Bay of Plenty Business News February/March 2017

The investment
year ahead
The start of a year is always a good time
to reflect on the year past, and plan for
the coming year. In terms of investment
markets, the report card for 2016 shows a
year of two halves.
Actually, it was more a
year of three quarters,
and a last quarter. The
defining event affecting the
last quarter was of course the
election of Donald Trump in
November. The lead-up to
the election and the immediate
period following the election
saw increased volatility
in markets around the world.
Markets do not like uncertainty,
and uncertainty was delivered
in bucket loads in the last
quarter as markets struggled to
understand the implications of
the election result.
Policy announcements of
the President-elect indicated
greater investment in infrastructure,
defence, and tax
cuts. All of these changes
would require borrowing to
fund them. As a result, longer
term interest rates moved up
in the United States. This in
turn had a ripple effect across
the world, including New
Zealand.
In New Zealand, in the last
quarter, we saw bond markets
negatively affected as
investors were prepared to
sell longer-dated fixed interest
securities at a lower price, on
the expectation that they could
reinvest into new securities
with a higher interest rate.
On the sharemarket, companies
with strong dividend
yields, such as property companies,
were sold down on
the expectation that property
values would fall lower, due to
higher interest rates.
Overall, despite the downturn
in the last quarter, the New
Zealand sharemarket returned
8.8 percent for the 2016 calendar
year, as measured by
the NZX50 Gross index. This
index measures the capital and
income returns of the 50 largest
companies on the market.
The world sharemarkets were
up 7.5 percent in US dollar
terms, and 5.9 percent in NZ
dollar terms due to a slight
rise in our dollar against the
US dollar, as measured by the
MSCI World index.
The Official Cash Rate
(OCR) was lowered 75 basis
points to a new low of 1.75
percent over the year as inflation
was next to zero. The
Reserve Bank of New Zealand
Hobbiton experience offers
exciting hosting selections
Hobbiton Movie Set
Location
Experience the real Middleearth
with a spectacular
event at Hobbiton Movie Set.
Situated on a 1250 acre
working sheep and beef farm
is The Hobbiton Movie Set.
When scouting around for
settings for his epic movie
adaptation of The Lord of the
Rings Trilogy, Kiwi director
Sir Peter Jackson found just
what he was looking for in
the green paddocks of Waikato
just outside Matamata.
BAY OF PLENTY BUSINESS NEWS February/March 2017 7
WHAT TO DO WITH YOUR MONEY
> BY BRETT BELL-BOOTH
Bay of Plenty benefits from Ultrafast Fibre roll out
Bay of Plenty communities
will benefit
from an announcement
that Ultrafast Fibre has won
a contract to connect a further
12 central North Island
communities as part of the
Government’s ultra-fast
broadband (UFB) initiative
expansion.
Te Puke, Omokoroa and
Katikati are among the new
locations that will benefit over
the next few years.
Ultrafast Fibre (UFF) has
already successfully completed
deployment of a 3000
kilometre fibre optic network
to eight central North Island
cities and towns under the
first tranche of the UFB initiative.
The current UFF network
is available to more than
190,000 homes, businesses,
schools, medical centres and
hospitals. The Hamiltonbased
company has already
connected around 67,000 of
those premises, as demand
for next generation broadband
continues to grow rapidly.
UFF chief executive,
The Hobbiton Movie Set Tour
The Hobbiton tour acts as
a perfect incentive activity.
Your guide will escort you
through the twelve-acre site,
recounting fascinating details
of how the Hobbiton Movie
Set was created. Hobbit holes,
The Green Dragon Inn, the
Mill and other structures can
be viewed and you will see
how this beautiful piece of
Waikato farmland was transformed
into The Shire from
Middle-earth.
William Hamilton says the
expanded network footprint
– which will reach a further
22,790 homes and businesses
over the next few years – is
eagerly anticipated by these
communities and the Retail
Service Providers who will
offer them fibre broadband
services.
“We know smaller centres
are very keen to access the
same high-speed communication
infrastructure as the big
cities already do. Along with
our partners, we are delighted
to be recognised for our
achievements to date and to
now continue playing such an
important part in expanding
access to this fantastic opportunity
for New Zealanders,”
says Mr Hamilton.
Ultrafast Fibre is 100
percent community owned
through WEL Networks Ltd
and Waipa Networks Ltd.
The areas allocated to
soon join the Ultrafast Fibre
network are Ngaruawahia,
Huntly, Kihikihi, Raglan,
Eltham, Inglewood, Stratford,
The Green Dragon Inn
The Green Dragon Inn was
the meeting place for all residents
of Hobbiton, who would
gather in the warm surroundings
of the bar to chatter about
the day’s events.
An exact replica of The
Green Dragon Inn, as seen in
The Lord of the Rings and The
Hobbit trilogies, has been masterfully
recreated in the heart of
The Shire.
The barrels of The Green
Dragon Inn are filled with our
exclusive Southfarthing ale,
stout, cider and gingerbeer, a
perfect match to any feast in
Waitara, Putaruru, Te Puke,
Omokoroa and Katikati.
