WELLINGTON (Reuters) – New Zealand’s success in curbing the coronavirus has given it a “safe haven” advantage, allowing the country to be open for investment, Prime Minister Jacinda Ardern said on Wednesday.
With just two new infections this week, New Zealand has held down community spread of the virus after a strict lockdown brought social and economic activity to a standstill for more than a month.
Economic activity is slowly resuming, though many social curbs remain, and Ardern will decide next week on further easing.
“We are ready to welcome quality investments and offer a safe place for operations in both the health and business sense,” Ardern told a news conference.
“By tackling the virus we have positioned our economy to be able to rebuild ahead of many others globally…that is our safe haven strategic advantage.”
The comments came after Microsoft Corp announced plans to set up its first datacentre region in New Zealand.
Ardern welcomed the move, saying New Zealand was open to similar strategic investments, with her government making more efforts to spread the word.
“New Zealand’s brand has always been that we are a sound, high-quality and reliable place to invest,” she added. “I would like to think our response to this health crisis only further underpins that approach.”
Ardern has received praise globally for her leadership amid the pandemic, with news reports and social media spotlighting people’s desire to move to New Zealand while the rest of the world battles the virus.
But she faces the tough task of rebooting the $200-billion economy dependent on trade and tourism, with growth expected to slow significantly, costing hundreds of thousands of jobs.
New Zealand has always drawn ultra-rich investors keen to enjoy the Pacific island nation’s unspoilt environment and scenic landscape.
James Cameron, the Canadian director of “Avatar” and “Titanic”, has bought farmland near the capital, Wellington, while American tech billionaire Peter Thiel has snapped up several hundred acres of the South Island with views of snow-capped mountains.
But in 2018, Ardern’s government banned many foreigners from buying property, blaming overseas speculators for driving up housing prices.
(Interactive graphic tracking global spread of coronavirus: open https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html in an external browser.)
(Reporting by Praveen Menon; Editing by Clarence Fernandez)
A case study in how not to invest in bank stocks – The Globe and Mail
I have two investments I just don’t understand: BK and BK.PR.A. They were purchased by a financial adviser I have since parted ways with. I know they invest in bank stocks, but I can’t understand why BK in particular is doing so badly. I feel that these shares are a special type of investment that is more complicated than most.
More complicated than most? That’s an understatement. Your adviser shouldn’t have recommended a product you don’t understand. What’s more, as you’ll see, the adviser’s recommendation to buy BK and BK.PR.A together makes no sense from a financial standpoint – except for the fat commission he or she likely pocketed in the process.
BK and BK.PR.A are two different classes of shares issued by Canadian Banc Corp., an investment vehicle known as a “split share” corporation. Canadian Banc Corp. holds a portfolio of the six biggest Canadian bank stocks, and while BK and BK.PR.A both provide exposure to those underlying stocks, they do so in different ways and with dramatically different results.
BK.PR.A, the preferred shares, are relatively stable. They don’t participate in the ups and downs of the underlying banks, but they pay a fairly secure dividend that is funded by the dividends from those shares. The preferreds also get first claim on the capital of the underlying portfolio up to the preferred’s issue price of $10 a share.
Adding yet another layer of protection, although BK.PR.A’s dividend is variable because it is tied to the prime lending rate, BK.PR.A’s yield is never allowed to drop below 5 per cent, as calculated on the $10 issue price. (BK.PR.A has been trading slightly higher than $10 recently, so the yield based on the market price is currently a bit below 5 per cent.) Reflecting its conservative characteristics, BK.PR.A has produced steady returns over the years, and is a suitable choice for an income-seeking investor.
BK, the class A shares, are a different story. Essentially, the class A shares (also known as capital shares) are entitled to all of the value in Canadian Banc Corp.’s bank stock portfolio after the preferreds’ dividend and fixed capital requirements are satisfied. This means the class A shares are effectively a leveraged bet on the underlying stocks. If bank stocks rise, the class A shares will rise even more. If bank stocks fall, the class A shares will suffer an even bigger loss.
