Invest
Real test for Aussie markets still to come
Australia’s business sector is so accustomed to political volatility that last week’s drama will likely leave no scars, economists are predicting, but challenges still wait.
Real test for Aussie markets still to come
Australia’s business sector is so accustomed to political volatility that last week’s drama will likely leave no scars, economists are predicting, but challenges still wait.
According to ANZ analyst Felicity Emmett, the fact Australia has lived through a decade of shifting prime ministers means businesses are growing “inured” to leadership changes.
“Uncertainty around government policy is high at present. The government has postponed indefinitely its flagship National Energy Guarantee policy and is now proposing a number of interventionist policies aimed solely at keeping prices low,” she said.
“While the link between political uncertainty and business conditions is inconsistent, we are alert to the possibility that the current mess in Canberra may delay investment decisions.”
ANZ said the upcoming Roy Morgan consumer confidence poll will be the “most timely indicator” of how Prime Minister Scott Morrison’s ascension will affect consumer sentiment.
“We don’t think it inevitable that this week’s events will have a measurable impact on the economy, but we will certainly be watching for evidence to contrary,” ANZ said.
Asset manager Insight Investment also noted the political turmoil, arguing that the gains in the Australian dollar were “driven by political turmoil more than economic data”, ultimately returning its initial gains.
Investors’ best bet is to ignore the political noise and return to fundamentals, Morningstar Investment Management Australia’s Brad Bugg said.
“Given that political circumstances are so difficult to predict, we’d recommend putting them to one side and focusing on valuation instead,” he said.
“There’s no causal link between politics and what happens in investment markets. The two are very separate. Although we are very tempted to draw a line from one to the other, that can be a real mistake.”
JP Morgan Asset Management global market strategist Kerry Craig said that while political changes affect sentiment, they don’t shift the fundamentals.
“Unless there is assumed to be a large change in monetary or fiscal policy or the regulatory backdrop in the near term, investors will go back to focusing on what is important — the health of the economy and corporate fundamentals,” Mr Craig said.
Stock market
Where to find dividends in a low-rate environment
Australian investors who are income-focused are still able to find strong dividend-paying stocks, but the market is changing, an expert has said. ...Read more
Stock market
Did investors overreact to the COVID-19 pandemic?
The economic downturn has not hit many sectors of the economy as hard as first predicted, with the reporting season revealing that many sectors will recover quickly, an investment fund has revealed. ...Read more
Stock market
Market volatility not a worry for Millennial investors
In spite of COVID-19-related volatility, Australian investors aged between 24 and 39 remain bullish about the current sharemarket. ...Read more
Stock market
Why investors will miss their mark for the next 5 years
Australian investors are urged to rethink their investment targets, with the COVID-19 recovery likely to have an impact on returns, new research has found. ...Read more
Stock market
Standing strong in a crisis, ethical investments are here to stay
Ethical investments are more than just a short-term fad, an investment manager has advised. ...Read more
Stock market
Sovereign wealth fund goes negative for the first time since the GFC
The Future Fund has posted a rare negative return for 2020 and warned that a “challenging and volatile” economic climate could hurt previously strong gains moving forward. ...Read more
Stock market
Don’t worry about dividends: Stocks still going strong
Dividends are still up for grabs for active investors willing to wade through the major headlines and an abundance of market negativity, an investment expert has flagged. ...Read more
Stock market
Why Afterpay and Zip investors should buy Tuesday and sell Friday
Investors in speculative stocks, including Afterpay and Zip, can theoretically purchase more shares at a reduced price on a Tuesday, before seeing the value increase on a Friday, new research has reve...Read more
Stock market
Where to find dividends in a low-rate environment
Australian investors who are income-focused are still able to find strong dividend-paying stocks, but the market is changing, an expert has said. ...Read more
Stock market
Did investors overreact to the COVID-19 pandemic?
The economic downturn has not hit many sectors of the economy as hard as first predicted, with the reporting season revealing that many sectors will recover quickly, an investment fund has revealed. ...Read more
Stock market
Market volatility not a worry for Millennial investors
In spite of COVID-19-related volatility, Australian investors aged between 24 and 39 remain bullish about the current sharemarket. ...Read more
Stock market
Why investors will miss their mark for the next 5 years
Australian investors are urged to rethink their investment targets, with the COVID-19 recovery likely to have an impact on returns, new research has found. ...Read more
Stock market
Standing strong in a crisis, ethical investments are here to stay
Ethical investments are more than just a short-term fad, an investment manager has advised. ...Read more
Stock market
Sovereign wealth fund goes negative for the first time since the GFC
The Future Fund has posted a rare negative return for 2020 and warned that a “challenging and volatile” economic climate could hurt previously strong gains moving forward. ...Read more
Stock market
Don’t worry about dividends: Stocks still going strong
Dividends are still up for grabs for active investors willing to wade through the major headlines and an abundance of market negativity, an investment expert has flagged. ...Read more
Stock market
Why Afterpay and Zip investors should buy Tuesday and sell Friday
Investors in speculative stocks, including Afterpay and Zip, can theoretically purchase more shares at a reduced price on a Tuesday, before seeing the value increase on a Friday, new research has reve...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
