Barfoots’ listings crash 80 percent to 239 in April and MD says worse is to come, but average prices fall just three percent. Westpac’s profit halves on Covid-19 and Cannasouth does a $6m deal
Auckland sales halve: Auckland’s biggest real estate agency chain Barfoot & Thompson reported the Covid-19 lockdown had halved property sales in April to 552 from 1,096 in April 2019, while the average price of $962,136 was 3 percent less than in March.
‘Brace for impact’: Managing director Peter Thompson said many of the April sales had been agreed in March and did not give a complete picture of the state of the market. “It will not be until May’s trading results are available in early June that a true indication of where benchmark prices are at post Covid-19.”
80 percent down: New listings crashed 87 percent to 239 properties in April from March, and were down 80 percent on April 2019. Thompson said 40 percent of all sales for the month were for properties under $500,000 category, while the share of properties in the $1 million-plus category was down to a quarter, from about a third in comparable months.
Profit slammed: Westpac New Zealand’s reported its first-half net profit halved to $256 million because bad debt provisions rose to $211m from $14m in the first half of last financial year.
Early days: CEO David McLean said the result reflected only the early impacts of covid-19. Westpac’s Australian parent, said last week the New Zealand bank’s charges include provisions for “two large exposures.” Westpac Australia announced last week that its results would include A$2.24 billion in charges against profit relating to expected covid-19-related losses.
Stepping up: McLean pointed to Westpac NZ cutting fees temporarily and allowing payment deferrals on mortgage and business loans, adding it had received more than 600 applications for loans under the Government’s business finance guarantee scheme.
Deal done: Medicinal cannabis research company Cannasouth raised $6 million from shareholders to keep expanding. The company sold 15.8 million shares at 38 cents, a 20.7 percent discount to the five-day volume weighted average price.
White labelled: Cannasouth announced it had entered into a supply deal with MediPharm Labs Australia, a subsidiary of Canadian company MediPharm Labs, for the supply of white label medicinal cannabis products into the local market under the newly announced New Zealand Medicinal Cannabis Scheme.
Correct dosage: Cannasouth CEO Mark Lucas said the agreement was a “great first step in entering the market by supplying prescribers and patients with a range of affordable, quality pharmaceutical-grade medicinal cannabis products.” The agreement gives Cannasouth exclusive rights to the formulation and dosage forms set out by MediPharm for the next two years, subject to regulatory approvals and insurance.
Digi-hire: General insurance provider Tower announced the appointment of Blair Turnbull as its new CEO and said he brought with him experience in delivering large-scale digital transformation. Turnbull had worked at London-based Aviva Group, a savings and insurance business and at ASB Bank, where he was general manager of wealth and insurance.
Viva Aviva: Tower said he had repositioned Aviva as an award-winning digital player, doubling the size of its UK digital business between 2015 and 2019. Tower shares ended the day down 1.6 percent at 62 cents.
QE for the rich: Ratings agency Fitch said that central banks have injected close to US$100bn to prop up investment funds hit by the coronavirus-induced market turmoil, raising fresh questions about the systemic risks posed by the asset management industry.
‘We’ll help you’ Monetary authorities, including the US Federal Reserve and the Reserve Bank of India, had stepped in to relieve stress on their fund markets after the escalating coronavirus crisis triggered outflows and sharp falls in asset prices.
Moral hazard 101: The news is likely to increase the concerns of policymakers about the potential for instability in the funds industry that could trigger the next financial crisis. In April, the IMF warned that further outflows from vulnerable bond funds risked running down managers’ cash buffers, triggering renewed turbulence and clogging up credit markets.
Double trouble: Investment management has grown significantly since the GFC, now controlling assets of about US$55tn, vs US$24tn in 2008, according to the Investment Company Institute, the US trade body. Fitch estimated the industry’s asset pool was now equal to 64 per cent of global GDP, versus 38 per cent in 2008.
GDP crash: Hong Kong’s GDP fell a record nine percent in a March quarter dogged by riots and Covid-19. It’s the third straight quarter of contraction for the trade and finance hub.
Sell off: Prior to the release of yesterday’s GDP data, Hong Kong’s benchmark Hang Seng sharemarket index fell nearly 4.2 percent, its worst day since the middle of March, as investors fretted about renewed tension between the United States and China.
Popular guy: One U.S. CEO is in the running to be the most popular boss in the country after he announced he would give away the US$1.6 million profit he made trading shares in recent weeks to his 400 employees. Larry Connor is the CEO of Connor Group, which owns and operates high-end apartments in Dayton, Ohio. He said each employee would receive a cheque for between US$2000 – US$9000. Most said they were stunned after Connor told them in a staff video.