Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market ran up nearly 2.5% on global sentiment and commodities seeing some support before the US Fed update. The main game remains the US Fed move tomorrow morning and the rate rise is almost certain while the attention will be all about their outlook for the next few years. We think the forward curves will get even further flatter for yields and support the premium yield from the Aussie equities. Notable moves today were (1) CWN popped up on potential privatisation rumour of some assets, but given the capital requirements…partial asset sale or cap raising….always a better option after a price rise…not my preferred play (2) DMP announced another JV…this time Germany…won’t be betting against DMP management…expensive multiple…but it will probably go even higher (3) WHC had a big bounce post market update…outlook as clear as mud…not my preferred sector (4) CAJ lead the health care belting after MYEFO cuts…PRY and SHL are also being taken to the cleaners on this. When the senate blocks these cuts, SHL should be the preferred rebound play due to global model. (VIEW LINK)