Share market 2019 looks to improve on last year’s heavy falls

Written by The ReReport
As seen in the Source link, written by on 2019-01-04 14:00:05

Investors stung by the worst year for Aussie shares since 2011 should expect better returns in 2019, say advisers and economists.Many are forecasting a sharemarket rise of around 10 per cent, recovering last year’s overall fall of 6.9 per cent but not clawing back all the value stripped from shares since they hit 11-year highs in August.Volatility will continue in Australia and offshore but there are a few potential bright spots for investors.INVESTING: Shares or property – which did best in 2018?One of them could be the big banks, said David Middleton, an adviser and director at financial planners MidSec.“The royal commission exposed that our banks are not charities,” he said. “The bad publicity has seen the prices of all the banks fall to the extent that all the likely bad news — and more — is already in the price.”Mr Middleton said another area for potential growth in 2019 was Asian stocks, usually accessed through managed funds.media_cameraBank shares might become a surprising success story this year. Or not.“The drift in economic and political power from the West to the East that started over a decade ago is becoming a surge. China is probably the most important country in the world today.” Chinese shares slumped 25 per cent last year.Property and infrastructure companies such as Stockland Group, Sydney Airport and Transurban had also become cheaper and their income yields were rising, making these investments “now very attractive”, Mr Middleton said.He said investors were nervous after a disappointing 2018 and disconcerting news was still around. “Our view is that the medium-term future looks good.”AMP Capital head of investment strategy Shane Oliver said volatility was likely to remain high in 2019.“But ultimately reasonable global growth and still easy global monetary policy should drive stronger overall returns than in 2018 as investors realise that recession is not imminent,” he said, although he warned global shares could head lower in the coming months.“Australian shares are likely to do okay but with returns constrained to around 8 per cent with moderate earnings growth.”Dr Oliver said shares should do better than capital city house prices, which were expected to fall another 5 per cent nationally, led lower again by Sydney and Melbourne.CommSec chief economist Craig James forecast a shares rebound of 10-12 per cent his year, boosted further by dividends, as markets recovered from the fear of late 2018.However, Rivkin Securities consultant Adeel Minhas said several uncertainties still loomed, including “American political dynamics, global trade concerns, and Brexit”.@keanemoneyBIG GUNS MISFIRINGMany of Australia’s biggest and most widely-held stocks had a shocker in 2018. Here’s a selection:* AMP plunged 53%* Telstra dived 22%* NAB dropped 19%* Westpac sank 20%* ANZ tumbled 15%* Amcor lost 12%* CBA fell 11%However, there were some winners, including: * CSL surged 31%* BHP climbed 16%* Macquarie Group rose 9%Originally published as The shares tipped to bounce back