Equity Engineer - October 2014 | Global Investor Pain, Local Investor Gain | Recently the market has been hit with global investors getting out due to currency...
Equity Engineer - October 2014 | Global Investor Pain, Local Investor Gain | Recently the market has been hit with global investors getting out due to currency devaluation worries. This panic selling on top of the usual September selloffs has seen the index back at fair value and offers a good buying opportunity in quality growth and yield large caps. We expect to see domestic institutional investors buy back into the market at current value levels while the global investors wait for currency to stabilise. Given the interest rates are going to remain relatively low in 2015, we expect global investors to come back to the quality yield in Australian markets as currency stabilises. Geopolitical issues, domestic budget woes and lack of corporate initiative have forced RBA to take the economic leadership role. Given the low inflation, real wages decline, rising cost of living, rising unemployment and low growth outlook, we are of the view that the RBA is trying to cool house prices as a first step towards delivering a rate cut in mid-2015 to stimulate the economy. (VIEW LINK)
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