We continue to be cautious on some regions and industries.The credit expansion that we have seen in China is a concern; in the US the student and car loan market has ballooned over the last 12 months; and we are not that confident in the Italian banking sector. If any of these should fall over it will have an impact, but we do not think they will cause the wide spread correction of 2000 or 2008.
We feel there is better value in offshore markets when compared to New Zealand. We are not negative on our local market but after nine years of strong equity market increases, we think it is better to have a benchmark weighting to New Zealand and allocate greater funds offshore.
After months of polls and speculation the election results ended up as has been discussed for some time, neither National nor Labour can govern alone. NZ First and Winston Peters will have the deciding vote. What did it all mean for the NZ market, well not much really. The share market continues to move higher but we have seen some weakening in the NZ dollar against the US and Australian dollar.