CEO INSIGHTS – Week Ending 23 March 2018 By NAOS Asset Management

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“There’s no point pretending that technology isn’t going to affect jobs” Brian Hartzer, CEO, Westpac

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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Technology & Telecommunications

[Referring to 5G] “We should see tremendous improvement in speed and latency. I think with the fibre backhaul, you get very good latency” David Teoh, Executive Chairman, TPG Telecom

“While casual employment is more flexible than part-time or full-time employment, it is still subject to regulation that would be incompatible with the degree of flexibility that characterises the on-demand economy” Deliveroo Company Statement

Retail

“More stores will close if landlords don’t change up with the changed retail environment” Mark McInnes, CEO, Premier Investments

Domestic Economy

“There's no question you'll see a wage rise with a reduction in company tax” Andrew Forrest, Chairman, Fortescue Metals Group Ltd

“Generally, we are seeing an uptick in M&A. There is an increase in private equity looking to do public deals as well” Tony Damian, Australian Partner, Herbert Smith Freehills

“The TPP-11 [Trans-Pacific Partnership] will give Australian exporters access to markets worth $13.7 trillion. It will give our exporters preferential market access to Canada and Mexico, where that access did not previously exist, and exporters will have better market access to Japan” Steven Ciobo, Minister for Trade

Agriculture

[Referring to almond investment in Australia] “Money is coming from quite a wide range of people” Ross Skinner, CEO, Almond Board of Australia

Tourism

“Across Australasia, IHG [InterContinental Hotels Group] has its biggest ever pipeline of new hotel signings on record” Abhijay Sandilya, Senior Director, IHG

Trade Wars

“There are no winners” Chinese Premier, Li Keqiang

"The biggest concern is that the imposition of steel and aluminium tariffs by the United States could be the opening salvo of a more extended trade war, which could derail the global recovery” Jerome Powell, Chairperson, US Federal Reserve

“Our view is we have a very serious problem losing our intellectual property, which is the single biggest advantage of the US economy. We are losing that to China in ways that aren’t reflective of the underlying economics” Robert Lighthizer, US Trade Representative

Residential Housing Market

“Things are changing, and the market is not as good as it was, but it’s a very fair market” Damien Cooley, Cooley Auctions

“You would expect it to be fairly solid [residential property prices] before it maybe drifts down a bit” Lindsay Partridge, Managing Director, Brickworks

Commodities

“The Chinese will have most of the offtake of cobalt. They’re not going to sell batteries to the world, more than likely they’ll produce batteries in China and sell electric vehicles to the world,” Ivan Glasenberg, CEO, Glencore

Miscellaneous

“Athlete generated media is the fastest growing category in sports media globally” Kerry McCabe, PlayersVoice CEO

“They’re not currencies [cryptocurrencies]. They’re not stores of value.” Michele Bullock, Assistant Governor, RBA

[Referring to the Daigou channel] “It is also becoming increasingly sophisticated. In the past they may have gone to pharmacies or supermarkets to buy their products to resell to friends and family in China. Now they are going to specialist wholesalers or buying online through apps such as ours.” Livia Wang, Director, Access CN

"I think the level of confidence among buyers in our market is very strong." Herbert Appleroth, CEO, Ferrari Australasia

Thank you for reading.

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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