Retail Savings and Investments in New Zealand - (COVID-19) Impact Snapshot

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

New Zealand has been able to successfully contain the virus spread with strict lockdown measures and policies, with total confirmed cases of 1,516 and a death toll of just 22. While the crisis has caused the country’s economy to contract, it will gradually recover now that the lockdown restrictions have been largely removed, with the wealth industry set to revive.

This report focuses on the impact of the Coronavirus outbreak on the New Zealands economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts the publisher's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

• New Zealand retail savings and investments are forecast to contract by 3.7% over the course of 2020 as COVID-19 its taking its toll on the economy. While the performance of the stock market is on an upward trend as a result of the progressive easing of lockdown measures across the country, the ongoing loss of productivity coupled with a potential second wave of virus infections will continue to weigh heavily on demand for risk assets throughout the year. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 17.6% and 8.4% anticipated.
• Retail deposits and bond holdings are set to fare better than initially expected courtesy of a flight to safety away from risk assets. However, more pronounced declines in risk assets holdings are expected to result in a total retail holdings forecast for 2020 that is 7.2 percentage points (pp) lower than initially predicted before the onset of COVID-19.
• The effects on the different segments that make up the HNW market will be disproportionate. The financial services and investments sector, which is the largest contributor to New Zealand HNW wealth, has already taken a significant hit, with the S&P/NZX All Financials declining by 21.1% since the beginning of the year.
• The healthcare sector - the third-largest contributor to HNW wealth - has remained resilient, with the S&P/NZX All Health Care gaining 3.2% since the beginning of 2020. The hospitality and tourism sector has been the worst hit due to strict travel restrictions and the inevitable slump in demand among travelers both domestically as well as globally.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the New Zealands retail savings and investments industry.
• Understand the key market trends, challenges, and opportunities in the New Zealands retail savings and investments industry.
• Receive a comprehensive insight into the retail liquid asset holdings in New Zealand, including deposits, mutual funds, equities, and bonds.