Growth assets well placed for 2016: AMP Capital

Growth assets well placed for 2016: AMP Capital

The combination of decent global growth, low inflation and 'easy' monetary policy augers well for growth assets going into the new year, says AMP Capital.


Shares are likely to see their traditional 'Santa Claus' rally over the Christmas/New Year period, according to AMP Capital chief economist Shane Oliver.

Improved valuations, easy monetary conditions and the drying up of new issuance will contribute to the strength of stockmarkets towards year end, Mr Oliver said.

"However, worries about the Fed and a rising $US possibly weighing on commodity prices and emerging countries may mean that volatility will remain high," he said.

Looking ahead to 2016 more broadly, conditions are favourable for growth assets in general, Mr Oliver said.

Global shares are likely to trend higher helped by relatively high valuations compared to bonds, he added.

"For shares we favour Europe (which is still unambiguously cheap and seeing continued monetary easing), Japan (which will see continued monetary easing) and China (which will also see more monetary easing) over the US," Mr Oliver said.

"Australian shares are likely to improve as the drag from slumping resources profits abates, interest rates remain low and growth rebalances away from resources," he said.

"But they will probably continue to lag global shares as the commodity price headwind remains.

"Expect the ASX 200 to rise to around 5,700 by end 2016," Mr Oliver said.

Read more:

Good opportunities in distressed energy debt

NAB's UK exit on track for February

Productivity Commission bolsters ranks

 

Growth assets well placed for 2016: AMP Capital
investordaily image
ID logo
promoted stories

Appointments

investordaily image

AMP names incoming chief risk officer

Jessica Yun

investordaily image

Antares Equities hires new director

Staff Reporter

Brad Fox

Former AFA CEO appointed to boutique board

Staff Reporter

Analysis

investordaily image

Warning lights flashing on Aussie equities

Roy Maslen

investordaily image

What’s in store for the economy in 2018?

Frank Uhlenbruch

ST Wong

Busting common passive investing myths

ST Wong