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'80s excesses 'damage' image
SYDNEY: The Australian stock
market should continue to outperform
major world markets over the next 12
months, and is likely to provide returns
of 20 per cent over the period, according
to a leading global investment chief.
But the managing director of the UK
based Barclays de Zoete Wedd Invest
ment Management, Ron Gould, said
Australia's image has been irreversibly
damaged by its failed entrepreneurs, and
foreign investors would never again re
weight as heavily into the market.
"Because of the excesses of the late
'80s, in the minds of many international
investors Australia became marginalised
relative to where it used to be," he said.
Mr Gould is responsible for the global
management of more than $65 billion
worth of assets in 19 countries.
He said the Australian market was
expected to grow by 15 per cent to about
1800 points by September, 1992, boosted
by a recovery in the domestic economy
and a 20 per cent lift in corporate profits
in the current fiscal year.
The local ordinaries index is trading
just below 1700 points. An average re
turn of 5 per cent in dividends would
bring the total return on funds to 20 per
cent over the period.
Mr Gould said the strength in the local
market would be underpinned over the
next 10 years by a huge influx of pension
and superannuation funds.
He said over a 10-year view, the best
risk return portfolio would run on 35 per
cent international equities. However, he
was currently recommending a 20 per
cent weighting because of the potential
for returns in the Australian market over
the next two years.
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