The sell-off triggered by the novel coronavirus pandemic is a great illustration. From Feb. 21 through May 28, BK shares plunged about 37 per cent. That’s far worse than the drop of about 22 per cent for the BMO Equal Weight Banks Index ETF (ZEB), a fund that holds the same six banks – but with no leverage, and lower costs.
BK also pays a dividend, but it’s anything but stable. The dividend is reset monthly to yield 10 per cent based on BK’s average market price over a designated three-day period, which means the dollar amount of the dividend will rise in good times, and fall in bad times.
When markets get really ugly, however, BK’s dividend can disappear altogether. Even though none of the underlying banks has cut its dividend, BK suspended its payout in March after the net asset value per unit of Canadian Banc Corp. fell below the threshold of $15 that triggers a cessation of dividends on the class A shares. BK has since reinstated its dividend, but the monthly amount is about 40 per cent lower than it was a year ago.
You may be wondering how BK can pay a 10-per-cent dividend when the preferred shares are already yielding 5 per cent. According to the prospectus, “to supplement the dividends received on the portfolio and to reduce risk, the company will from time to time write covered call options in respect of some or all of the common shares in the portfolio.”
But many split share corporations also resort to selling stocks in the underlying portfolio to generate cash required to pay dividends on their class A shares, said James Hymas, president of Hymas Investment Management. “It is my belief that, if people understood class A split shares, they wouldn’t buy them.”
With the rebound in bank stocks this week, BK has recovered some of its hefty losses. But its total return, including dividends, for the five years through May 27 was still negative 1.2 per cent on annualized basis, according to Bloomberg. Over the same period, ZEB posted a positive annualized total return of 4.6 per cent. Clearly, an investor who wanted exposure to bank stocks would have been better off buying a low-cost bank ETF instead of a leveraged product such as BK.
What’s more, your adviser should have known that, although BK and BK.PR.A have different characteristics on their own, they are complementary pieces of the same underlying portfolio. When you put them together you’re essentially buying a portfolio of bank stocks – just in two different wrappers that add unnecessary layers of complexity and fees. Canadian Banc Corp.’s management expense ratio of 1.35 per cent is more than double ZEB’s MER of 0.62 per cent.
“Your reader was given really stupid advice by the adviser, because when you own the class A shares and preferred shares in equal proportions, all you own is a fund with a lot of bells and whistles that owns bank stocks,” Mr. Hymas said. “You can do that a whole lot easier by buying an ETF that owns bank stocks. And it’s much cheaper.”
E-mail your questions to firstname.lastname@example.org. I’m not able to respond personally to e-mails but I choose certain questions to answer in my column.
Special to The Globe and Mail
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The best investment every digital brand can make during the COVID-19 pandemic – TechCrunch
Intuitively, stores that sell online should be making a killing during the COVID-19 pandemic. After all, everyone is stuck at home — and understandably more willing to shop online instead of at a traditional retailer to avoid putting themselves and others at medical risk. But the truth is, most smaller online stores have seen better days.
The primary challenge is that smaller shops often don’t have the logistics networks that companies like Amazon do. Consequently, they’re seeing substantially delayed delivery timelines, especially if they ship internationally. Customers obviously aren’t thrilled about that reality. And in many cases, they’re requesting refunds at a staggering rate.
I saw this play out firsthand in April. At that point, my stores were down 20% or in some cases even 30% in revenue. Needless to say, my team was freaking out. But there’s one thing we did that helped us increase our revenue over 200% since the pandemic, decrease refund requests and even strengthen our existing customer relationships.
We implemented a 24-hour live chat in all of our stores. Here’s why it worked for us and why every digital brand should be doing it too.
Avoid the common ‘unreachability’ frustration
When I started my first online store in 2006, challenges that bogged my team down often meant that my team’s first priority became resolving those challenges so that we could serve our customers faster. But admittedly, when these challenges came up, it became more difficult to balance communicating with our customers and resolving the issues that prevented us from fulfilling their orders quickly.
