June 3, 2025 • 8 mins
Tom Shallard of Craigs IP updates financial matters.
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Episode Transcript
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Speaker 1 (00:02):
The Muster financial segment brought to you by Craig's Investment
Partner's Gore. This information is general in nature and is
not financial advice. Craig's Investment Partners Limited Financial Advice provided
disclosure statement can be found at craigsip dot com slash tcs.
Speaker 2 (00:19):
Tom Shallard from Craig's Investment Partners joins us on the
Muster Craig. I'll tried Tom. Good afternoon fresh from water
skiing on the first of June on Lake Wanaka, as
you do when you're young and brash.
Speaker 3 (00:31):
Good afternoon, Andy got to be here. Yeah, Well, there's
not a lot of snow on the mountains up in
central Otago, so I took to the lake and I
can report it certainly was caught fresh.
Speaker 2 (00:42):
What so is wetsuit? Was it?
Speaker 3 (00:44):
No wetsuit? Piir of shorts?
Speaker 2 (00:47):
So name more your mad bugger? Look us dollar, it's
the dollars aserve currency status has found itself under increased
scrutiny this year by the sounds of it this year.
Speaker 3 (00:58):
Yeah, the role of the dollar as the world's reserve currency.
It is under a bit of pressure. So traditionally the
dollar strength has been backed by the might of the
US military, strong rule of law, immigration, and topically commitment
to free markets in trade, and that strength's given the
(01:18):
US a pretty big advantage over the last few decades.
It's allowed them to borrow money at lower interest rates
than most countries could dream of, although that does seem
to be starting to shift.
Speaker 2 (01:31):
All based on Donald Trump yep.
Speaker 3 (01:33):
So driven by current policy settings Andy with recent announcements
obviously raising eyebrows, and we're seeing that reflected and rising
bond yields, So investors are becoming more cautious about funding
America's growing deficit.
Speaker 2 (01:49):
I heard the observation this morning a lot of people
in Trump's making these announcements on teriffs, and that a
lot of people are tearing a blind eye now knowing
that it's just a bluff.
Speaker 3 (01:58):
Yeah. Well, I'm not sure sure if you've read Trump's
two thousand and two the art of the Deal, But
a term going round at the moment is the art
of the repeal, the shockun or very good approach.
Speaker 2 (02:13):
So what's the effect on New Zealand with US as
far as hedging your bets?
Speaker 3 (02:16):
So from a New Zealand perspective, we're definitely feeling the
effects of a weeker dollar the US dollars week and
buy about eight percent against the Kiwi in recent months.
So even though the S and P five hundred is
now up around one point seven percent year to date
and just off record heighs, in fact, local investors haven't
(02:37):
seen the full benefit. Returns are being dampened a bit
by the currency shift.
Speaker 2 (02:41):
I was looking at the currencies where they were sitting
this morning actually, and it was interesting. Sixty yu weis
since ninety three cents Australian, forty four pence UK and
fifty three euro, especially against the euro that normally goes
about the fifty cent range. So that's come up.
Speaker 3 (02:57):
Yeah, economic activity is increasing in Europe and that's driven
by increase expenditure on defense, particularly in Germany and infrastructure spending.
Speaker 2 (03:08):
So as far as investors can they huge currency movements regarding.
Speaker 3 (03:13):
US, investors can hedge their foreign foreign currency exposure, and
you know, for a more conservative investor that that that
is quite prudent. For those with a higher risk profile,
generally it's more beneficial over the longer term to remain unhedged.
So most of our assets, being New Zealanders, are tied
to the fortune of the New Zealand economy and the
(03:35):
New Zealand dollar. So think about your house, your salary,
rural land, export prices. So it's actually very beneficial over
the longer term to have exposure to a basket of
foreign assets and foreign currencies. So week a US dollar
makes key we exports into the US less competitive, which
(03:57):
combined with potential looming tariffs, you will be a bit
of a headwind. But there is a silver lining here too.
So while the US dollar has weakened, the pound and
the euro have as we discussed, strengthened against the Kiwi
and that's great news for our exporters, especially sectors like
lamb and tourism. It makes their goods and services more
(04:19):
competitive in those markets.
