The NZX50 reached a new high yesterday, something that is becoming a habit. But this time, it was the significant benchmark of 7000 points.
Craigs Investment Partners broker Chris Timms said it had been a rapid rise for the index after reaching 6000 points in February and moving quickly to 7000 about 2pm yesterday.
"The market has had an exceptional run based on lower interest rates. Investors are looking outside of residential property and term deposits for some income.''
Apart from low term-deposit interest rates, KiwiSaver had added momentum to the sharemarket and offshore investors had been present, he said.
The dividend yield for the NZX was 6%-plus and companies had been reporting good results in the current reporting season.
When interest rates were low, it was good for sharemarkets. When rates were high, sharemarkets suffered, Mr Timms said.
The interest rate yield curve indicated low interest rates for the next three to four years.
But he warned the rising markets could not last forever, particularly with the price-earnings ratio as it was. New Zealand was eight years into a bull market and the record was 12 years.
"We must consider this with a degree of caution. There is a flood of money looking for a home and not only in shares. Housing prices have been soaring.''
