NAOS CEO Insights



September 13, 2019

CEO INSIGHTS – Week Ending 13 September 2019 By NAOS Asset Management

“The Australians are back in the market. Our worries of Australians not spending will cease to exist because they are buying homes. People realise that the interest rates are cheap. Also, the federal government and the Reserve Bank want people to spend. It’s terrific.” Harry Triguboff, CEO, Meriton

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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Climate Change

“I think the world is accepting and investing in the fact that climate change mitigation is needed.” Shemara Wikramanayake, CEO, Macquarie Group Ltd

Domestic Banking and Finance

“The banks have all turned small business into this cookie cutter criteria and they won’t lend money without property security.” David Gandolfo, President, CAFBA [Corporate and Asset Finance Brokers Association]

“Obviously for banks and insurance companies lower yields do have an impact on profit, we have to accept that, but beyond that it creates competitive differentials between some of the banks…The volume of low-cost deposits in our book is significantly lower than CBA’s, for example. So, if rates move lower it’s going to be less of an issue for us than it will be for the major banks.” Steve Johnstone, CEO, Suncorp Group Ltd 

Domestic Property

“The Australians are back in the market. Our worries of Australians not spending will cease to exist because they are buying homes. People realise that the interest rates are cheap. Also, the federal government and the Reserve Bank want people to spend. It’s terrific.” Harry Triguboff, CEO, Meriton


“Put simply, the real market value of the NBN is far, far less than what it cost to build.” Kevin Russell, CEO, Vocus Group Ltd

 “Because the NBN’s financial targets are based on recovering its costs to build, rather than recognising the real value of the network, prices are far higher than would be achievable in a market-led environment, and customers are paying for it — literally.” Kevin Russell, CEO, Vocus Group Ltd


“Some of the drivers of that slower [aluminum] demand were slowdown in China...specifically around transportation and the electrical grid. And then in the rest of the world, it’s a lot about automotive slowdown and transportation slowdown.” William Oplinger, CFO, Alcoa Corporation

Financial Markets, Investing & Saving

“We are in a world that is flush with cash and is underinvested.” Rob Kapito, President & Co-founder, BlackRock Inc

“Unfortunately, the prices [for private equity investments in Australia], because of competition, are kind of high here.” Urs Wietlisbach, Co-Founder, Partners Group [global private equity firm]

“If you think that Australia needs to do something, you can only imagine what many of the other countries around the globe need to do that don't have any sort of a plan [for increasing savings for retirement with longer life expectancy's] as Australia does.” Rob Kapito, President & Co-founder, BlackRock Inc

 Software and Technology

“We truly believe video is the new voice.” Eric Yuan, CEO, Zoom Video Communications Inc

“If you think of financial institutions, I don't think there's a single financial institution on the planet that has less than 100 security products. In ones that I talked to and interviewed very specifically on this, they're talking 500 security products. You've got to be nuts. How do you make 500 anything work? Test them. Validate them. Integrate them. Operationalize them. It's just fricking nuts. And we're getting less security. More security products, more security companies and less security. More breaches that are more expensive. So, I say it's just a broken industry in that sense.” Patrick Gelsinger, CEO, VMWare Inc [US listed Dell Computers subsidiary]

Global Consumer

“But the consumer continues to be strong, so the caution that we see is really on the commercial side. I actually wouldn’t, despite all the headlines again, call out anything on the consumer side [being negative].” Jeffrey Campbell, CFO, American Express Inc

“There is no question that we are in an attractive and growing category [entertainment] as consumers continue to increase spending on experiences...This trend and our success have attracted many more players in the space and the overall market today is quite fragmented and competitive.” Brian Jenkins, CEO, Dave & Busters [US listed entertainment & restaurant company]

 “22 million people live there [in Beijing] and 275 million people visit. And we have been able to substantiate the number... Orlando, by comparison, has 80 million visitors that come, whereas Beijing has 275 million. Now they are not all going to be income qualified, but it's certainly going to be more than enough of a pool for us to be quite successful.” Tim Williams, CEO, Universal Parks & Resorts

 US Economy

“So in relation to the consumer, look we know there's a lot of noise out there about where the economy is headed. But if you look at the consumer themselves, unemployment numbers are still incredibly good and favorable. The number of people working full time is the highest it's been since before the Great Recession. Wage growth is over 4% on a trailing 12-month basis. You look at all these things, the savings rates are actually still quite high. Gas prices are favorable. You just look and the list goes on and on and on. So I believe there's significant reason to believe that the economy is going to remain strong for the next 12 months, and that the consumers are going to remain strong.” Tom Chubb, CEO, Oxford Industries Inc [US listed global clothing conglomerate]




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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