COVID-19's Impact on Telecoms Worldwide, 2020 – Macro Level Impact, CapEx Investment, Supply Chain, Enterprise Demand, Green Shoots – GlobeNewswire
Dublin, May 29, 2020 (GLOBE NEWSWIRE) — The “Impact of COVID-19 on Telecoms” report has been added to ResearchAndMarkets.com’s offering.
COVID-19 has massively disrupted businesses in a short period of time. The lost economic output measured in GDP worldwide could be as high as USD 12 Trillion
China was the first country affected and industrial production fell 13.5% in the first two months of the year according to China National Bureau of Statistics. The United States just passed a $2.2 Trillion relief bill. Unemployment claims filed in the U.S. for the week ending March 20, 2019 were 3.3 Million, four times the worst weekly data reported in the 2009 financial collapse.
The world’s economy could grow at its slowest rate since 2009 this year due to the coronavirus outbreak, according to the Organization for Economic Cooperation and Development (OECD). However, we should recognize that the events that led to this differ dramatically from 2009. COVID-19 is akin to the Spanish Flu but the economy today is more globally connected unlike 1917.
Current OECD estimates for global growth are 1.5%. The speed of COVID-19 has created an urgency for policy makers to act quickly to protect the public and avoid overwhelming hospitals. Business leaders will be equally challenged to quickly prepare for business interruption. This includes rapid changes in workforce logistics to encourage physical distancing, consumer demand shock, and supply chain disruptions.
Expect both forecasted GDP and CAPEX models to be frequently revised downward based on:
- The infection rates of COVID-19 and ability of governments to bend the curve
- Extent and duration of governments to lift lockdowns around the world
- The effectiveness of governments in financially backing the key segments of the economy most impacted by extreme falloff in demand imposed by government shut down orders
The publisher believes that there will be changes to the communications industry, as a result of COVID-19.
Face to face meetings, conferences and office workspaces will not disappear. However, COVID-19 will accelerate trends in remote/distributed work, virtual meetings and electronic collaboration. In essence, electronic collaboration will substitute for some of the spending historically in travel and hospitality. As a result, the shift toward widely available broadband, the shift of enterprise workloads to cloud and SaaS and the importance of broadband wireless (5G) will gain extra importance. The publisher thinks we will see a shift of 5-10% of people will change their behaviour to primarily work remotely. Predominantly this will be about a change in management behaviour and the development of trust of in distributed working.
The telecommunication sector will be moderately impacted by COVID-19.
Some CSPs will increase capital spending to support increases in broadband access driven by consumer demand. Data collected by Nokia Deepfield demonstrates that the network has held up far better under this enormous shift in traffic origination than might have been expected. However, this explosion in bandwidth demand has exhausted the overhead built into the network to guarantee reliability.
The post COVID-19 era will fundamentally change work force behavior.
More employers will enact policies to encourage remote work practices in the future. Some suppliers will experience supply chain disruptions, but we think for the most part this will not be serious. Most suppliers implemented risk mitigation strategies ahead of COVID-19 to gain more control of key components related to infrastructure equipment.
In this short primer, the publisher attempts to set the scene for how the disruption from COVID-19 will impact telecoms. We recognize that at this time everybody’s focus should be on keeping healthy, acting on clear factual information and ensuring that we have the basics of life. Telecoms will, for now, be a key enabler/foundation for all three of these. However, in the long term the current emergency is both a challenge and an opportunity to our industry. Our intent in producing this paper is to allow us to rise to the challenges and to maximize the opportunities.
Key Topics Covered
1. EXECUTIVE SUMMARY
2. MACRO LEVEL IMPACT
3. CAPEX INVESTMENT
- Policy and QoS in the Access Network
- Last Mile Investment
4. SUPPLY CHAIN
5. ENTERPRISE DEMAND
6. GREEN SHOOTS
- Working from Home (WFH)
- Health Monitoring
For more information about this report visit https://www.researchandmarkets.com/r/k6y9tf
Research and Markets also offers Custom Research services providing focused, comprehensive and tailored research.
CONTACT: ResearchAndMarkets.com Laura Wood, Senior Press Manager email@example.com For E.S.T Office Hours Call 1-917-300-0470 For U.S./CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900
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