Australian Market still on the rise
Tim Schroeders, Investment Research Department – Australian Unity Personal Financial Services article explains why we expect the Australian sharemarket to continue to provide healthy returns for investors in the medium to long term
The Australian sharemarket finished the 2017/18 financial year with a solid gain of 13%.
A favourable global macro-economic backdrop provided the tailwind for this result, in particular:
Our inflation remains benign at 1.9%.
Our unemployment is steady at 5.4%.
Australia’s GDP growth rate of 3.1% is solid.
The Australian economy and Australian companies have benefitted from improving global economic growth.
A lower Australian dollar has been supportive for tourism and education-related companies along with exporters, and increased interest from offshore corporates looking at acquiring Australian companies.
Interest rates in Australia remain low, and are unlikely to move meaningfully higher in the next 12 months.
These tailwinds should continue for some time, however there are also potential headwinds going forward for the Australian sharemarket.
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