Australian Shares

Strong performance from Aust shares expected

Australian shares performance

Investors can look forward to stronger returns from Australian shares on the back of better economic conditions in 2023.

An Australian-based wealth manager has forecast headwinds for domestic shares will continue in the immediate term, but will demonstrate significantly stronger performance in the back half of 2023.

“My expectations are by the second half of this year I think we might hit a bull market because by then inflation should be under control. We’re not saying interest rates will fall away very quickly, but the expectation [is] interest rates have already peaked,” Tribeca Investment Partners lead portfolio manager Jun Bei Liu said.

Jun Bei pointed out active investing will be critical this year and there will be a few key influencing themes driving opportunities in the domestic equity market, such as the performance of the Australian dollar.

“The Australian dollar is going to be stronger, so what does that mean for the sectors [and] who is going to do better? Normally a stronger Australian dollar does mean commodity companies will do better,” she said.

Further, she noted the reopening of China after the COVID-19 pandemic lockdowns will also contribute to the better performance of the local commodities sector.

According to Jun Bei, Australian equities will not be the only asset class investors can be optimistic about in 2023, with more stability around inflation and interest rates.

“I do think in the next six months you’ll see the stabilisation of the housing market. We’ve had a price fall of 8 per cent, which is nothing compared to how high it rose,” she said.

“We’re already seeing some investor interest into the housing market. Listings are down significantly, over 20 per cent, but we’re in January and it’s a really early stage [in the year] and the December numbers weren’t good.

“But we’re moving into this stage where prices have fallen, investors are interested, balance sheets are pretty good across corporates and individuals, so in the next six months I think [the property market] will stabilise.”

She acknowledged this should trigger further optimism for investors given the property sector is a big component of the Australian economy.


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