Market & Portfolio Update - February 2021
World share markets rose a little further during February, continuing the gains they have seen as confidence in a gradual ‘re-opening’ grows. The vaccine roll-out was one of the contributing factors. At the end of February, around 3% of the world’s population has received at least one dose of a Covid-19 vaccine. Israel is leading the way with 92% of their population inoculated and the initial results are promising.
The Australian share market was one of the better performing markets due to it being made up of more of the ‘cyclical’ style sectors such as banks and resource companies.
The New Zealand share market lagged global markets by some way during February. This was mainly a result of ‘stock specific’ factors, with Fisher & Paykel Healthcare, a2 Milk and the big electricity generators giving back some of their earlier gains.
As highlighted in our article 'Are interest rates heading back up to ‘normal’?', the rise in economic confidence also increased (long run) expectations for interest rates from very low levels. This saw fixed interest investments give back some of their previous revaluation gains, although was also a sign of the more positive global outlook and reaffirms the value of diversifying across different types of investments.
The NZ share market had its first major IPO in some time, with My Food Bag listing in early March (although trading lower after listing). Although the company has become a household name, Booster did not buy shares in the IPO, viewing the price being asked as relatively expensive.
News alert March the 5th 2021: Three large earthquakes occurred off the coast of NZ. Civil Defence alerts buzzed cellphones around New Zealand warning of a possible tsunami on the East Coast. Updates in media and Civil Defence website were made known and Kiwis around the land in at risk areas responded to the threat.
This week the Government announced a suite of new policy with the intent to assist first home buyers into the market. This included tax changes for investors, bright-line extensions and increases to the cap on First Home Loans and First Home Grants.