Key highlights from the quarter were:

• Global share markets made impressive gains returning 7.5% in hedged NZD terms.
• NZ share market was stronger for the period and hitting further record highs.
• Listed infrastructure stocks got caught up in the broader rally in global share markets we saw over the period.

Global shares

Global share markets made impressive gains in the December quarter, with MSCI ACWI Index – Net returning 7.5% hedged NZD terms. Much of the gains were driven by a de-escalation in US-China trade frictions after the two sides finally agreed on a ‘phase one’ trade deal that will see China increase its purchases of US energy, farm and manufactured goods and the US reduce some tariffs on Chinese products. The agreement also addresses US concerns over its trade and technology secrets, with China agreeing to better protect American intellectual property rights. Share markets also benefited from the US Federal Reserve’s decision to cut interest rates again in October, tentative signs of ‘green shoots’ in the global manufacturing sector and hopes of an orderly Brexit following the Conservative Party’s win in the UK general election. Stocks in the US (8.5%1), Japan (8.7%2), China (7.4%3), Europe (4.9%4) and the UK (1.8%5) were all higher for the quarter.

New Zealand shares

The New Zealand share market was stronger over the period, returning 5.3%6 and hitting further record highs in the process. Local stocks benefited largely from positive US-China trade developments, a series of encouraging domestic economic data and an uptick in corporate activity, including Kathmandu’s acquisition of surfing brand Rip Curl for around $370 million. Stocks were also well supported by evidence of improving global manufacturing activity and easing Brexit concerns.