At the company’s quarterly media briefing in Auckland yesterday, Tower Investments chief executive Sam Stubbs said there had been no change in the global economic outlook over the past six months, with equities still underpinned by loose monetary policy by central banks.

However, closer to home he said there had been some movement with Australian equities starting to look like good value after being outshone by New Zealand shares in the past couple of years.

“We’re seeing some interesting value stocks popping up in Australia in spite of the troubles they are having in their mining sector.”

Stubbs said in the past 18 months Tower had brought money back home to invest in New Zealand due to its positive view of this country’s economy, but it will now be looking to invest a greater proportion of its assets in Australian equities.

However, he said there are two sectors Tower won’t be investing in: mining and banks.

Tower head of equities Richard Stubbs (no relation) said Aussie banks faced shrinking margins due to mortgage price wars and increased funding costs.

“The banks over the next period of time are going to see increased market pressure as a result of the shrinking market for credit.”

He said when he visited Australia 18 months ago the mood was optimistic but now pessimism about the economy is setting in.

This pessimism, he said, has opened up some good value opportunities in a number of sectors including the industrial sector.

“Australians are very short term focused about the way they invest,” he said.  “They’re very paranoid about any company that might have a downward earnings surprise.”