19 Oct 2013

NZ share market now thought overvalued - survey

2:10 pm on 19 October 2013

Two-thirds of fund managers think the New Zealand stock market is overvalued, a survey shows.

The NZX50, comprising the 50 wealthiest listed companies, has risen steeply since last year, and is among the world's top-peforming bourses.

The latest Russell Investments quarterly survey shows 63% of fund managers believe the market is over-valued - a contrast to three months ago when most thought the stock market fairly valued.

Russell Investments head of consulting Daniel Mussett says stocks surged by 20% this year and share values are now of concern.

He says the market's performance has been outstanding, but it's accepted in the industry that the better markets perform, the more inevitable a correction.

Mr Mussett says the fear factor kicks in when the survey rates stocks as severely over-valued, which hasn't happened yet.

In other findings from the survey, fund managers believed the economy would continue to improve.