Nikko looks to be slightly defensive

That's against a backdrop in which the official cash rate may remain higher for longer, if the Reserve Bank's predictions prove accurate and inflation remains sticky.

That has meant Nikko is favouring stocks such as Spark, Infratil, Summerset, Ryman and Fisher & Paykel Healthcare, as well as Argentina-based lithium producer Allkem and Australia-based holiday and lifestyle property company Ingenia Communities, Sherrock told an investment forum in Wellington hosted by Nikko on Tuesday.

Stocks such as Spark, Infratil, which owns phone company  One NZ, formerly Vodafone, and Contact Energy offer stable earnings and attractive yields, while Infratil and Contact also give Nikko exposure to the decarbonisation theme.

Infratil owns US-based renerwable energy developer Longroad Energy and has founded similar companies in Europe and Asia while Contact is in the process of phasing out its thermal power stations and replacing them with geothermal plants.