Speaker 2 (04:20):
Yeah, just coincidentally talking about tourism and of course the
issues regarding the tax break for the entertainment industry and
Nikola Wallace Nichola willis sorry saying she wanted the Avatar
Premier Year to be held in Wellington. So it just
shows US government really values what's going on here and
what Donald Trump putting tariffs and very commas on the
(04:40):
entertainment industry as such, that's got a big flow on
effect for US.
Speaker 3 (04:43):
Too potentially, Yeah, well do and but it's good to
see the current government locking at alternative ways to attract
foreign capital into New Zealand. And yeah, I was reading
just recently about a bill to propose you know, Queenstown
is potentially a technology hub for foreign investors, the Silicon
(05:07):
Valley of New Zealand, if you will, as.
Speaker 2 (05:09):
Long as they can get through the traffic anyway. That's
another matter. Commodities. What's happening there.
Speaker 3 (05:15):
Yeah, so turn into commodities and I'll just briefly cover
oil prices. They're on the move again. We sticks US
screwed up two percent overnight, so that's HUS sixty three
dollars a barrel. That's often a sign forward looking sign
of growing economic activity. When economies are humming, oil demand
tends to rise. And there's also a geopolitical angle here too,
(05:35):
So the conflict between Russia and Ukraine is feed up again. Obviously,
we all saw the drone strikes on Russian airfields and
that's reignited concerns about potential disruptions to the global oil supply.
Speaker 2 (05:47):
As far as everything in a nutshell though, relating back
to what's going on in this Russia UK and conflict.
Is it as bad as what people are anticipating or anticipated,
say eighty months two years ago. Are we actually seeing
the flow on effects of what's going on there? I
mean we talked about this before, about the guess fields
for Germany and the mikes and what's going on there.
Speaker 3 (06:08):
Well, I guess the conflict started in February twenty two
endy and it hasn't really had a big flow on
effect to tur global markets, which is unfortunately quite said,
given the you know, the loss of life that is
occurring there. But yeah, markets have even more so probably
ignored the conflict in the Middle East. So yeah, aside
(06:33):
from probably people moving to gold or rise and crude
oil prices, hasn't been a large flow on effect to
say equity markets.
Speaker 2 (06:43):
And remembering the colled Ukraine, the food bowl of Eastern Europe.
Speaker 3 (06:47):
Yeah, yeah, no, big, big, aarrible country.
Speaker 2 (06:49):
Possitioning yourself flower interest rates. What's a good way to
look at this?
Speaker 3 (06:53):
So look, one key message a lot to finish with,
don't linger too long in term deposits. While they might
feel safe, they could leave you with the declining and
come stream and missed opportunities in the near future. You know,
if you're looking to equity markets, keep an eye on
businesses with long term structural tail ones. I think technology,
artificial intelligence, and healthcare. There are essential holdings in any portfolio,
(07:19):
but valuations do matter, so be patient and look for
opportunities to add to quality names on any weakness.
Speaker 2 (07:26):
Just finally, just a question off the top of the head,
as we look forward into the next season regarding New
Zealand and agriculture, how would you view it looking forward?
Speaker 3 (07:35):
Yeah, so I was just reading Fronterra's guidance this morning,
So ten dollars payout. Interestingly, they provided a range of
between eight dollars and eleven dollars, so it doesn't take
a medical condition to work out the midpoint isn't isn't
ten dollars. But I guess they're signaling to farmers that
they think there is upside there, but just probably just
a cautionary tale. And like what we've talked about today,
(07:57):
geopolitics can have ramifications and all markets and and and
even changes and currency markets could impact health. Ontario will
model their prices for farmers.
Speaker 2 (08:09):
Yeah, absolutely, Tom. Now Craig's investment partners, how do we
get in touch with the teeth.
Speaker 3 (08:12):
Yep, so feel free to pop into the office at
one twenty Main Street Gore or cragsip dot com.
