Chris Caton, Chief Economist at BT Financial Group, presented his economic preview for AIM NSW & ACT this week. "Share markets are still slightly cheap" is just one of the key findings. Read more in the attached slide show.
5. Real GDP growth in Australia and the US
Year to % change
10
US
Australia
7.5
5
2.5
0
-2.5
-5
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Source: Datastream
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6. Australia’s Terms of trade
(Index 1900-01 to 1999-00 = 100)
Index Index
200 200
180 180
160 160
140 140
5-year centred moving average
120 120
100 100
80 80
Budget forecasts/
projections
60 60
1869-70 1894-95 1919-20 1944-45 1969-70 1994-95 2019-20
Source: ABS Catalogue Number 5206.0, RBA and Treasury.
26. Global Medium-Term Economic Growth and
Inflation Prospects (2012-2022)
GDP Inflation
Australia 3.0 2.6
Norway 2.7 1.9
New Zealand 2.6 2.3
United States 2.5 2.3
Sweden 2.2 1.7
Canada 2.1 2.0
United Kingdom 1.8 2.8
Netherlands 1.6 2.2
Switzerland 1.6 1.1
Spain 1.6 2.1
France 1.4 1.9
Germany 1.4 2.1
Eurozone 1.1 2.0
Japan 1.1 0.7
Italy 0.5 2.1
Source: Consensus Economics
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27. Asia-Pacific Medium-Term Economic Growth and
Inflation Prospects (2012-2022)
GDP Consumer Prices
India 7.2 5.9
China 7.1 3.0
Indonesia 6.1 5.7
Philippines 5.2 4.4
Malaysia 4.8 2.3
Thailand 4.4 3.0
Singapore 4.0 2.7
Taiwan 3.4 2.1
South Korea 3.4 2.7
Hong Kong 3.3 3.1
Australia 3.0 2.6
New Zealand 2.6 2.3
Japan 1.1 0.9
Source: Consensus Economics
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28. Morgan Stanley Capital Indexes
Developed Index Asian Emerging Markets Index
3600 600
3300 550
3000 500
Asian Emerging Markets Index (RHS)
2700 450
2400 400
2100 350
1800 300
1500 250
1200 World Developed Index (LHS) 200
900 150
600 100
03 04 05 06 07 08 09 10 11 12 13
Source: Datastream
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29. Summary
Eurozone debt is a serious issue; it will drag on for a long time but
is unlikely to end in catastrophe. We will always worry about China.
Fiscal cliff issues have been delayed for a few months.
The Australian economy should continue to experience moderate
but unbalanced growth, led by mining investment. The mining boom
will, of course, end eventually.
The cash rate is likely to fall again.
The exchange rate is above fair value. The rest of the world is still
on sale for Australians.
Share markets are still slightly cheap.
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30. This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’
and is for general information only. Every effort has been made to ensure that it is accurate,
however it is not intended to be a complete description of the matters described. The
presentation has been prepared without taking into account any personal objectives, financial
situation or needs. It does not contain and is not to be taken as containing any securities advice
or securities recommendation. Furthermore, it is not intended that it be relied on by recipients
for the purpose of making investment decisions and is not a replacement of the requirement for
individual research or professional tax advice. BT does not give any warranty as to the
accuracy, reliability or completeness of information which is contained in this
presentation. Except insofar as liability under any statute cannot be excluded, BT and its
directors, employees and consultants do not accept any liability for any error or omission in this
presentation or for any resulting loss or damage suffered by the recipient or any other
person. Unless otherwise noted, BT is the source of all charts; and all performance figures are
calculated using exit to exit prices and assume reinvestment of income, take into account all
fees and charges but exclude the entry fee. It is important to note that past performance is not a
reliable indicator of future performance.
This document was accompanied by an oral presentation, and is not a complete record of the
discussion held.
No part of this presentation should be used elsewhere without prior consent from the author.
For more information, please call BT Customer Relations on 132 135 8:00am to 6:30pm (Sydney
time)
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