NAOS CEO Insights

CEO INSIGHTS – Week Ending 23 August 2019 By NAOS Asset Management

August 23, 2019

“We're spending a lot of money on the [road] infrastructure in the cities, nothing is being spent in the country.” Roger Brown, Chairman, ARB Corporation Ltd

As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.  
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"Infrastructure outside the major cities isn't being maintained." Roger Brown, Chairman, ARB Corporation Ltd


"We expect the TV metro ad market to decline by low single digits and the BVOD [broadcast video on demand] market to grow more than 25 per cent." James Warburton, CEO, Seven West Media Ltd

Automotive & Aviation

"Carsales assumes a gradual recovery in Australian automotive market conditions across the year, supported by lower interest rates, an improved lending environment, a recovering property sector and recent tax changes." Carsales Ltd ASX Announcement

"Domestically, we’re seeing weakness in the price sensitive leisure market, but premium leisure demand is steady.” Alan Joyce, CEO, Qantas Airways Ltd

“Overall demand from our corporate customers is flat, with continued strength in the resources sector offsetting weaker demand from other industries, like financial services and telecommunications." Alan Joyce, CEO, Qantas Airways Ltd


“Salmon market conditions continued to be favourable with strong growth domestically" Mark Ryan, CEO, Tassal Group Ltd

Health Insurance

“Market conditions have been challenging for a range of reasons. There’s broad weakness in consumer discretionary spending, fierce competition for that spending and private health insurance has some issues around cost and affordability, especially out-of-pocket expenses for members." Mark Fitzgibbon, CEO, NIB Group Ltd

"[We] expect flat overall PHI [private health insurance] market volumes." Medibank ASX Announcement

Entertainment and Hotels

“Domestic demand started to taper off in mid-February and steadily worsened. March was worse, April worse, May was terrible. [But] June improved, July was better than June, and August is better than July." Matt Bekier, CEO, Star Entertainment

Mining & Resources

"Drilling activity moderated early in calendar 2019, principally due to concerns regarding the global macro environment, which had a short-term impact on capital expenditure and exploration plans." Bernie Ridgeway, CEO, Imdex Ltd

"The resources and energy sector in Australia is expected to provide a solid pipeline of opportunities over coming years as more favourable market conditions return. Project development activity has been increasing with a number of resources construction opportunities coming to market, particularly in the iron ore and lithium sectors. Prospects from further development in LNG production are also expected to be positive in the years to come." Monadelphous ASX Announcement

Domestic Retail

"Weaker consumer sentiment, credit tightening and falling house prices are expected to lead to a small decline in GWA’s addressable market in FY20, driven predominantly by the residential new build segment in multi residential and detached housing." GWA ASX Announcement

"We believe conditions should improve in 2020 and the business is in a strong market position to make the most of these improving conditions." Glen Robinson, CEO, Beacon Lighting Ltd


"The implementation of the new E-commerce laws in China resulted in daigou traders destocking inventory and reducing trading which has impacted business in the Australian market since the beginning of the year." Market Announcement Health & Happiness Group [owner of Swisse Vitamins]

Trade Wars

“It [trade wars] is not good, it is not a winning strategy for anyone, but it is not the end of the world." Shayne Elliot, CEO, ANZ Bank Ltd

Global Economy

"It’s not a recession. It’s just a slowing down of a growth rate that is faster than most years in the last decade or so." Brian Moynihan, CEO & Chairman, Bank of America Corporation

"When you’re the largest economy by about a third of any economy, if your economy is growing, that’s good for the rest of the world because of the consumption nature, the consumers and the drivers of our economy, the entrepreneurship and things. So, the fear, if the United States slows down, the rest of the world has a hard time making it without them."  Brian Moynihan, CEO & Chairman, Bank of America Corporation



Important information: This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. Certain economic, market or company information contained in this material may have been obtained from published sources prepared by third parties. Nothing contained herein should be construed as granting by implication or otherwise, any license or right to use such third party content without the written permission of the owner.
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