ANZ Smart Choice Super Investor Update : Member Update Autumn 2013
5 Investment insights 2013 got off to a good start thanks to the three largest global economies. In the US, President Obama and the US Congress finally agreed on a raft of measures in early January to avoid the so-called ‘fiscal cliff’. Later that month, China confirmed its economy grew 7.9% in 2012 which was stronger than expected. Lastly, in Japan, a new government took the reins of power promising a program to spur on the economy. Markets believed these events would add momentum to a cyclical recovery which is largely been driven by the US central bank’s extensive asset purchasing. Stronger sentiment helped push up share prices, particularly in the US where market indices set a series of record highs. Looking further afield, issues still remain. The biggest concern is Europe where government spending cuts are slowing the region’s growth and pushing up unemployment especially in Spain and Greece. It is also fuelling political tensions and electoral uncertainty that may frighten off investors. Here in Australia, there are mixed signals. On one hand, consumer sentiment has improved, partly because property and share values are rising. Households are spending more and saving less which is good for growth. On the other hand, companies are less upbeat, especially those in manufacturing, construction and retail. A major concern for business and policy makers alike is the high Australian dollar. It is hurting exports and prompting manufacturers like Holden to layoff workers, compounding the impact of falling investment by resource companies. Australian shares The prospect of a global recovery was positive for small cap shares and companies that compete in markets overseas. Mining and resource shares came under pressure because of lower commodity prices whereas companies like banks and telcos broadly maintained their values. International shares Performance varied across regions. As mentioned above, the US and Japan markets were helped by local central bank actions and impending government stimulus respectively. By contrast, European markets Stewart Brentnall, ANZ’s Global Chief Investment Officer provides his insights to the notable market events of the last quarter.
Investor Update 2012
Member Update Winter 2013