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With a combined market capitalisation of over $585 billion, the big four banks and resources companies make up a massive 33.6% of the ASX 200. The Australian banks have benefited from an unprecedented run in the Australian economy and housing markets, but growth has stalled recently; is it time for a resurgence? By contrast, the fortunes of the big miners are more tied to the recovering global economy, but can the earnings keep pace with the share price movements? In this Thematic discussion, Matthew Kidman hosts Chad Slater from Morphic Asset Management, and John Ayoub from Wilson Asset Management. They discuss their views and preferred exposures to the biggest industries in Australia.

Key points:

  • Regulatory headwinds and slowing credit growth will be continuing issues for the banks.
  • CBA offers the best upside following its struggles last years.
  • For resources, this year will be a question of capital management; have they learned from their past mistakes?
  • Oil prices have run well ahead of the equity prices. The big oil producers look attractive momentum.
  • Rio Tinto is expected to “keep printing cash and have a great year.”

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