Sharechat Logo

Worst over for NZ economy

by Rob Hosking

Thursday 15th June 2006

Text too small?
Smith told an ING roadshow in Wellington yesterday that signs are tentative, but they are there.

"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."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar withstands poor manufacturing data
Bublitz to serve home detention following appeal
Former G8 boss takes over management of Evolve
Precinct boosts earnings, withholds $34m from Fletcher
Sky TV shares rise on US$40m RugbyPass acquisition
Precinct boosts earnings, withholds $34m from Fletcher
Sky TV shares rise on US$40m RugbyPass acquisition
NZ manufacturing activity shrinks for first time in seven years
Orr defends RBNZ rate cut, says monetary policy looks ahead, not behind
Michael Hill underlying earnings fall 14% as margins squeezed

IRG See IRG research reports