Interest rates likely to support housing longer term

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Interest rates likely to support housing longer term. On sectors and stocks to watch this reporting season, Chris Stott, CIO at Wilson Asset Management says; We continue to believe that companies that are tied into the housing sector have scope to outperform. Many of these companies have experienced large re ratings in the last 12-18 months. We think this housing cycle will be longer than previous given the scope for interest rates to remain at record lows for the next 2-3 years. Further interest rate cuts cannot be discounted. The IT services sector is one we are currently cautious on in Australia. In parts, this sector is undergoing a structural change which will dampen the outlook for earnings growth in the medium term. Economic growth remains sluggish which is not conducive for these companies to outperform in our view.

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