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AMP Capital tells tale of two recoveries

Clear evidence of the gap between economic projections and commercial reality faced by businesses was outlined in stark form by AMP Capital.The country's largest fund manager this afternoon released its latest quarterly results and they reflect the sizabl

Rob Hosking
Tue, 20 Apr 2010

Clear evidence of the gap between economic projections and commercial reality faced by businesses was outlined in stark form by AMP Capital.

The country’s largest fund manager this afternoon released its latest quarterly results and they reflect the sizable turnaround in the economy which has happened over the past year.

“We’re in the fourth quarter of recovery already,” strategist Jason Wong pointed out in his briefing.

“We expect 3-4% growth in GDP over the next 18 months to two years. There are signs now that the recovery has some gusts – it’s not just an inventory re-stocking and monetary and fiscal stimulus.”

So at the “macro” level the picture is pretty good.

At the New Zealand company level though the company’s head of New Zealand equities, Guy Eliffe, is a little more cautious.

While acknowledging the recovery is real enough, “we’re still waiting for some evidence of the strength of the recovery at company level. Its still pretty patchy.”

Some firms “appear to have got a bit ahead of themselves…they’ve got some good results but the market has moved a little ahead of the fundamentals.”

He emphasised the growth areas he sees as being companies in New Zealand which are exposed to industrial growth internationally: Nuplex and Skellerup, along with Fletcher Healthcare, are firms he singled out.

As for whether AMP Capital would be interested if Fonterra were able to persuade its farmer shareholders to open up for outside investment, Mr Elliffe said “absolutely.”

“It’s a great global business and we’re very constructive about it…we’re definitely in the camp that say s it is liquid gold.”

Rob Hosking
Tue, 20 Apr 2010
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AMP Capital tells tale of two recoveries
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