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.

Thematic (Sector/Industry)

<ul><li>Whilst 2024 was one the costliest years globally for reinsurance companies, in NZ, unusually benign weather provided a favourable backdrop for the local general insurance industry.</li><li>This saw Tower (TWR: unrated) deliver a record FY24 result for the year to September 2024.</li><li>Looking toward 2025, we are expecting a more normalised period for the industry, with the insurance rate cycle cooling, greater focus on customer numbers, new products, investment returns coming off their peak, and an ongoing push to reduce costs. </li></ul>

Whilst 2024 was one the costliest years globally for reinsurance companies, in NZ, unusually benign weather provided a favourable backdrop for the local general insurance industry.This saw Tower (TWR: unrated) deliver a record FY24 result for the year to September 2024.Looking toward 2025, we are expecting a more normalised period for the industry, with the insurance rate cycle cooling, greater focus on customer numbers, new products, investment returns coming off their peak, and an ongoing push to reduce costs. 

Forsyth Barr General Insurance Digest - Edition 10 — Australasian Insurers Outperform

<ul><li>The National Institute of Water and Atmospheric Research (NIWA) released its outlook for October to December 2023 on 29 September 2023.</li><li>As part of its outlook, NIWA declared that El Niño—characterised by 'stronger or more frequent winds from the west in the summer'—had officially arrived.</li><li>El Niño generally brings warmer temperatures and stronger winds across the country, with below–average rainfall in the north and east of the North Island and above–average rainfall in the west of the South Island. </li></ul>

The National Institute of Water and Atmospheric Research (NIWA) released its outlook for October to December 2023 on 29 September 2023.As part of its outlook, NIWA declared that El Niño—characterised by 'stronger or more frequent winds from the west in the summer'—had officially arrived.El Niño generally brings warmer temperatures and stronger winds across the country, with below–average rainfall in the north and east of the North Island and above–average rainfall in the west of the South Island. 

Forsyth Barr General Insurance Digest - Edition 5—El Niño An Insurers Amigo?

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/clearview-wealth-ltd" target="_blank" data-smartkarma-citation="entities:19733:1" rel="noopener">Clearview Wealth (CVW AU)</a> IE considers <a href="https://www.smartkarma.com/entities/zurich-insurance-group-ag-6200ef7e-59a6-4d82-87df-6dfcaec68274" target="_blank" data-smartkarma-citation="entities:27910:1" rel="noopener">Zurich Insurance Group (ZURN SW)</a>’s scheme offer of A$0.65 fair and reasonable, as it falls within its valuation range of A$0.625 to A$0.764.</li>
<li>The offer is arguably light, as the implied P/EV multiple is at a discount relative to precedent transactions and peers. </li>
<li>However, the scheme vote is low risk due to Crescent Capital’s support. At the last close and for a 20 August payment, the gross/annualised spread is 1.6%/9.6%. </li>
</ul>


The Clearview Wealth (CVW AU) IE considers Zurich Insurance Group (ZURN SW)’s scheme offer of A$0.65 fair and reasonable, as it falls within its valuation range of A$0.625 to A$0.764.
The offer is arguably light, as the implied P/EV multiple is at a discount relative to precedent transactions and peers. 
However, the scheme vote is low risk due to Crescent Capital’s support. At the last close and for a 20 August payment, the gross/annualised spread is 1.6%/9.6%. 


ClearView Wealth (CVW AU): Scheme Vote on 27 July

Equity Bottom-Up

<ul><li>Tower (TWR) has announced a white-label distribution partnership with Westpac NZ (WBC) to underwrite house, contents, motor, and landlord policies from 1 July 2026.</li><li>Management indicates the partnership contributes to its FY27 GWP growth ambition of +10% to +15%.</li><li>Our blended target price lifts +4% to NZ$2.10, on a reduced discount to peers as quality grows.</li></ul>

Tower (TWR) has announced a white-label distribution partnership with Westpac NZ (WBC) to underwrite house, contents, motor, and landlord policies from 1 July 2026.Management indicates the partnership contributes to its FY27 GWP growth ambition of +10% to +15%.Our blended target price lifts +4% to NZ$2.10, on a reduced discount to peers as quality grows.

Tower Limited Westpac Partnership Supports FY27 Growth

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/arvida-group-ltd" target="_blank" data-smartkarma-citation="entities:14485:1" rel="noopener">Arvida (ARV NZ)</a> will be deleted from the S&amp;P/NZX 50 Index following its acquisition by Stonepeak Alps BidCo. <a href="https://www.smartkarma.com/entities/tower-ltd" target="_blank" data-smartkarma-citation="entities:12173:1" rel="noopener">Tower Ltd (TWR NZ)</a> will be added to the index.</li>
<li>Passive NZX50 Index trackers will need to buy nearly 18m shares of <a href="https://www.smartkarma.com/entities/tower-ltd" target="_blank" data-smartkarma-citation="entities:12173:1" rel="noopener">Tower Ltd (TWR NZ)</a> - that is over 26 days of ADV.</li>
<li>There has been a lot of positioning in <a href="https://www.smartkarma.com/entities/tower-ltd" target="_blank" data-smartkarma-citation="entities:12173:1" rel="noopener">Tower Ltd (TWR NZ)</a> since Stonepeak's offer for <a href="https://www.smartkarma.com/entities/arvida-group-ltd" target="_blank" data-smartkarma-citation="entities:14485:1" rel="noopener">Arvida (ARV NZ)</a>. There should be enough supply for the passive trackers. </li>
</ul>



Arvida (ARV NZ) will be deleted from the S&amp;P/NZX 50 Index following its acquisition by Stonepeak Alps BidCo. Tower Ltd (TWR NZ) will be added to the index.
Passive NZX50 Index trackers will need to buy nearly 18m shares of Tower Ltd (TWR NZ) - that is over 26 days of ADV.
There has been a lot of positioning in Tower Ltd (TWR NZ) since Stonepeak's offer for Arvida (ARV NZ). There should be enough supply for the passive trackers. 


S&P/NZX 50 Index Rebalance: Tower (TWR) Replaces Arvida (ARV)

New Zealand

TOWER Limited provides risk insurance and wealth management products and services. The Company operates in general insurance, health & life insurance, and investments and funds management.

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Tower Ltd (TWR NZ)

Forsyth Barr General Insurance Digest - Edition 10 — Australasian Insurers Outperform

Whilst 2024 was one the costliest years globally for reinsurance companies, in NZ, unusually benign weather provided a favourable backdrop for the...

Forsyth Barr

Forsyth Barr General Insurance Digest - Edition 5—El Niño An Insurers Amigo?

The National Institute of Water and Atmospheric Research (NIWA) released its outlook for October to December 2023 on 29 September 2023.

Forsyth Barr

ClearView Wealth (CVW AU): Scheme Vote on 27 July

The offer is arguably light, as the implied P/EV multiple is at a discount relative to precedent transactions and peers. However, the scheme vote...

Arun George

Tower Limited Westpac Partnership Supports FY27 Growth

Tower (TWR) has announced a white-label distribution partnership with Westpac NZ (WBC) to underwrite house, contents, motor, and landlord policies...

Forsyth Barr

S&P/NZX 50 Index Rebalance: Tower (TWR) Replaces Arvida (ARV)

Tower replaces Arvida in the NZX50 Index at the close on 21 Oct. Passives will need to buy a lot in Tower but there has been a lot of positioning...

Brian Freitas

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