“We are pleased to be in a
position, where we can now
talk directly with the communities
and stakeholders in the
extended footprint about the
programme schedule ahead.
Of course, today’s announcement
is also great news for our
Retail Service Provider partners
who will be able to offer
highly competitive broadband
plans as areas are completed.
It is certainly an exciting time
of growth and opportunity for
everyone.”
Mr Hamilton says increasingly
people expect reliability,
consistency of performance as
well speed from their broadband.
As more and more high
definition TV, video and gaming
content is accessed online,
often from multiple devices
at the same time, this is really
only possible on ultra-fast
fibre broadband.
“As well as benefits to
householders accessing an
ever-increasing digital world,
with ultra-fast broadband,
has a target of keeping inflation
between one percent and
three percent, so a lower OCR
is an attempt at trying to stimulate
growth and inflation.
Looking ahead for the rest
of 2017, uncertainty still exists
as President Trump’s early
days are yet to reveal whether
his election rhetoric will
translate into concrete action.
However, sharemarkets have
increased in value on the back
of higher expected growth,
from increased spending flowing
into increased corporate
earnings. Economic growth is
expected in the United States
to underpin reasonable returns.
European economic activity
also is on the improve, and
in the United Kingdom, those
companies with an export
focus are seen to do better as
Sterling loses value as Brexit
the capability and potential
of business communities in
these towns will be fully
unleashed as they take full
Investment Advisor with Forsyth Barr Limited in Tauranga.
Phone: (07) 577 5725 or email brett.bell-booth@forsythbarr.co.nz
the Shire.
The Party Marquee
The Party Marquee is our
fully themed marquee created
from authentic canvas. The
marquee has beautiful hardwood
floors and has been
placed adjacent to The Green
Dragon Inn.
Festively decorated throughout
with glowing lanterns and
coloured bunting, the Party
Marquee creates a party atmosphere
to remember.
Evening Dinner tours
Experience Hobbiton Movie
Set at dusk with a guided
evening tour through the Shire.
The tour concludes at The
Green Dragon Inn with a complimentary
beverage from our
exclusive Hobbit Southfarthing
range. The guests will then be
moved through into The Green
Dragon dining room and treated
to a banquet feast fit for
a Hobbit. The tables will be
full of traditional Hobbit fare
and, as is the tradition in the
Shire, second helpings are
encouraged. To conclude this
premium Hobbiton Movie Set
experience, after dinner the
guests will rejoin their guide to
make their way back through
competitive advantage of
practically unlimited data and
cloud computing, equal to that
you would expect to find in
If you are considering your current
investment arrangements, perhaps
it’s time to get a complimentary review
Forsyth Barr is a New Zealand owned firm with 21 offices nationwide
including three offices in the Bay of Plenty and Waikato regions.
Supported by Forsyth Barr’s research and investment expertise, our Authorised
Financial Advisers can work with you to deliver a personalised approach taking
into account your investment objectives, preferences and your tolerance for risk.
To make an obligation free appointment to discuss your investment
arrangements, contact your local Forsyth Barr office by calling 0800 367 227.
We look forward to discussing how our investment advice can work for you.
Disclosure Statements are available on request and free of charge.
Fees and charges will apply if you elect to have a continuing relationship with Forsyth Barr.
nears.
Here at home, it does look
like we have seen the bottom
in interest rates, with mortgage
rates already starting to lift.
Residential property seems to
have peaked, or at least be
close to its peak. While deposit
rates are likely to see some lift,
large increases are not expected.
Longer term bonds will
also require small increases in
rates above the four percent
to five percent mark being
offered last year, to attract
investors. Our local sharemarket
is expected to increase in
value in the high single digit
range over the year, with better
returns more likely from those
companies with a growth and
export focus rather than an
income focus.
Risk is always something
to be considered for investors.
Global bank UBS identifies
five main risks, part of
a list of 28 identified risks,
in 2017: 1) Trumponomics –
non-delivering Trump promises;
2) Rising protectionism; 3)
Geopolitics; 4) Populism leading
to European disintegration;
5) Withdrawal of central
bank support. While each of
these risks on their own may
derail investors’ expectations
this year, none are considered
highly probable.
Overall then, a year of
modest returns is expected for
investors with a diversified
investment portfolio.
This column is general in
nature and is not personalised
investment advice. Disclosure
Statements for Forsyth Barr
Authorised Financial Advisers
are available on request and
free of charge.
the wandering paths of the
Shire. Each guest will receive
an authentic handheld lantern
to light the way. This stunning
journey under moonlight
will travel through the village
breathtakingly lit up with
Hobbit hole chimneys smoking
and lanterns glowing against
the darkness.
major first world cities. This
represents a very significant
economic development opportunity,”
says Mr Hamilton.
TAU5162-01 – © Forsyth Barr Limited August 2016
WHERE ARE YOU IN THE DIGITAL
*Read the full article in this paper, or on our website
www.stratusblue.nz
RACE FOR THE
CUSTOMER?
TECHNOLOGY SOLUTIONS
FROM GROUND TO CLOUD