Steady as she goes after polls

By ELLEN READ

A crystal ball would be of more use than a market preview as a guide to this week's stock markets movements.

While the New Zealand market remains fundamentally sound, brokers say international events will dictate direction, especially with little on the local agenda.

For example, last week the local market initially held steady as global markets tumbled, then succumbed on Wednesday before rebounding later in the week in line with the US.

Looking at local events for this week, sharemarket reaction to Saturday's election is expected to be muted as the poll is considered unlikely to result in significantly different policies, although the make-up of Parliament, obviously, will be different.

There was a tiny flicker of nervousness on international money markets at the absence of a clear result, and another when Helen Clark added to the likelihood of on-going uncertainty with her talk of a minority government, but at most that led to a very small increase in the risk premium for New Zealand.

Robin Clements, of UBS Warburg, said the election result meant there should not be a change in economic direction but added: "We consider this direction to be one of erosion and a direction that will not deliver sustainably higher growth."

The immediate policy concern for the markets would be the pending appointment of a new Reserve Bank Governor and any amendments to the Policy Targets Agreement.

Today sees the continuation of the annual meeting season, with AGMs for Mooring Systems, Owens Group and Blis Technologies scheduled.

Owens Group directors may face some tough questions as the company last month reported a $3.3 million full-year profit, down 29 per cent, on the previous year. Chief executive David Ritchie said the group had been hit by volatility in the international economy.

On Wednesday, Air New Zealand launches its express class: a domestic service with lower fares, more seats and an inflight snack service to replace meals.

On Thursday, Contact Energy announces its result for the nine months to June.