Your Quarterly E-Zine
Edition 11 • December 2019

This website contains the latest edition of Forsyth Barr Focus, a quarterly on-line magazine written by senior members of Forsyth Barr's investment team.

If you experience any difficulty in accessing Forsyth Barr Focus,
please call 0800 367 227, or e-Mail for assistance.



Auckland and Wellington consistently feature in “most livable city” surveys. New Zealanders are realising just how lucky we are. But we’re not the only ones.

Today’s permanent citizen departures are near cyclical lows. Meanwhile, migration numbers have risen to record levels in both per-capita and absolute terms, with over 72,000 permanent or long-term (PLT) migrants entering New Zealand in the last 12 months. This is helping drive strong GDP growth.

New Zealand’s attractiveness is a story of relatives. The trend of more borders, not less, and the not-so-Presidential behavior from the leader of the free world have both contributed to global political uncertainty.

Countries such as New Zealand and Australia have become market safe-havens, being relatively insulated from the uncertainty and are backed by relatively stable economic environments that look unlikely to change in the near term.

It’s not just qualitative factors playing a part, New Zealand’s grass is actually greener, with our economy achieving some of the highest growth in the OECD over the past five years which has helped lead to an improved labour market.

While the 2014 NZ electoral survey suggested some support for reducing immigration numbers, immigration has been overtaken by issues such as housing, education, infrastructure spend and healthcare in the minds of Kiwis.

With all political parties looking to increase spending, the political will to cut the tax base and reduce the supply of skilled labour will be limited. We have already seen National and the Greens walk back their immigration policies; and view Labour and NZ First as all bark and no bite.

The New Zealand equity market looks expensive from a bottom-up, fundamental basis. Continued strong net migration provides a more positive top-down view.

Of those sectors poised to benefit from strong migration, Aged Care is the most positively exposed with high migration partially offsetting concerns around large development pipelines as well as providing buying support in the housing market, lowering the risks around a correction.

Andy Bowley
Head of Research