Worst over for NZ economy
The worst could be over for the New Zealand economy and an upswing in the New Zealand sharemarket is likely, says ING’s manager of New Zealand equities Amanda Smith.
Thursday, June 15th 2006, 7:00AM
by Rob Hosking
“I’m not going to die in a ditch over this prediction because we are still short in New Zealand equities ourselves. But we are looking to move to anticipate an upswing. No one is going to ring a bell and tell you when the upswing is. But the market will anticipate it.”
Smith says there is unlikely to be a major correction and there is a low risk of an external shock to the economy.
It also appears unlikely the Reserve Bank will hike interest rates again in the foreseeable future.
The strong balance sheets of a sizable number of New Zealand listed companies also means we are likely to see a considerable degree of merger and acquisition activity, she says.
“The quality of New Zealand listed companies is quite high and most are in a good position to weather any downturn.” She notes that expectations are for the local market.
Oil prices are putting pressure on costs, and “there are expectations of low earnings growth.”
The lower currency – although not helping on the inflation front – does reduce the risk of a recession.
“The major reason we have been short in New Zealand equities was the high currency we had until relatively recently.”
Overall, she says, “the worst is probably behind us.”
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
| « Rules catch another manager | Sovereign takes regulation bull by the horns » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
