The local equity market has priced in a falling $A, but what if it's wrong

Clime Investment Management

Clime Investment Management

The local equity market has priced in a falling $A, but what if it's wrong? As we noted in our report, it should be clear to investors that the Australian economy - and earnings -are hostages to the $A. There are two possible scenarios. Firstly, if the $A falls, it will provide a growth and inflation stimulus to the economy which will flow through to a number of sectors and stocks. At 5,500, the local equity market is priced for the $A to fall to around 85 cents and stimulate economic growth which will flow through to earnings growth. But if the $A stays strong, domestic companies are in trouble. That risk suggests the market is at least fully valued. Read the full report: (VIEW LINK)


Clime Investment Management
Funds Management & Stock Research
Clime Investment Management

The Clime Group is a respected and independent Australian Financial Services Company, which seeks to deliver excellent service and strong risk-adjusted total returns, closely aligned with the objectives of our clients.

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