CEO INSIGHTS – Week Ending 16 June 2023

“When you go before the GFC, real estate was part of the alternative asset classes and only over the last 10, 12, 13 years, it developed to a uniquely defined asset class with very fast rising allocations to that asset class. And if you think that this is over because of the current turmoil, I can assure you, it's not over. We see it already again in Asia where allocations to real estate are rising again” Christian Ulbrich, CEO, Jones Lang LaSalle Inc

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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Corporate Spending

“The three major trends of green, digital, and connective [assets] are the areas where huge amounts of funds are flowing in on a global basis that would bring about substantial growth opportunities for Hitachi” Keiji Kojima, CEO, Hitachi Group

Inflation & Deflation

“Our margins are improving because we’re selling more pizzas and because food costs, which really skyrocketed last year, are coming back down, with cheese, wheat and some of our proteins moving into a better space” Don Meij, CEO, Domino’s Pizza Enterprises Ltd

“Now, as the heat comes out of many commodities and input prices ease, farmers are adjusting their outlook in response to normalisation of economic conditions” Marcel van Doremaele, CEO, Rabobank Country Banking Australia

Infrastructure

“The renewables won’t be built further until the transmission [upgraded poles & wires] is” Frank Calabria, CEO, Origin Energy Ltd

Consumer Staples

“We see stable and good positive trends better than pre-COVID times in the Australia and the South Pacific markets” Mukul Deoras, President, Colgate-Palmolive Asia Pacific

“Now, if I look at the dairy landscape around the world…the major dairy producing countries are still down on volume. And so there isn't this overcapacity of solids coming off the farms. What we're seeing though is the consumer sentiment has turned somewhat negative” Lino Saputo, CEO, Saputo Inc

Healthcare

“Sleep apnoea is a condition affecting nearly 1 billion patients around the world” Robert Douglas, COO, ResMed Inc

Movies & Out of Home Spending

“Studios have abandoned the failed day-and-date streaming distribution experiment and recommitted to exclusive theatrical releases” Richard Gelfond, CEO, IMAX Corp

“The impact on trading conditions of successive interest rate rises, together with general inflationary pressures, has become more apparent in H2. We expect these factors will continue to influence the domestic trading environment for the foreseeable future” Market Statement, Retail Food Group Limited

Cryptocurrency & Financial Markets

“I think the whole cryptocurrency is starting to evolve that world into a couple of currencies [Bitcoin & Ether]. And this is kind of what we thought was going to happen all along... So I think that's where the market is shaping up to” Terrence Duffy, CEO, CME Group [world’s leading derivatives exchange]

“If you look at the index industry, the barrier to entry is exceptionally low. There are so many smart people, quantitative backgrounds who can come up with a spreadsheet and come up with an opportunity. But what differentiates and creates a marketplace? It's pretty simple, it's trust” Daniel Draper, CEO, S&P Dow Jones Indices

Technology

“Real estate has been relatively late to the tech party, but it's coming at a very, very fast pace. And as you can imagine, buildings are a massive amount of data collection” Christian Ulbrich, CEO, Jones Lang LaSalle Inc

Commercial Property

“When you go before the GFC, real estate was part of the alternative asset classes and only over the last 10, 12, 13 years, it developed to a uniquely defined asset class with very fast rising allocations to that asset class. And if you think that this is over because of the current turmoil, I can assure you, it's not over. We see it already again in Asia where allocations to real estate are rising again” Christian Ulbrich, CEO, Jones Lang LaSalle Inc

Tax & Accounting

“The industry this year [small business tax] was softer than anyone anticipated” Jeffrey Jones, CEO, H&R Block Inc

Insurance

“The returns have been pretty challenging in our industry for the last couple of years” Nick Hawkins, CEO, IAG

Macroeconomic

“I think there's so much uncertainty in the world. I don't see that going away” Terrence Duffy, CEO, CME Group [world’s leading derivatives exchange]

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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. It does not constitute an offer to purchase any security or financial product or service referred to herein. It does not take into account the investment objectives, financial situation or needs of any particular investor. Before making an investment decision, investors should consider obtaining professional investment advice that is tailored to their specific circumstances. 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.