CEO INSIGHTS – Week Ending 26 July 2024

CrowdStrike Incident / Cyber Security Insurance

“We find 84 per cent of large corporations take out cyber insurance, there will be some covered and some won’t.” Gill Collins, Head of Cyber, Marsh McLennan Pacific

Copper & Lithium

“Many of you have heard me say for a long time, copper has moved from a cyclical metal that it had been in years past to one that's been driven more by episodic events.” Richard Adkerson, CEO, Freeport-McMoRan Inc [major global copper & gold miner]

“It looks like high-cost supply is coming out of the market, so no surprise there and it looks like the bulk of the supply is reducing to those major producers with a low-cost profile, such as Pilbara. As it relates to investment and new supply given the lower priced environment, it is likely to be more difficult for new projects to get funded.” Dale Henderson, CEO, Pilbara Minerals Ltd

Chinese Housing & Workforce

“The Chinese ceramics sector is still underperforming due to the subdued real estate market. In May, the Chinese Government announced US$41 billion to fund loans for state-owned companies to start buying excess property for conversion to subsidised housing for low and middle income earners” Market Statement, Iluka Resources Ltd

“The Chinese economy had previously been expected to return quickly to broad-based growth after the easing of COVID restrictions in January 2023. Instead, the recovery has been modest with no clear visibility on sustained recovery. In terms of employment markets, blue-collar employment has performed considerably better than the white-collar market” Market Statement, Seek Ltd

Childcare

“Increasing demand for ELC [early learning centre] places is renewing pressure on the supply of skilled ELC labour” Market Statement, Arena REIT Ltd

Semiconductors/Microchips

“With increasing chip complexity and system companies building their own silicon, these trends are creating tremendous tailwinds for our differentiated solutions.” Anirudh Devgan, CEO, Cadence Design Systems Inc [circuit board software company/peer to Altium Ltd]

Energy Transition

“The transition to electric cars is taking longer than we thought five years ago” Market Statement, Porsche SE

Consumer Finance & Circular Economy

“Our business remains well positioned to continue to benefit from a growing international focus on the importance of the circular economy and the repurposing of pre-owned goods, in conjunction with consumers experiencing increased cost of living pressures at a time when mainstream finance continues to become more difficult to access.” Sam Budiselik, CEO, Cash Converters Ltd

Air Traffic Control (ATC)

“Year-to-date, the number of flights across Europe is 5% below 2019 levels. And yet, we are suffering, as all other airlines due to repeated inexplicable ATC capacity restrictions. These can only arise from material understaffing or short staffing…They're blaming all sorts of things like adverse weather, et cetera, et cetera. But it is down to under staffing, and we are having our worst summer ever in terms of ATC delays and flight cancellations because as these delays roll through the day, we're having to cancel late evening like at curfew airports.” Michael O'Leary, CEO, Ryanair Holdings Plc

Residential Property & DIY

“BTR [Build-to-Rent] as a sector has been identified as a housing option that could become a significant asset class in Australia” Debby Blakey, CEO, Hesta Super

“Moving on to our Consumer Brands Group. Sales underperformed our expectations in a market that was softer than we anticipated…Inflation, depleted savings and household debt also continue to pressure consumers who currently appear to be spending their modest available discretionary dollars elsewhere. We understand where we are in this cycle and eventually expect to see an upturn in DIY demand.” Heidi Petz, CEO, The Sherwin-Williams Co [one of the world’s biggest paint companies]

Toys & Games

“We expect the toy industry to decline modestly in 2024, which is an improvement from our outlook at the start of the year. Beyond 2024, we believe trends will further improve and that the industry will return to growth and continue to grow over the long term.” Ynon Kreiz, CEO, Matell Inc

Debt Issuance & Credit Rating Agencies

“We think that the fourth quarter, in particular, I think it's going to be November and December is going to be much more muted in terms of issuance and that's due in part because a lot of the issuers have been guided by the banks to issue earlier in the year while the market conditions are favourable and to avoid any kind of election-related turbulence in the fourth quarter. Second, we've seen some pull forward from future years from the forward maturities. That's mostly 2025 and mostly spec-grade…” Robert Fauber, CEO, Moody’s Corporation

Global Consumer

“Firstly, overall, it'd be fair to say that the consumer sentiment in aggregate is actually pretty strong, pretty resilient.” James Quincey, CEO, The Coca-Cola Company

PCs & Accessories

“I think the top line is we're very bullish on mice and keyboards. That's the core of our business. That's where we started, and it's still a great business. We are not one-to-one correlated to PC refreshes, but it certainly can't hurt if people are buying new PCs…We've always been the human machine interface ever since the start of this company 40 years ago. And we can now really be the link between the human and the large language model via our mice and keyboards.” Johanna Faber, CEO, Logitech International S.A.s