New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Building weekly</h2>
New Zealand
<ul>
<li>Signs lower rates are benefitting the house market (REINZ, Aug.): House sales up +5.2% mom, -6.1% yoy (previous +4.9% mom, +6.6% yoy). Whilst sales are down yoy, inventory is tight, particularly outside Auckland – new listings down -14% you in Auckland, and -10% elsewhere. Days to sell Auckland +2 yoy to 44 (vs long-term average 35), ex-Auckland +2 to 37 (vs. long-term average 42).&nbsp;House prices tick higher: +1.3% mom, +2.9% yoy (previous +0.2% mom, +1.5% yoy), with Auckland +1.3% mom, -1.5% yoy and ex-Auckland +1.5% mom, +6.8% yoy.</li>
<li>Tight house supply continues to reflected in strong rental growth (Aug.): 3m rolling average rents – Auckland +2.4% yoy, Wellington +6.5%, rest of North Island +6.6%, Canterbury +2.4% and rest of South Island +6.5%.</li>
<li>Net migration remains supportive (12 months to Jul.): +52.7k (previous +51.5k). Post measurement changes the exact short-term trends are unclear, however, there is no doubt the level remains elevated and supportive of demand.</li>
<li>Steel &amp; Tube looking to sell excess property:&nbsp;At its recent result STU said it was looking at selling three properties with a total market value of c.NZ$14-15m.&nbsp;<a href="https://www.stuff.co.nz/business/115736123/steel--tube-still-cashing-up-surplus-properties-offering-a-big-christchurch-industrial-for-sale" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.stuff.co.nz/business/115736123/steel--tube-still-cashing-up-surplus-properties-offering-a-big-christchurch-industrial-for-sale&amp;source=gmail&amp;ust=1568854986526000&amp;usg=AFQjCNGZwD_nMdHdbCkcKI9S9MyKKBYJzQ" rel="noopener">Steel &amp; Tube still cashing up "surplus" properties offering a big Christchurch industrial for sale</a></li>
<li>He said, she said, steel competition blame game: <a href="https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&amp;objectid=12265951" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.nzherald.co.nz/business/news/article.cfm?c_id%3D3%26objectid%3D12265951&amp;source=gmail&amp;ust=1568854986526000&amp;usg=AFQjCNGP0_H2QKOeOOxxot9b9pZgBKit2Q" rel="noopener">Steel &amp; Tube vs Fletcher Building: Nobody winning as steel pricing war rages on</a></li>
</ul>
Australia
<ul>
<li>Residential construction lead indicator remains soft (Construction finance approvals,&nbsp;Jul.): -1.6% mom, -14.6% yoy (previous -2.2% mom, -8.6% yoy). Trend series -9.3% yoy.</li>
<li>House prices down in 2Q, albeit more recent data suggests the trend has turned (ABS capital cities, 2Q19): -0.7% qoq, -7.4% yoy (previous -3.0% qoq, -7.4% yoy) including Sydney -10% yoy, Melbourne -9%, Brisbane -3%, Adelaide flat, and Perth -4%.</li>
</ul>
International
<ul>
<li>US: Homebuilder confidence remains firmly positive (Sep.):&nbsp;68 (previous 67; positive &gt;50&gt; negative).</li>
<li>UK: Weak new construction orders (2Q19): Residential -3.9% qoq, -7.7% yoy (previous +1.2% qoq, -23.1% yoy). Non-residential -17.0% qoq, -3.2% yoy (previous +14.5% qoq, +26.1% yoy).</li>
<li>China: Healthy residential and office construction growth (Aug.): Total building starts +8.9% yoy (previous +9.5%) driven by residential +8.9% (previous +9.6%) and office +20.2% yoy (previous +21.6%). Business buildings -4.5% (previous -3.5%) continues to fall.</li>
</ul>
Matt Henry&nbsp;CFA
Director / Senior Analyst, Equities&nbsp;
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+64 (9) 368 0115
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0800 367 227
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+64 (9) 368 0092
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PO Box 97, Auckland 1140
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<a href="http://www.forsythbarr.co.nz/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=http://www.forsythbarr.co.nz&amp;source=gmail&amp;ust=1568854986526000&amp;usg=AFQjCNEcgiBGSu8FwmkW68fPnHz5aqgffw" rel="noopener">www.forsythbarr.co.nz</a>
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<td style="width: 114.4px;">Twitter:</td>
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<a href="http://twitter.com/forsythbarr" target="_blank" data-saferedirecturl="https://www.google.com/url?q=http://twitter.com/forsythbarr&amp;source=gmail&amp;ust=1568854986526000&amp;usg=AFQjCNFtm0JKuYtUiiMkU9kGZKtTeJZ6GA" rel="noopener">@forsythbarr</a>
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Building weekly
New Zealand

