Mathan Somasundaram

Market View: We maintain a bullish, long term view on the Australian equity market to reach 6500 in 2016. The RBA moves in February and May now show equities as the preferred risk/return option for investors wanting more than 3% return in a rising cost environment. We expect global investors to come back in to the Australian equity market when the currency gets down to low 70s. Recent profit taking has brought the market down close to the level we expected since early March with yield trade getting squeezed by rising bond yields. Long term investors should start to accumulate good quality growth/yield stocks while the risk averse will be better served to wait till the back end of this week to ride out the Greece risk, budget risk and the risk of banks trading post dividend. (VIEW LINK)


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James Marlay

Interesting to see how Banks trade ex div this week... After reporting season one of the stand out aspects was how strong many companies performed as they went ex dividend.

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Mathan Somasundaram

Banks have been beaten up a fair bit and I expect them to see buying support by the end of the week. There will be a lot of noise with NAB that will confuse the sector for a few days, but rates are staying low for a while and yield is still the main game.

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