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NZ trade partners’ economies brought into view at Summit

22 March 2018

NZ trade partners’ economies brought into view at Summit

The strengths and vulnerabilities of New Zealand’s main trading partners’ economies have been a key focus at a major investment conference in Auckland today.

Nikko Asset Management NZ’s Investment Summit was attended by more than 150 financial services professionals and investors at the Hilton Hotel this morning.

Goldman Sachs AM’s Head of Fixed Income Asia-Pacific, Phil Moffitt, told the audience his firm’s view is that the steady US expansion is set to continue, with bearish rates and tax reform that is supportive of borrowing and lending.

“Markets are faced with an array of countervailing factors, which taken together, lead us to conclude that the current investment backdrop warrants cautious optimism,” said Moffitt. “But any deterioration in the US fiscal and trade balance may put downward pressure on the US dollar.”

Nikko AM Global Equities Investment Director, James Kinghorn, said real global GDP growth is back at its long run (50 year) average, at around 3.75 percent.

“Global growth is better, but debt remains high,” said Kinghorn. “In 2017, global debt stood at US$217 trillion, or 327% of GDP, compared with 246% of GDP in 2002, with the sharpest expansion of debt happening in China.”

And British economist Andrew Hunt said global growth has gained momentum thanks to China's surging demand for foreign imports, as China’s households save less and spend more.

"Through its rising demand for imports and inflating export prices, China represents a potential exogenous shock to the global system, in the form of exported inflation,” Hunt said.

Hunt said New Zealand's exchange rate is at a "demanding level" and debt remains high. "However, you benefitted immensely from a lift in the terms of trade last year, and this will be an indicator to watch if your capital account face headwinds.”

Other speakers were JP Morgan Alternative AM Hedge Fund Solutions CEO, Paul Zummo; Nikko AM NZ Head of Equities, Stuart Williams; and Nikko AM NZ Head of Fixed Income, Fergus McDonald.

Nikko AM NZ Managing Director George Carter said the annual Investment Summit highlights Nikko AM’s global connectivity. “We’re pleased to be able to bring high calibre experts here for the benefit of our partners and clients, who are responsible for the savings and investments of many thousands of Kiwis.”

(Ends)

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