Signs lower rates are benefitting the house market (REINZ, Aug.): House sales up +5.2% mom, -6.1% yoy (previous +4.9% mom, +6.6% yoy). Whilst sales are down yoy, inventory is tight, particularly outside Auckland – new listings down -14% you in Auckland, and -10% elsewhere. Days to sell Auckland +2 yoy to 44 (vs long-term average 35), ex-Auckland +2 to 37 (vs. long-term average 42).&nbsp;House prices tick higher: +1.3% mom, +2.9% yoy (previous +0.2% mom, +1.5% yoy), with Auckland +1.3% mom, -1.5% yoy and ex-Auckland +1.5% mom, +6.8% yoy.
Tight house supply continues to reflected in strong rental growth (Aug.): 3m rolling average rents – Auckland +2.4% yoy, Wellington +6.5%, rest of North Island +6.6%, Canterbury +2.4% and rest of South Island +6.5%.
Net migration remains supportive (12 months to Jul.): +52.7k (previous +51.5k). Post measurement changes the exact short-term trends are unclear, however, there is no doubt the level remains elevated and supportive of demand.
Steel &amp; Tube looking to sell excess property:&nbsp;At its recent result STU said it was looking at selling three properties with a total market value of c.NZ$14-15m.&nbsp;Steel &amp; Tube still cashing up "surplus" properties offering a big Christchurch industrial for sale
He said, she said, steel competition blame game: Steel &amp; Tube vs Fletcher Building: Nobody winning as steel pricing war rages on

Australia

Residential construction lead indicator remains soft (Construction finance approvals,&nbsp;Jul.): -1.6% mom, -14.6% yoy (previous -2.2% mom, -8.6% yoy). Trend series -9.3% yoy.
House prices down in 2Q, albeit more recent data suggests the trend has turned (ABS capital cities, 2Q19): -0.7% qoq, -7.4% yoy (previous -3.0% qoq, -7.4% yoy) including Sydney -10% yoy, Melbourne -9%, Brisbane -3%, Adelaide flat, and Perth -4%.

International

US: Homebuilder confidence remains firmly positive (Sep.):&nbsp;68 (previous 67; positive &gt;50&gt; negative).
UK: Weak new construction orders (2Q19): Residential -3.9% qoq, -7.7% yoy (previous +1.2% qoq, -23.1% yoy). Non-residential -17.0% qoq, -3.2% yoy (previous +14.5% qoq, +26.1% yoy).
China: Healthy residential and office construction growth (Aug.): Total building starts +8.9% yoy (previous +9.5%) driven by residential +8.9% (previous +9.6%) and office +20.2% yoy (previous +21.6%). Business buildings -4.5% (previous -3.5%) continues to fall.

Matt Henry&nbsp;CFA
Director / Senior Analyst, Equities&nbsp;




T:


+64 (9) 368 0115




TF:


0800 367 227




F:


+64 (9) 368 0092




P:


PO Box 97, Auckland 1140








W:


www.forsythbarr.co.nz



Twitter:

@forsythbarr





Steel & Tube Holdings

Building Weekly