Speaker 2 (08:18):
Good on your time, have fun water skiing. Thanks Tom
Shower out of Craig's investment partners. This is the muster
up Next on a Wednesday afternoon, Nathan Nelson from darien
Z
The Muster financial segment brought to you by Craig's Investment
Partner's Gore. This information is general in nature and is
not financial advice. Craig's Investment Partners Limited Financial Advice provided
disclosure statement can be found at craigsip dot com slash tcs.
Speaker 2 (00:19):
Tom Shallard from Craig's Investment Partners joins us on the
Muster Craig. I'll tried Tom. Good afternoon fresh from water
skiing on the first of June on Lake Wanaka, as
you do when you're young and brash.
Speaker 3 (00:31):
Good afternoon, Andy got to be here. Yeah, Well, there's
not a lot of snow on the mountains up in
central Otago, so I took to the lake and I
can report it certainly was caught fresh.
Speaker 2 (00:42):
What so is wetsuit? Was it?
Speaker 3 (00:44):
No wetsuit? Piir of shorts?
Speaker 2 (00:47):
So name more your mad bugger? Look us dollar, it's
the dollars aserve currency status has found itself under increased
scrutiny this year by the sounds of it this year.
Speaker 3 (00:58):
Yeah, the role of the dollar as the world's reserve currency.
It is under a bit of pressure. So traditionally the
dollar strength has been backed by the might of the
US military, strong rule of law, immigration, and topically commitment
to free markets in trade, and that strength's given the
(01:18):
US a pretty big advantage over the last few decades.
It's allowed them to borrow money at lower interest rates
than most countries could dream of, although that does seem
to be starting to shift.
Speaker 2 (01:31):
All based on Donald Trump yep.
Speaker 3 (01:33):
So driven by current policy settings Andy with recent announcements
obviously raising eyebrows, and we're seeing that reflected and rising
bond yields, So investors are becoming more cautious about funding
America's growing deficit.
Speaker 2 (01:49):
I heard the observation this morning a lot of people
in Trump's making these announcements on teriffs, and that a
lot of people are tearing a blind eye now knowing
that it's just a bluff.
Speaker 3 (01:58):
Yeah. Well, I'm not sure sure if you've read Trump's
two thousand and two the art of the Deal, But
a term going round at the moment is the art
of the repeal, the shockun or very good approach.
Speaker 2 (02:13):
So what's the effect on New Zealand with US as
far as hedging your bets?
Speaker 3 (02:16):
So from a New Zealand perspective, we're definitely feeling the
effects of a weeker dollar the US dollars week and
buy about eight percent against the Kiwi in recent months.
So even though the S and P five hundred is
now up around one point seven percent year to date
and just off record heighs, in fact, local investors haven't
(02:37):
seen the full benefit. Returns are being dampened a bit
by the currency shift.
Speaker 2 (02:41):
I was looking at the currencies where they were sitting
this morning actually, and it was interesting. Sixty yu weis
since ninety three cents Australian, forty four pence UK and
fifty three euro, especially against the euro that normally goes
about the fifty cent range. So that's come up.
Speaker 3 (02:57):
Yeah, economic activity is increasing in Europe and that's driven
by increase expenditure on defense, particularly in Germany and infrastructure spending.
Speaker 2 (03:08):
So as far as investors can they huge currency movements regarding.
Speaker 3 (03:13):
US, investors can hedge their foreign foreign currency exposure, and
you know, for a more conservative investor that that that
is quite prudent. For those with a higher risk profile,
generally it's more beneficial over the longer term to remain unhedged.
So most of our assets, being New Zealanders, are tied
to the fortune of the New Zealand economy and the
(03:35):
New Zealand dollar. So think about your house, your salary,
rural land, export prices. So it's actually very beneficial over
the longer term to have exposure to a basket of
foreign assets and foreign currencies. So week a US dollar
makes key we exports into the US less competitive, which
(03:57):
combined with potential looming tariffs, you will be a bit
of a headwind. But there is a silver lining here too.
So while the US dollar has weakened, the pound and
the euro have as we discussed, strengthened against the Kiwi
and that's great news for our exporters, especially sectors like
lamb and tourism. It makes their goods and services more
(04:19):
competitive in those markets.
