Equity Engineer – September 2015 | Economic growth lost in transition but yield trade remains strong

Mathan Somasundaram

Deep Data Analytics

Market View: We maintain a bullish long term view on the Australian equity market while downgrading our 12 month index target from 6500 to 6100 with declining global growth and deteriorating domestic economy. The RBA move in February and May have made equities the preferred risk/return option for investors wanting more than bond yield return in a rising cost environment. Recent profit taking by global investors on currency worries has brought the market down to the fair value level of 5000 with no premium being paid for the substantially high dividend yield. We maintain our positive long term view on the yield trade (i.e. Banks, Div Financials and Telecommunication services) while health care looks the best growth/currency story. We continue to favour the new economy (i.e. MITCH Universe – Media, Information, Telecom, Consumer and Health) over the old economy on the long term view. Preferred Sectors: Materials, Miners, Gold Miners, Commercial Services, Transport Infrastructure, Consumer Services, Diversified Media, Specialty Retail, Staple, Health Care, Banks, Diversified Financials, Property Trusts, Information Technology and Telecommunication Services. (VIEW LINK)

Mathan Somasundaram
Founder & CEO
Deep Data Analytics

Over 30 years’ experience in the finance/tech industry. Mathan has worked extensively in all parts of the finance sector (i.e. County NatWest, Citi, LIM, Southern Cross, Bell Potter, Baillieu Holst and Blue Ocean Equities). Currently Founder and...

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