The Australian share market is looking attractive enough for investors to make a return on the expectation of a recovery in 2011, according to a new analyst report released by Credit Suisse.
The report suggests that while the current company reporting season may see a decline in earnings per share (EPS), “the market is looking attractive enough for investors to position for a financial year 2011 EPS recovery”.
“In our view, there is limited downside to the market from current levels, but plenty of medium-term upside,” the analysts’ report said.
It said in the current financial year, the EPS of the Australian Stock Exchange 200 (ASX 200) was likely to stabilise as current overvaluation corrected and credit growth stabilised.
The analysis said that by financial year 2011 economic recovery was likely to be well underway, consistent with significant EPS upgrades.