Speaker 2 (04:20):
Yeah, just coincidentally talking about tourism and of course the
issues regarding the tax break for the entertainment industry and
Nikola Wallace Nichola willis sorry saying she wanted the Avatar
Premier Year to be held in Wellington. So it just
shows US government really values what's going on here and
what Donald Trump putting tariffs and very commas on the
(04:40):
entertainment industry as such, that's got a big flow on
effect for US.
Speaker 3 (04:43):
Too potentially, Yeah, well do and but it's good to
see the current government locking at alternative ways to attract
foreign capital into New Zealand. And yeah, I was reading
just recently about a bill to propose you know, Queenstown
is potentially a technology hub for foreign investors, the Silicon
(05:07):
Valley of New Zealand, if you will, as.
Speaker 2 (05:09):
Long as they can get through the traffic anyway. That's
another matter. Commodities. What's happening there.
Speaker 3 (05:15):
Yeah, so turn into commodities and I'll just briefly cover
oil prices. They're on the move again. We sticks US
screwed up two percent overnight, so that's HUS sixty three
dollars a barrel. That's often a sign forward looking sign
of growing economic activity. When economies are humming, oil demand
tends to rise. And there's also a geopolitical angle here too,
(05:35):
So the conflict between Russia and Ukraine is feed up again. Obviously,
we all saw the drone strikes on Russian airfields and
that's reignited concerns about potential disruptions to the global oil supply.
Speaker 2 (05:47):
As far as everything in a nutshell though, relating back
to what's going on in this Russia UK and conflict.
Is it as bad as what people are anticipating or anticipated,
say eighty months two years ago. Are we actually seeing
the flow on effects of what's going on there? I
mean we talked about this before, about the guess fields
for Germany and the mikes and what's going on there.
Speaker 3 (06:08):
Well, I guess the conflict started in February twenty two
endy and it hasn't really had a big flow on
effect to tur global markets, which is unfortunately quite said,
given the you know, the loss of life that is
occurring there. But yeah, markets have even more so probably
ignored the conflict in the Middle East. So yeah, aside
(06:33):
from probably people moving to gold or rise and crude
oil prices, hasn't been a large flow on effect to
say equity markets.
Speaker 2 (06:43):
And remembering the colled Ukraine, the food bowl of Eastern Europe.
Speaker 3 (06:47):
Yeah, yeah, no, big, big, aarrible country.
Speaker 2 (06:49):
Possitioning yourself flower interest rates. What's a good way to
look at this?
Speaker 3 (06:53):
So look, one key message a lot to finish with,
don't linger too long in term deposits. While they might
feel safe, they could leave you with the declining and
come stream and missed opportunities in the near future. You know,
if you're looking to equity markets, keep an eye on
businesses with long term structural tail ones. I think technology,
artificial intelligence, and healthcare. There are essential holdings in any portfolio,
(07:19):
but valuations do matter, so be patient and look for
opportunities to add to quality names on any weakness.
Speaker 2 (07:26):
Just finally, just a question off the top of the head,
as we look forward into the next season regarding New
Zealand and agriculture, how would you view it looking forward?
Speaker 3 (07:35):
Yeah, so I was just reading Fronterra's guidance this morning,
So ten dollars payout. Interestingly, they provided a range of
between eight dollars and eleven dollars, so it doesn't take
a medical condition to work out the midpoint isn't isn't
ten dollars. But I guess they're signaling to farmers that
they think there is upside there, but just probably just
a cautionary tale. And like what we've talked about today,
(07:57):
geopolitics can have ramifications and all markets and and and
even changes and currency markets could impact health. Ontario will
model their prices for farmers.
Speaker 2 (08:09):
Yeah, absolutely, Tom. Now Craig's investment partners, how do we
get in touch with the teeth.
Speaker 3 (08:12):
Yep, so feel free to pop into the office at
one twenty Main Street Gore or cragsip dot com.
Speaker 2 (08:18):
Good on your time, have fun water skiing. Thanks Tom
Shower out of Craig's investment partners. This is the muster
up Next on a Wednesday afternoon, Nathan Nelson from darien
Z
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