On 14 February, the FIIG Research team held a webinar to discuss their recently released 2019 Credit Outlook.
The Credit Outlook is a five part series consisting of a macro overview as well as reports on four individual sectors, with coverage of 29 comprehensive reports on specific securities. The 2019 Credit Outlook reports are available on our website.
The webinar was hosted by Asmita Kulkarni, Director in our Investment Strategy team, and the presenters included Thomas Jacquot – Head of Research, Andrew Mayes – Associate Director of Credit Research for Financials and Will Arnold – Director of Credit Research, for Industrials and Corporates. Between them, they have over 50 years’ experience in the fixed income markets.
The discussions started with an overview of the key themes in our Macro credit outlook and also touched on the key market events over the last two months. The FIIG Research team’s suggestions to favour diversification and invest with conviction are even more relevant in the current market environment.
Following on from the Macro outlook, Will discussed his views on the Industrials and Infrastructure sectors. He has maintained a Neutral outlook on the Industrials sector but has an Overweight recommendation on the Infrastructure sector, which should demonstrate stability in the current environment where a market correction is likely. Historically, in the event of a downturn, governments have typically boosted infrastructure investment to boost economic growth.
Andrew shared his views on the Property sector, which has been a hot topic in the media recently, with falling house prices in a number of major cities, further pressured by large supply of new dwellings expected to come on to the market in the coming 12-24 months. These are the main factors contributing to our Underweight view on the sector.
Andrew highlighted that, while the fall in house prices and the findings from the Royal Commission continue to pressure credit and earnings growth for Financials, he expects the underlying credit fundamentals for Financials to remain sound in 2019. Andrew also outlined why he favours Financials, but on a selective basis.
Finally, the team answered a number of participant questions, providing additional insights on their views of RMBS securities, the value of Hybrids and allocations to investment grade securities at this point in the cycle. The Q&A session was highly informative and engaging.
To listen to the Webinar in full, click the link below.
https://fiig.com.au/events/2019-credit-research-outlook---webinar-recording/
If you have any questions or would like to discuss this further please call 1800 01 01 81.