Oliver's Insights
Oliver's Insights is a special commentary by Dr. Shane Oliver, Chief Economist and Head of Investment Strategy, on issues and trends affecting the economy and financial markets. Dr. Oliver is supported by a team of economists dedicated to delivering timely commentary and the asset allocation decisions for AMP Capital's diversified product range.
The profit reporting season and shares a year after the low
4 March 2010- In terms of net positive surprises the reporting season just ended in Australia was the strongest since August 2007. Profits have now bottomed and with the economy picking up pace and costs well and truly under control, profits are likely to rise by around 20% over the next year. - The upswing in the global profit cycle is a global phenomenon, albeit most evident in Asia and the US. - As a result of the recent correction in shares and upwards revisions to earnings expectations, shares are now slightly cheap. Stronger earnings are likely to be a key antidote to worries about sovereign debt and monetary tightening in some countries this year.
View The profit reporting season and shares a year after the low (PDF - 90 Kb)
Is China a bubble that's about to burst?
26 February 2010- Concerns that China is a bubble about to burst are unjustified. There is no evidence of generalised overinvestment, China’s reliance on exports is overstated and likely to diminish with consumption taking a greater role, it is very hard to argue there is an asset bubble and China’s banks are in reasonable shape. - Although further monetary tightening is likely in China, we don’t anticipate a bust any time soon and continue to expect Chinese gross domestic product growth of around 10% this year. - This is positive for the commodity price outlook.
View Is China a bubble that's about to burst? (PDF - 92 Kb)
The Australian economy - heading into a better place
17 February 2010- The Australian economy is set to grow by around 4% through this year, reflecting the lagged impact of monetary and fiscal stimulus, high levels of business and consumer confidence, the rebound in wealth, and higher export prices. This is likely to push unemployment back below 5% over the year ahead. - The long-term outlook for the Australian economy is also bright reflecting Australia’s exposure to high growth Asia, strong population growth, low public debt, and a reasonably healthy financial sector. - This provides a relatively favourable backdrop for Australian assets.
View The Australian economy - heading into a better place (PDF - 459 Kb)
