20 Nov 2017

Low rates, strong markets should continue - banker

10:41 am on 20 November 2017

The solid performance of financial markets and low interest rates should continue for several more years, a London-based investment manager says.

Sharemarket, stockmarket generic

Photo: 123RF

Alex Crooke, the head of global equity investment at Janus Henderson, was recently in New Zealand talking to local fund managers and brokers.

He said the strong showing on sharemarkets around the world was in part because of improving company earnings, better global growth, falling unemployment and rising wages, as well as continued low interest rates.

Mr Crooke said the recovery would be better sustained by the central banks slowly selling off all the assets acquired during the global financial crisis, rather than raises in interest rates.

"I think pushing interest rates up very sharply, as I mentioned, it puts the cost of borrowing money up very sharply for consumers and companies and that could put at risk their profitability, or their ability to grow," he said.

China and Asia offer the best investment opportunities, Mr Cooke said, and he expected investors would move out of the technology sector and back to automobiles, industrial and energy stocks.

But he said there was a good deal more angst and uncertainty coming because of Britain's exit from the European Union.

"Messy is the word ... this is a very tricky period of negotiation with a deadline.

"And as we all know with a lot of negotiations, often the hard decisions are not taken until the deadline is very imminent," he said.

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