Q: After going down for a couple of years , the price seems to be roughly flat the past year or so. Is it just the inflation rate that makes the share price more or less appealing to investors or do interest rates affect it too? What would you expect in the next couple of years if inflation stays flat and interest rates drop?
5i Research Answer:
Interest rates would have a bit of influence here but the majority of sensitivity would be around inflation. If rates drop and inflation is flat, we would expect perhaps a slow drift down in price. The inflation re-set is annually so even if inflation drops a higher rate is still paid for the prior year period.