iPredict: Shearer wins Super Thursday

Press Release – iPredict

New Zealand Labour’s David Shearer wins Super Thursday speeches, and forecast to govern without needing NZ First · Fonterra payout forecasts plummet · NZ Police funding forecast to be increased by 2.8% in May Budget · Queensland Labor on the …PREDICT LTD


16 March 2012



Key Points:

New Zealand Labour’s David Shearer wins Super Thursday speeches, and forecast to govern without needing NZ First

Fonterra payout forecasts plummet

NZ Police funding forecast to be increased by 2.8% in May Budget

Queensland Labor on the way out next weekend

Wen Jinbao expected to step down as Chinese Premier by the end of the year

Two states each for Romney and Santorum expected in upcoming US Republican races

New bin for glass collection expected in Auckland before 2014

Pengxin’s Crafar bid for Crafar Farms unlikely to succeed before 2 June; more stock to be launched

Economic stocks extended to end of 2013

Hot Topics

The 6000 traders on New Zealand’s online predictions market, iPredict, have spoken. In heavy trading, Labour’s predicted vote share has surged 2.7 points to a record 37.8%, while National’s predicted vote-share has fallen 0.5 points to just 40.1%. This comes after Thursday’s major speeches by both party leaders. Once the clear coalition partners of ACT and the Greens are factored in, the Labour/Green coalition would have 59 MPs against National/ACT’s 51 MPs, meaning Labour would easily be able to govern with its choice of the Mana, Maori, or NZ First parties.

In Queensland, the Labor Party is out, with the Liberal Nationals expected to win 47% of first preferences and overwhelmingly favoured to form the next state government.

In the United States, Mitt Romney is expected to win Puerto Rico and Illinois, while Rick Santorum is expected to Win Missouri and Louisiana. However, iPredict continues to forecast that Barack Obama will be re-elected President in November.

Back in New Zealand, the Police budget is expected to be increased by 2.8% in this year’s Budget, while Aucklanders should expect a new bin for glass will be announced by the Auckland Council before 2014. Pengxin’s bid for Crafar Farms is not expected to become unconditional until June at the earliest, and the 2011/12 Fonterra payout forecast has slipped to just $6.86 per kilogram of milksolids, while the payout for 2012/13 has fallen to $6.76.

A number of new economic contracts have been launched this week, extending the Inflation, GDP, Current Account Deficit, and Unemployment contracts out to the end of 2013.

New Zealand Economic Forecasts

New stock released this week sees the prediction market expand its selection of New Zealand economic contracts. The inflation, GDP, current account deficit, and unemployment contracts have all been extended out to December 2013. iPredict will report on them next week when traders have had the chance to inform the market.

Short-term New Zealand growth prospects have improved this week, with growth expected to be 0.7% for the December 2011 quarter (up from 0.6% last week), 0.5% for the March 2012 quarter and now 0.6% for the June 2012 quarter (up from 0.5% last week).

Forecast unemployment is unchanged this week, with the market still predicting unemployment of 6.4% for the March 2012 quarter and 6.3% for the June 2012 quarter.

Inflationary expectations have remained steady over the past week. Inflation is forecast to be 1.6% for the March 2012 quarter, 1.5% for the June 2012 quarter and 1.7% for the September 2012 quarter.

91 unleaded petrol is expected to cost $2.19 per litre at the end of March, falling to $2.17 per litre at the end of April and increasing to $2.23 per litre at the end of May.

The Reserve Bank of New Zealand continues to be expected to hold off increasing the Official Cash Rate until December 2012 at the earliest.

With Fonterra announcing lower expectations for milk solids before retentions, the 2011/12 Fonterra payout is now expected to be $6.86 per kilogram, down 13c over the week. The forecast payout for 2012/13 has slipped 24c to $6.76, while forecast 2013/14 and 2014/15 payouts have remained steady at $7.42 and $7.46 respectively.

Current account deficit expectations are 3.82% of GDP to December 2011, down 0.24 points on last week, and 4.27% to March 2012, steady on last week.

International Economic Forecasts

World growth expectations remain steady at 3.09% for the 2012 year.

There is a 31% probability that at least one Euro member will depart the single currency in 2012.

There continues to be a 40% probability the US Senate will formally approve a resolution of ratification of the Trans Pacific Partnership by July 2015.

International Politics

In Australia, iPredict traders forecast that Prime Minister Julia Gillard will remain leader of the Labor Party (58% probability) until the next federal election which must be held by 30 November 2013.

