3. The New ‘Normal’
Opportunities in a post-GFC world
ediscoveryconsulting.blogspot.com
Savanth Sebastian
Economist, CommSec, March 2011
4. Important information
This presentation has been prepared without taking account of the
objectives, financial situation or needs of any particular individual.
Before acting on the information in this seminar, you should consider its
appropriateness to your circumstances and, if necessary, seek
appropriate professional advice.
Commonwealth Securities Limited ABN 60 067 254 399
AFSL 238814 (CommSec) is a wholly owned but non-guaranteed
subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124
and a Participant of the ASX Group.
Examples used in this presentation are for illustrative purposes only.
5. State of Play
US recovers
but China dominates
Australia struggles
Budget under pressure
Aussie consumers..
Conservatism reigns
Tight job markets
but seniors win
Interest rates on hold
Aussie dollar strength
6.
7. So What?
Issue: Global economy Exchange rates, trade,
sharemarket, int. rates
Drivers of world economy -
Contribution to growth 2011
China 0.81%
United States 0.74%
India 0.18%
Japan 0.14%
Newly Industrialised Asia* 0.13%
Germany 0.13%
ASEAN 5 # 0.12%
Brazil 0.11%
Russia 0.10%
United Kingdom 0.08%
France 0.07%
Canada 0.05%
Other countries 1.70%
World 4.40%
Source: IMF & CommSec
* Newly industrialised Asia – Hong Kong, Taiwan, Singapore
and South Korea
# ASEAN 5 – Indonesia, Malaysia, Thailand, Philippines and
Vietnam
11. So What?
Issue: Climate Retail, transport, agriculture,
insurance, construction
Highest levels for the
Southern Oscillation Index
(SOI)
August 1917 34.8
April 1904 31.7
November 1973 31.6
December 2010 27.1
June 1950 26.9
Source: BOM & CommSec
13. So What?
Issue: Mining boom Interest rates, investment,
economic policy
Drivers of the Australian economy
2007 – 2010, % contribution to the
change in GDP
Mining 17.4%
Professional, scientific and technical 11.9%
services
Construction 11.6%
Financial and insurance services 10.8%
Agriculture, forestry and fishing 10.8%
Healthcare and social assistance 9.7%
Education and training 5.1%
Public administration and safety 5.1%
Transport, postal and warehousing 3.8%
Wholesale trade 3.5%
Source: ABS & CommSec
26. CommSec forecasts
Forecasts
Economic growth 2.75-3.00% in 2010/11 3.50% in 2011/12
Inflation 2.75% in 2010/11 2.75%-3.00% in 2011/12
Unemployment 4.75-5.00%, mid 2011 4.25-4.50%, end 2011
Cash rate 5.00%, mid 2011 5.50%, end 2011
Sharemarket 5,100 points, mid 2011 5,400 points, end 2011
(Australian)
Australian dollar US99c in June 2011 US92c in December 2011
29. Important information
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30. March Economic Health Check
Ideas and Strategy around minimising
Interest Rate and Foreign Exchange Risk
