cabinet meeting remains the key to gauge further path to recovery.