Investors' confidence rises with sharemarket

Tuesday 19 October 2004

The 24 per cent rise in the New Zealand sharemarket's top 50 companies index over the past year is keeping market investors' confidence high - as high as property investors.

By The Landlord

The ASB Bank investor confidence survey out today has topped a net 20 per cent positive for the second quarter.

Confidence levels are only just below the 24 per cent net positive peak at the end of last year.

Never before has investor confidence stayed above the net 20 per cent mark for more than one quarter.

Investors had had high returns across a range of asset classes in the past 12 months, the bank said.

High returns had a "natural tendency" to curb immediate future expectations, so the level of confidence was "extremely encouraging", said James Mitchell, the bank's head of financial services.

"It also has to be seen against the backdrop of widespread talk of a New Zealand economy about to slow and concerns about the effect of high oil prices on the global economy," he said.

Some economists expect the economy to grow a strong 5 per cent this year but then slow down sharply to about 2 per cent next year, hit by rising interest rates and oil prices, a high dollar and slower migration.

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