Key market themes for 2017

About the author:

Author name:

By Andrew Tang

Job title:

Analyst - Equity Strategy

Date posted:

03 April 2017, 8:36 AM

Sectors Covered:

Equity Strategy and Quant

Equity markets remain at the mercy of abnormal macro-economic conditions such as unconventional central bank interest rate settings and heightened political uncertainty. Making bold portfolio decisions amid such uncertain conditions is a difficult and potentially hazardous exercise; hence our cautious Asset Allocation settings.

Despite these challenges, we think that enduring investment themes are worth following in the year ahead. These themes help frame our Asset Allocation strategy, and we highlight these (and the best stocks to leverage them) below:

Our ten key investing themes and how to play them

1. A US cyclical recovery drives interest rates upwards – QBE Insurance Group (QBE), Computershare (CPU)
2. Rising domestic energy prices – AGL Energy (AGL), Infigen Energy (IFN), Senex Energy (SXY)
3. Resources cashflow resurgence – BHP Billiton (BHP), Rio Tinto (RIO), South32 (S32), Oil Search (OSH)
4. Diversify internationally – our recommended LICs and ETFs
5. Inbound tourism – Sydney Airport (SYD), Mantra Group (MTR), Helloworld (HLO), Apollo Tourism and Leisure (ATL), The Star Entertainment Group (SGR)
6. Rise of the Chinese consumer – Treasury Wine Estates (TWE), Blackmores (BKL), Bellamy's Australia (BAL), The A2 Milk Company (A2M), Capilano Honey (CZZ)
7. Smarter healthcare and the empowered consumer – ResMed Inc (RMD) and Volpara Health Technologies (VHT)
8. Retail disruption and the Amazon threat – Beacon Lighting (BLX), Lovisa Holdings (LOV), Bapcor (BAP), Qube Logistics (QUB)
9. The push for financial deregulation – Westpac Banking Corporation (WBC), US Banks (ASX: BNKS)
10. The digital marketplace – NEXTDC (NXT), Vita Group (VTG), Megaport (MP1)

More information

Morgans clients can access further details on our investing themes by viewing our Key market themes for 2017 research report. If you are interested in becoming a Morgans client or would like more information, please contact your adviser or nearest Morgans office. 

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.