Positive outlook for Aussie shares in new financial year
In positive news for SMSFs, CommSec expects Australian equities to see further increases during the 2015/2016 financial year, with economic growth predicted to be firmer.
In its economic report, Economic Insights: A Year of Consolidation, CommSec predicted the All Ordinaries index would be at between 5,800 and 6,000 points by the end of December 2015 and between 6,000 and 6,200 points at June 2016.
Commonwealth Bank, general manager for SMSFs, Richard Harris told SMSF Adviser the outlook for the economy is encouraging.
“Given SMSFs have collectively invested $244 billion in direct shares which accounts for 41 per cent of total SMSF assets, and we’re expecting the record expansion to continue in 2015/2016, this is positive news for SMSF holders,” said Mr Harris.
CommSec chief economist Craig James said daily sharemarket volatility lifted late in 2014/2015, with “the Greek debt crisis and rising bond yields”.
“Interestingly, the difference between highs and lows for the sharemarket in 2014/2015 was just 17.1 per cent – the least volatile year in 14 years,” he said.
“Looking ahead, the sharemarket is likely to remain volatile on a daily basis early into the 2015/2016 year as the Greek debt situation finds some resolution.”
Mr James added that the Sydney and Melbourne residential property markets are supported by strong population growth (both above decade averages), low interest rates, interest from foreign investors and relatively tight rental markets – especially Sydney.
“But over 2015/16, the higher home prices will choke off some demand and lead to higher investment in equity markets,” he said.
“Overall, the outlook for the economy is encouraging, notwithstanding global challenges. Interest rates are super low and business does appear to be responding to a stimulatory Federal Budget.”