At the election, first preferences are forecast to be: Labor 33.9% (up from 32.5% last week), Liberal 31.0% (down from 38.5%), Greens 11.2% (up from 9.6%), Queensland Liberal National 9.4% (up from 8.3%), Australian National 42% and Family First 4.2%. On a two-party preferred basis, the Coalition is forecast to win 51.7% of the vote and Labor 483%, and the Coalition has a 74% probability of forming the next Federal Government (steady compared with last week).

In Queensland, which goes to the polls on 24 March, opening positions are: Liberal National 47.0%, Labor 30.0%, The Greens 9.0% and all others 14.0%. There is a 94% probability Liberal National will win the election (down from 95% probability last week) and a 70% probability its leader Campbell Newman will enter Parliament via the Ashgrove seat, down from 77% probability last week.

In China, Wen Jinbao no longer expected to remain the Premier of the People’s Republic of China until 1 January 2013. Yang Jiechi is expected to remain Minister of Foreign Affairs and Chen Deming to remain Commerce and Trade Minister. However, Zhou Xiaochuan is expected to be replaced as Governor of the People’s Bank of China by year’s end, as is Xie Xuren as Minister of Finance.

On the back of releasing Spanish radio ads in Puerto Rico, Republican candidate Mitt Romney is expected to pick up the state, Romney is also expected to pick up the Illinois vote. While Rick Santorum is expected to win Missouri and Louisiana. Overall, Romney has an 89% chance of being the Republican party nominee, however Barack Obama’s Democrat party is expected to win the next election.

In the UK, the Conservative / Liberal Democrat coalition is expected to survive 2012 (78% probability).

In France, however, there is a 62% probability Francois Hollande will win the presidential election over incumbent Nicolas Sarkozy.

In Syria, Bashar al-Assad is expected to remain in power until at least 1 June 2012. Contracts for 1 July, 1 August and 1 September will be launched next week.

There is a 35% probability Israel will launch an airstrike against Iran in 2012, up from 28% last week and a 11% probability North Korea will detonate an atomic device up from 14% last week.

Science and Climate Change

There is a 40% probability average global temperatures will be hotter in 2012 than in 2011 and a 10% probability 2012 will be the hottest year on record.

NZ Issues

At this stage, the market indicates that Pengxin Group’s bid for Crafar farms will not become unconditional before 2 June 2012. More stock will be launched in the next week to determine whether their bid will become unconditional at a later date.

Despite claims in the media that officers may need to be laid off and stations closed, funding for the New Zealand Police is expected to be increased by 2.8% in this year’s Budget.

The defence force isn’t expected to announce an outsourcing of their payroll administration before 2013.

The Auckland Council is expected to add a new bin for glass collection, while the market is undecided whether there will be an increase in the waste levy rate.

New Zealand Politics

For the next New Zealand general election, due in 2014, party vote forecasts are: National 40.1% (down from 40.6%), Labour 37.8% (up from 35.1%), Greens 9.5% (down from 96%), NZ First 5.2% (up from 5.1%), Conservative 2.7% (steady), Act 1.7% (steady), Maori Party 1.4% (steady), Mana Party 1.3% (steady), and UnitedFuture 0.7% (steady).

In electorate contests, the Maori Party is expected to win only win two electorate seats, and the Mana and Act parties one each, while the Green, New Zealand First, Conservative and UnitedFuture parties are not expected to win any seats.

Based on these results, Parliament would consist of: National 49 MPs, Labour 47 MPs, the Greens 12 MPs, New Zealand First 6 MPs, the Maori, Act and the Mana Party 2 MPs each, UnitedFuture would have no MPs. There would be 120 MPs, requiring 61 to govern.

David Shearer’s Labour Party could form a Government with the support of the Greens, and one or more of the Maori Party, the Mana Party, or New Zealand First. Overall, there is a 57% probability Labour will form a Government after the next General Election, with a 42% probability David Shearer will be Prime Minister by 1 January 2015.

Grant Robertson and Judith Collins are favoured should there be a vacancy in the leadership of the Labour and National parties, respectively.

In New Zealand mayoral races, Bob Parker is set to lose Christchurch and Celia Wade-Brown to lose Wellington. Peter Beck, Lianne Dalziel and Aaron Keown are expected to stand for the Christchurch mayoralty. Dave Cull in Dunedin, Tim Shadbolt in Invercargill, Len Brown in Auckland, Julie Hardaker in Hamilton and Jono Naylor in Palmerston North all look safe.


iPredict is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz. The weekly snapshot is taken at a random time each week. This week’s was taken on the morning of Thursday 16 March.


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