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Season's Greetings

Brian Sheahan

What a year! With Christmas around the corner, we take this opportunity to look back on an eventful 2014. 

It has been fantastic to see investor confidence strengthen on the back of continued low interest rates and ongoing thirst for yield; an improving housing market; and weakening Australian Dollar.

While 2014 has been a volatile year in terms of market performance, the ASX 200 is likely to finish the year relatively flat. However, to put 2014 into context, the market has risen more than 30% over the last three years.

Against the market backdrop, we are proud of our Morgans Model Portfolios across Growth, Balance and Income all outperforming their relative benchmarks.

Despite the volatility from falling commodity prices and the downturn of mining investment, the market has had a very healthy appetite for new companies coming to market and secondary market capital raisings to fund growth.

The Healthcare sector benefited from a number of new companies joining the ranks with Healthscope, Japara, Regis Healthcare and fertility providers all joining the index.

To end the year we had the Government sell-down of Medibank which we were proud to be a Co-Lead Manager of and enabled us to provide our clients with this opportunity.

During 2014, Morgans has raised over $7 billion and provided clients with the opportunity to participate in 26 of the 58 Initial Public Offerings that listed in 2014. We will continue to deliver great investment opportunities to our clients and believe 2015 will provide just as many new opportunities to add to your portfolios.

In the year ahead, we expect the Australian market to rally as further evidence of a progressive recovery in earnings is seen. Michael Knox, our Chief Economist is forecasting the ASX 200 index to finish 2015 at around 6,100 points, which is 15% higher than current levels.

Our expectation is that the market will move higher overall and, as always, some sectors will outperform others. That is why in this Investment Watch Holiday Edition we include our key themes for 2015 on page 3 and our high conviction stocks are outlined in the closing pages. As always, speak to your adviser in relation to which stocks suit your investment goals.

For the Morgans team it has been an exciting year, with our Branch network expanding with the addition of two new branches, being Tynan Partners (Brisbane) and Bowral. This increases our total branches around Australia to over 60.

Our Chairman, Tim Crommelin was awarded the 2014 Northern Regional Champion of Entrepreneurship at the EY Entrepreneur of the Year awards. The award is given in recognition of sustained, outstanding entrepreneurial achievement and is a strong endorsement of Morgans and the dedication and energy Tim has devoted over many years in helping build our business from a small operation to the significant business it is today.

In 2014, we also launched our new media campaign 'hellomorgans' to build our brand awareness around Australia. You will see more of this initiative in 2015.

We would like to thank you for your ongoing support of the Morgans Foundation. In 2014, we had the great pleasure of supporting a number of charities including RSPCA, Cancer Research and Spinal Injuries. Please keep in mind, our small holdings initiative when reviewing portfolios which allows clients to dispose of unwanted shares for no brokerage with all money raised donated to our foundation.

From all the staff and management at Morgans we appreciate your ongoing support as a valued client of our business. Wishing you and your family a safe and happy festive season, and we look forward to sharing with you what we believe will be a prosperous 2015.

Yours sincerely,

Brian Sheahan signature

Brian Sheahan
Managing Director