Nzx 50 Index

IBISWorld forecasts the NZX 50 index to trend upward by 1.3% in 2024-25, to average 11,877.7 index points. In response to high inflation, the RBNZ jacked up the official cash rate (OCR) starting in 2021, which has limited expenditure on equities. However, in 2024-25 the cash rate is expected to start declining, albeit slowly. Consumer sentiment has also fallen sharply over recent years, hampered by high inflation and interest rates impacting cost of living. In 2024-25, consumer sentiment is on track to recover, improving the investment environment. With unemployment expected to rise, investors in New Zealand are set to cautiously grow in confidence, fuelling a marginal improvement in the performance of the NZX 50.

The COVID-19 pandemic disrupted a decade of high and continuous growth in the NZX 50 index, a situation primarily related to very low interest rates. Record high prices in the domestic sharemarket have followed a wider trend in asset prices in New Zealand over the period. Real GDP has continued to strongly grow over most of the period, which has contributed to a strong performance in the local sharemarket. Nonetheless, the NZX 50 came under pressure in the early stages of the COVID-19 pandemic. Faced with an uncertain situation, the RBNZ cut interest rates to record lows in March 2020, a situation which persisted until October 2021. This period of hyper-low interest rates, followed an extended five-year period of low-interest rates, led many investors to seek higher yields, which pushed them towards equity markets. On the other hand, New Zealand has become an increasingly attractive place to invest, viewed as a secure and open economy, that has a business-friendly environment. This dynamic was temporarily halted by a sharp rise in inflation and interest rates in 2022-23, which tanked investment in the share market. As these conditions slowly stabilised, growth in the NZX 50 index has followed. Overall, IBISWorld forecasts the NZX 50 index to rise at a compound annual rate of 2.0% over the five years through 2024-25.