Pundits See Global Economy Growing

The Morning Bulletin (Rockhampton, Australia), December 26, 2009 | Go to article overview

Pundits See Global Economy Growing


THE Australian sharemarket is expected to lift by up to 17% in 2010, after posting its best gains in 16 years, as the domestic economy continues its recovery from the global financial crisis.

The benchmark S&P/ASX200 index hit a global crisis low of 3121 points during trading in March 2009, but has since trended upward and closed at 4790.9 points ahead of Christmas Day.

CommSec chief economist Craig James says if the sharemarket ends calendar 2009 about that level, it will have gained nearly 30% since January - its best gain in 16 years.

"We believe that the global economy is in healing mode at the moment, but it will take some time to get back to full health," Mr James said.

There are still questions over the shape of the economic recovery in the United States, but in Australia the economy is being driven by China and strong population growth.

"So we're looking for the S&P/ASX200 index to reach 5300 points by mid-year and 5600 by the end of the year," Mr James said of the market's likely performance in 2010.

However, Mr James warned that when investors pile back into a market they can drive up valuations by too much.

"So what we need to see now is some validation coming from (company) earnings," he said.

"The next opportunity to basically see that is February, when we get the next earnings season."

Mr James expects to see a recovery in 2010 in investor appetite for sectors such as real estate and diversified financial stocks - both of which were sold off heavily during the global financial crisis.

Retailing stocks are expected to make more sedate gains, given that base lending interest rates are expected to rise further over 2010.

Investors might switch away from banking and resources stocks, which had underpinned the market's recovery in 2009, to a broader range of stocks.

But Mr James warned there was still potential for "speedbumps", particularly in terms of the financial system and banks, because there were still foreclosures and bad loans to be worked through.

AMP Capital Investors chief economist Shane Oliver also expects the stock market to reach 5600 points by the end of 2010.

"In other words, another reasonable year, but not quite as strong as we've had, because what we've seen in the last few months is a recovery from the panic low," he said.

The current bull market phase will be driven by corporate earnings growth.

The market is also likely to be more volatile, with the Reserve Bank of Australia expected to announce more official interest rate rises, perhaps as soon as February. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Pundits See Global Economy Growing
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.