Share prices are set to recover from current levels as the correction in equity markets is almost complete according to Mr Ronan Reid, joint managing Director of Dolmen Butler Briscoe Stockbrokers.
Mr Reid noted that bond yields have fallen steadily since the current market correction set in last year and have now reached their bottom level. "Energy prices have also peaked, retail stocks have started to perform as investors move from defensive stocks," Mr Reid told the Leinster Society of Chartered Accountants today.
Mr Reid said that the expected interest rate cuts by the Fed and ECB would give the required fillip to hard hit stockmarkets.
"In nine out of ten years when interest rates fall, equity markets perform, so despite the current market uncertainty, we see a recovery in equity markets during the course of the year," he said.
Addressing the gathering of accountants, Mr Reid also warned that creeping wage inflation was eroding Ireland's international competitiveness. "Wage inflation despite official statistics seems to be rising at between 13 and 20 per cent in many companies" he said.
"This makes the implementation of strategic plans more difficult and less enjoyable" he said.
The spiraling salary scales in the private sector also acted as a deterrent to entrepeneurship among young people, Mr Reid claimed.