World equity markets have had another episode of nervousness, partly linked to the UK's Brexit referendum and partly to some evidence that global economic growth, while continuing, is slower than previously expected. Further episodes look likely during the year as investors periodically reassess the downside risks to global business activity. On the positive side, assets seen as defensive (property, infrastructure, government bonds, gold, the yen) have been beneficiaries of heightened investor concerns. In New Zealand, the business cycle is still in robust shape and equities and property have benefited, though corporate profitability will need to deliver good results to justify what are now expensive share valuations.
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