NAOS CEO Insights

CEO INSIGHTS – Week Ending 5 July 2019 By NAOS Asset Management

July 8, 2019

"The findings of our report refute any misconception that investing responsibly comes at a cost in term of performance." Simon O'Connor, CEO, Responsible Investment Association of Australia

CEO INSIGHTS – Week Ending 5 July 2019 By NAOS Asset Management

"The findings of our report refute any misconception that investing responsibly comes at a cost in term of performance."
Simon O'Connor, CEO, Responsible Investment Association of Australia

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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Finance

"We expect instalments to become a foundational method of payment at checkout for both domestic and cross-border commerce payment transactions.” Market Announcement, Visa Inc

"Policy stability and trying to find those policies and regulations that are impediments to business investment will count a lot more in the medium term for the strength of economic growth in Australia than whether or not an individual interest rate decision is made or not.” Phil Chronican, acting CEO, NAB

"We should not rely on monetary policy alone. One option is fiscal support, including spending on infrastructure." Dr Philip Lowe, Governor, RBA

Retail

"Like all major retailers we were paying a version of penalty rates, but it was not in line with the higher penalty rates now expected." Sarah Hunter, CEO, Officeworks

"We are driving sustainability at scale through recycled material in our aerosols, which is diverting 50 million pounds of waste from landfills each year. These are the kinds of steps and transparency that consumers expect today." Mark Parker, CEO, Nike Inc

"We have decided in certain markets to hold back with new openings. We believe that in certain markets, rents are higher than they should be." Karl-Johan Persson, CEO, H&M

Employment

"There has been little inroad into the spare capacity in the labour market recently, with the unemployment rate having risen slightly to 5.2 per cent." Dr Philip Lowe, Governor, RBA

"It's also apparent that people are changing where and how they work. Offices are looking more residential." Andrea Owen, CEO, Herman Miller Inc [Global Office Furniture Manufacturer]

Environmental, Social & Governance

"The findings of our report refute any misconception that investing responsibly comes at a cost in term of performance." Simon O'Connor, CEO, Responsible Investment Association of Australia

Domestic Tourism

"The amount of backpackers on the ground is not as strong as it used to be." Luke Trouchet, CEO, Apollo Tourism & Leisure Ltd

"The Sunshine Coast is one of the most exciting growth areas of Australia and the development of the new international airport will drive growth in the many industries that are expanding on the coast.” Terry Snow, Executive Chairman, Capital Airport Group

Automotive

"Over the past six months we have seen various conditions and circumstances which adversely affected the market.  These include a tightening of financial lending, environmental factors such as drought and flood, and a strongly contested federal election." Tony Weber, CEO, Federal Chamber of Automotive Industries (FCAI)

"We are now seeing the back end of lower new car sales from recession years in the prime parts replacement time frame. Essentially, the number of prime replacement aged vehicles is growing [in the US]." Selwyn Joffe, CEO, Motorcar Parts America

Technology

"You have to be prepared, within 10 years or less we will live in a world where every single thing will have an intelligent insight." Sonia Bonfiglioli, Chairwoman, Bonfiglioli [Italian Manufacturing Company]

"A digital revolution, if embraced, will lead to new jobs, new opportunities, new businesses, new skills and enable people in Australia to be more competitive and have access to worldwide markets.” Stephen Rue, CEO, National Broadband Network

"From a competition perspective, the NBN has been an abject failure, the cost of access is so high that you end up with very little margin, so it’s the larger players with deep pockets that can afford them. The (NBN Co) prices have pushed broadband into a premium product category, where value brands (like Dodo) can’t compete.” Kevin Russell, CEO, Vocus

Domestic Real-estate

"State budgets in Queensland, Victoria and South Australia have hit the property industry with arbitrary and poorly-designed tax increases which will hurt investment and job creation, and risk undermining the current sentiment turnaround.” Ken Morrison, CEO, The Property Council

"Certainly, it seems safe to say that the worst of the house price declines are well and truly behind us.” Ken Morrison, CEO, The Property Council

"Prices are starting to improve too. They hit rock bottom and they are going up again, but still they are cheap." Harry Triguboff, CEO, Meriton Group


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.