List the SOEs – Fund Managers’ Christmas Wish List

16 December, 2011

List the SOEs – Fund Managers’ Christmas Wish List

The privatisation and listing of state-owned enterprises (SOEs) tops New Zealand fund managers’ Christmas wish lists according to the latest Russell Investments Fund Manager Outlook survey released today.

“We wanted to uncover what managers would like the post-election government to place in their Christmas stocking to improve the prospects of the New Zealand equity market next year”, explains Russell Investments, Head of Consulting, Daniel Mussett.

“Managers believe that an SOE float will help breathe new life into an equity market that has struggled to attract new listings in recent years,” he said.

Making KiwiSaver compulsory, or at least increasing contributions, came a close second. A Government austerity programme, a focus on debt reduction, lower corporate tax rates and new free trade agreements also made the list of desired Christmas stocking stuffers.

Now in its 20th quarter, the Russell Investment Manager Outlook survey measures the sentiment of New Zealand’s leading investment managers and their views of the New Zealand investment market.

Despite a challenging year seeing earnings downgrades and ongoing macroeconomic issues in Europe, New Zealand investment managers are still finding reasons to be optimistic. The New Zealand investment market has performed well relative to Australia and New Zealand fund managers continue to see the New Zealand market as being fairly valued.

Sentiment toward each of the asset classes remains consistent with recent quarters. However, bearishness on global bonds is now near its highest of any time during the survey’s five-year history. Concerns around rising yields as managers factor in lower prospective bond returns are driving this sentiment. Sentiment to equities was more bullish consistent with previous quarters.

“Sluggish growth” encapsulates the sentiment of most managers for 2012. Most expect growth to be similar or slightly stronger than this year with the slowdown in the economies of New Zealand’s key trading partners and delays in the Christchurch rebuild identified as inhibiting factors.

ENDS

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