Livewire Equities

Matthew Kidman from Centennial Funds is bullish on the Australian market in the medium-term. He says that PE expansion, plus 2-3% EPS growth, (which could be as high as 5% “if we’re lucky”) will drive the market higher, and cause the ASX to outperform US markets. “We sit here with a PE of 15 on the market; industrials a bit higher, resources a bit lower. The US sits at about 19 or 20, where’s the right PE at the moment? I don’t know, but it’s probably 3 or 4 points higher than where we are.” He expects low rates to continue to support asset prices in an environment of low inflation. However, he does expect the market leadership to change, with expensive healthcare & infrastructure stocks failing to lead it higher. He expects resources will stop acting as a drag, and says the banks could see yield compression (i.e. higher prices). He expands on his market outlook here: (VIEW LINK)


Please sign in to comment on this wire.