Sharemarket outlook

The market’s love affair with healthcare stocks could turn sour should valuations correct
Health care encompasses companies such as Ryman Healthcare, Fisher & Paykel Healthcare and EBOS Group.
We believe health-care stocks in general will benefit from an ageing population which is expected to grow at a faster rate than the overall population. We believe the share prices of New Zealand health-care stocks are more than pricing in the growth prospects and valuations appear stretched at the moment.

While we see no imminent catalysts for repricing, other than rich valuations, we believe investors should be cautious and wait for a decent pull-back before initiating positions.

The electricity sector appears cheap as regulatory concerns and weak demand weigh on valuations

The utilities sector encompasses firms that generate, retail and distribute electricity.