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Australian shares to pick up amid rosy prediction

Xinhua, June 22, 2015 Adjust font size:

Investors of Australian shares are in like for a pick up in returns as Australia's economy accelerates in the next financial year, a Commomwealth Securities (CommSec) analyst predicts.

CommSec is operated by the Commonwealth Bank of Australia (CBA). Its Chief Economist Craig James told local media on Monday that the 2015/16 Australian financial year is tipped to be better for the country's share market, noting that total returns would probably be about 10 percent to 12 percent.

"I think we're going to get close back to normal," James said.

James said a pick up in Australian stocks would depend on whether economic growth increased to around three percent, which would boost business revenues and profits.

Total returns on locally listed shares are currently up 8.2 percent over 2014/15 Australian financial year, below the 20-year average of 10.8 percent.

However, Australian shares have underperformed against returns on property, which have lifted 13.3 percent, while returns on government bonds are up 6.5 percent.

James tipped growth-focused stocks like banks and materials improve in Australian financial year 2015/16, with the All Ordinaries index expected to be trading around 6,000-6,200 points in June 2016.

However, the Australian dollar remains a key uncertainty, having fallen by about 18 percent in Australian financial year 2014/15.

"While we're expecting the Aussie dollar to be little unchanged at the end of the year. We've always got to be mindful that the currency can move by something like 13 or 14 cents over a year," James said.

The Australian financial year runs July 1 to June 30. Endi