Rising shares reflect ‘improved outlook’
Wellington reporter Many share prices now fully incorporate the improved outlook for the New Zealand economy, the chief general manager of National Mutual, Mr Steve Somogyi, said in Auckland. “While it is pleasing to see the much-improved structure of the New Zealand economy being recognised by the sharp rerating of the equity market, we feel that many share prices now fully incorporate this,” he said.
“We are not entirely bullish at current higher price levels,” Mr Somogyi said. Confirmation of economic improvement was required through improved company profits before further sharemarket rerating could be justified. Mr Somogyi pinpointed the rising food price index and the failure to rein in Government spending as medium-term problems the Government still had to address. “Controlling the deficit
by increasing taxes has reached its limits,” he said.
If there was solid economic pick-up, Mr Somogyi predicted New Zealand would benefit from the “soft landing” apparently occurring in the world economy. The New Zealand property market, however, remained disappointing. “We topped off our latest development project last week and have no further plans in the pipeline,” Mr Somogyi said.
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Press, 21 August 1989, Page 14
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188Rising shares reflect ‘improved outlook’ Press, 21 August 1989, Page 14
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