Australian Equities - Investment Update
Current earnings multiples for the Australian market exhibit an extreme spread ranging from dangerously high for technology focused industrials to exceptionally low for resources. After several years of strong returns a number of traits characteristic of the boom of 2006 through 2008 (prior to the GFC) are also evident in the current market. In particular, earnings growth is muted and price momentum appears to be king with last month’s outperformers typically the best predictor of next month’s. As the GFC reminded us, this is not sustainable. Andrew Fleming, Deputy Head of Australian Equities, provides his perspective on the issues driving markets and where he sees the real opportunities.
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