MARKET TALK: Warning to investors – don’t be complacent about NZX strong performance

Duncan Bridgeman and Rob Mercer discuss sharemarket news on NBR Radio and on demand on MyNBR Radio.  

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A leading analyst is warning investors not to get carried away with the local sharemarket’s strong performance and suggests reducing exposure to New Zealand equities as economic pressure builds.

Rob Mercer, head of private wealth at Forsyth Barr, says valuations are becoming harder and harder to justify as share prices climb, while the full effects of the slowing agriculture sector has yet to flow through.

“I think people need to continue to be very disciplined around what price they pay for fundamentals rather than just focusing on dividend yields,” Mr Mercer told NBR Radio’s Andrew Patterson.

“Also New Zealand investors shouldn’t get complacent about the New Zealand market being the best market in the world over the past 10 years. They need to start looking across the Tasman … and to international equities where again, the fundamentals and the upside look quite good in terms of value for risk.

“So it’s perhaps time to reset your goals, look at exposures to New Zealand equities and start to rebalance into other areas.”

Mr Mercer also discusses recent sharemarket news, including interim results from Xero and Z Energy and Nuplex’s trading update at its annual meeting this week.

Click on the special feature to listen to Market Talk. Click here for a copy of Rob Mercer's primary disclosure statement.

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