New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Auckland Airport (AIA) is lodging an appeal with the High Court, together with Wellington and Christchurch airports, and separately via the NZ Airports Association, against the Commerce Commission's (ComCom) recent Input Methodologies (IM) decision.</li><li>Details of the appeals are not public, but given the interest and changes made by the ComCom through the IM review process last year in its assessment of the asset beta for airports, we expect this will be a key area of the appeals. </li><li>The current regulatory regime for airports is favourable for AIA, providing a high RAB (regulatory asset base) multiple (we currently assume ~2.0x) for its aeronautical assets. </li></ul>

Auckland Airport (AIA) is lodging an appeal with the High Court, together with Wellington and Christchurch airports, and separately via the NZ Airports Association, against the Commerce Commission's (ComCom) recent Input Methodologies (IM) decision.Details of the appeals are not public, but given the interest and changes made by the ComCom through the IM review process last year in its assessment of the asset beta for airports, we expect this will be a key area of the appeals. The current regulatory regime for airports is favourable for AIA, providing a high RAB (regulatory asset base) multiple (we currently assume ~2.0x) for its aeronautical assets. 

<ul><li>We expect Auckland Airport's (AIA) retail business to feature more prominently over the next 12 months, after taking a back seat through COVID and during the regulatory focus of 2023.</li><li>It's an important value driver for AIA, accounting for almost one third of NPAT and generating a very attractive return on capital.</li><li>In the decade prior to COVID retail income had grown strongly, a function of passenger (pax) growth, international departures space expansion, improving pax mix with growth in Chinese arrivals, improving concession yield and minimum annual guarantees (MAG), and the development of off-airport duty-free retail. </li></ul>

We expect Auckland Airport's (AIA) retail business to feature more prominently over the next 12 months, after taking a back seat through COVID and during the regulatory focus of 2023.It's an important value driver for AIA, accounting for almost one third of NPAT and generating a very attractive return on capital.In the decade prior to COVID retail income had grown strongly, a function of passenger (pax) growth, international departures space expansion, improving pax mix with growth in Chinese arrivals, improving concession yield and minimum annual guarantees (MAG), and the development of off-airport duty-free retail. 

Thematic (Sector/Industry)

<ul><li>A deteriorating economic backdrop is impacting demand for freight and passengers.</li><li>Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption.</li><li>The latter has softened demand across different transport modes. </li></ul>

A deteriorating economic backdrop is impacting demand for freight and passengers.Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption.The latter has softened demand across different transport modes. 

Transport Trends - Where's the Freight, Mate?

<ul><li>The Commerce Commission's (ComCom) ​​​final input methodologies (IMs) report provides a material aeronautical return uplift for Auckland Airport (AIA) compared to the draft report of June 2023.</li><li>There are four key positive implications for AIA. (1) Its incentive to continue to invest in its airport development programme has increased, meaning the prospect of higher capex for longer. </li><li>(2) The new IMs support another step-up in airport pricing for its next pricing period, PSE5 (FY28–FY32). </li></ul>

The Commerce Commission's (ComCom) ​​​final input methodologies (IMs) report provides a material aeronautical return uplift for Auckland Airport (AIA) compared to the draft report of June 2023.There are four key positive implications for AIA. (1) Its incentive to continue to invest in its airport development programme has increased, meaning the prospect of higher capex for longer. (2) The new IMs support another step-up in airport pricing for its next pricing period, PSE5 (FY28–FY32). 

Auckland Airport - ComCom U-Turn Provides Christmas Cheer

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gentrack-group-ltd" target="_blank" data-smartkarma-citation="entities:2752:1" rel="noopener">Gentrack (GTK NZ)</a> and <a href="https://www.smartkarma.com/entities/dorchester-pacific-ltd" target="_blank" data-smartkarma-citation="entities:1854:1" rel="noopener">Turners Automotive (TRA NZ)</a> will be added to the S&amp;P/NZX 50 Index while <a href="https://www.smartkarma.com/entities/synlait-milk-ltd" target="_blank" data-smartkarma-citation="entities:16298:1" rel="noopener">Synlait Milk (SML NZ)</a> and <a href="https://www.smartkarma.com/entities/pacific-edge-ltd" target="_blank" data-smartkarma-citation="entities:20261:1" rel="noopener">Pacific Edge (PEB NZ)</a> will be deleted.</li>
<li>There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.</li>
<li>The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.</li>
</ul>



Gentrack (GTK NZ) and Turners Automotive (TRA NZ) will be added to the S&amp;P/NZX 50 Index while Synlait Milk (SML NZ) and Pacific Edge (PEB NZ) will be deleted.
There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.
The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.


S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

New Zealand

Auckland International Airport Limited owns and operates the Auckland International Airport.  The Airport includes a single runway, an international terminal and two domestic terminals.  The Airport also has commercial facilities which includes airfreight operations, car rental services, commercial banking center and office buildings.

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Auckland Intl Airport (AIA NZ)

Auckland Airport - Reviewing the Merits

The current regulatory regime for airports is favourable for AIA, providing a high RAB (regulatory asset base) multiple (we currently assume ~2.0x)...

Forsyth Barr

Auckland Airport - Call of Duty Free

We expect Auckland Airport's (AIA) retail business to feature more prominently over the next 12 months, after taking a back seat through COVID and...

Forsyth Barr

Transport Trends - Where's the Freight, Mate?

Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption. The latter has softened...

Forsyth Barr

Auckland Airport - ComCom U-Turn Provides Christmas Cheer

The Commerce Commission's (ComCom) final input methodologies (IMs) report provides a material aeronautical return uplift for Auckland Airport...

Forsyth Barr

S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

As expected, Gentrack and Turners Auto will replace Synlait Milk and Pacific Edge in the NZX50 Index. The adds have jumped recently and there...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Auckland Airport - Reviewing the Merits

The current regulatory regime for airports is favourable for AIA, providing a high RAB (regulatory asset base) multiple (we currently assume ~2.0x)...

Forsyth Barr

Auckland Airport - Call of Duty Free

We expect Auckland Airport's (AIA) retail business to feature more prominently over the next 12 months, after taking a back seat through COVID and...

Forsyth Barr

Transport Trends - Where's the Freight, Mate?

Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption. The latter has softened...

Forsyth Barr

Auckland Airport - ComCom U-Turn Provides Christmas Cheer

The Commerce Commission's (ComCom) ​​​final input methodologies (IMs) report provides a material aeronautical return uplift for Auckland Airport...

Forsyth Barr

S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

As expected, Gentrack and Turners Auto will replace Synlait Milk and Pacific Edge in the NZX50 Index. The adds have jumped recently and there...

Brian Freitas

The Commerce Commission's (ComCom) final input methodologies (IMs) report provides a material aeronautical return uplift for Auckland Airport...