Nikko's Williams warns NZ shares are "expensive":

Wednesday 6th April 2016

Nikko Asset Management's head of equities Stuart Williams has warned New Zealand's share market is overly expensive though he acknowledged that yield has held up.

Speaking at the company's 2016 Investment Summit today, Williams justified his view by pointing to a current price-to-earnings ratio of 18.5, compared to a five-year average of 16.2.

Williams said the NZX50 was likely to deliver a more modest return this year than in 2015 when the market gained 13 percent while noting it has already risen about 6 percent so far.

Yield from shares via dividends hasn't been ground lower, Williams said, citing Spark's growing dividend policy and Chorus' reinstatement of payments to shareholders.

Speaking to his company's portfolio positioning, Williams said it was highly unlikely to have listed property in its portfolio.

With just over 50 percent of the local market now owned offshore, Williams said there was both opportunity and risk in that degree of offshore ownership, with index changes an opportunity for the investment manager. It sold some, but not all, of its stake in Meridian Energy when the stock was added to an index last month, as it expected follow-through from other buyers which materialised, he said.

(BusinessDesk)

BusinessDesk.co.nz

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