AMP's head of investment strategy thinks the New Zealand share market is fully valued.
Keith Poore says equity investors are being rewarded for their risk, and earnings are showing signs of improvement.
He says the recent reporting season indicates healthy earnings coming through which support the rise equity in prices.
He expects earnings to grow faster over the next few quarters.
"Earnings generally follow economic growth, and when you think the economy is going to grow above potential - up to 3% over the next year or so - that should flow through to earnings and you'll see earnings grow round about 5% on a nominal basis."
He also says the NZX has the ability to support new listings.
"There's been quite a bit of IPO activity over the last year or so and the market's done very well, has held up very well.
"You probably wont get 20% and 30% returns like we've seen over the last year or two - definitely from kiwiSaver it's going to be an ongoing source of demand for the New Zealand equity markets."
He says overseas investors are still seeing relatively high dividends from the New Zealand market and the fact the New Zealand economy is doing quite well relative to other foreign, developed markets will continue to support the market.