Buoyant outlook for Aussie equities

The Australian equities market appears ripe for growth, despite the local economy still moving at sub-par rates, a fund manager believes. 

With the global economy steadily improving and the dollar in decline, the outlook is optimistic for earnings at least in the first half of the year, Platypus Asset Management chief investment officer Don Williams told a briefing yesterday.  

Despite the market heading down 2 per cent on Tuesday, Williams said the “fundamentals” had not changed.  

“Global economic recovery is gaining momentum, maybe not as much as people would like, but we think the risk growth is at least evenly balanced and I would argue more towards the upside for this calendar year,” he said.  

“Domestically, we still have the lag impact of low rates assisting the economy. The way we would like to characterise the Australian economy now is flat, it’s growing below its potential.”  

But, he added, “as a generalisation, we believe that the lower currency will make Australia more competitive and is good for earnings as well”.  

Williams said while the February reporting season could be “tough” due to last year’s economic conditions, consumer optimism, coupled with the improving property sector and IPO market, would most likely lead to positive results in the next few months.