private client economic update

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    Expected some feedback on this post last night...

    I went to an Ord Minnett Economic update Today which was quiet good. Lot's of useful info. Some of the keys points were:

    1. US economy expected to pickup with weaker US$ and Greenspan's attempts to create inflation.

    2. Strongest international growth forecast in the world is for Asia(ex-Japan). Due to geo-political concerns South Korea may not be involved.

    3. Asia's governments now own 70% of global FX reserves. This has been causing the recent US Bond rally.

    4. Japan is still in trouble. The stock market is up as a side effect of the government is keeping the Yen down, but "real debt" is rising.

    5. Medium density housing in Australia will definitely fall in price. The number of medium density properties that come onto the market in 2004 will be 40% above normal levels.

    6. Due to Investor purchases, "Buy to Let" rental supply will be saturated in 2004 with a supply increase of 45% in NSW, 36% in Vic and 72% in Qld.

    7. When the differencial between current prices and yields is forecast back to its averaged historical ratio (for apartments) a 30-40% drop in price can be anticipated.

    8. The historical price weighted average for the AUD$ is about 65cents and they do not expect the AUD to exceed 70 cents (trading range of 63-68cents).

    9. They expect the current cyclical equities rally to continue for the foreseable future but do not see it as a bull (or bear) market. There will need to be a move down by the ASX200 due to PE ratios still being too high.

    10. Bond Yields should move higher.

    11. Industrial and commercial Property Trusts should contunie to deliver solid gains.

    12. If Greenspan is successful in creating inflation in the states, this may be a good time to lock into fixed interest rate loans.

    Let me know if you'd like me to expand on any of the above.

    Cheers
 
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