Goldman Sachs says buy Australian shares
Surging global volatility that has left seldom a market untouched this week has cast a light on an old faithful: high yielding Australian equities.
In an Asia Pacific strategy note, Timothy Moe, a highly respected Goldman Sachs Asian equity analyst, said high yielding Australian shares looked attractive in a region unsettled by China’s plunging sharemarket.
“A shock to growth expectations and faltering confidence in policy are at the centre of a self-reinforcing downward price dynamic in regional equities, which have fallen into bear market territory,” Mr Moe said.
The catalyst for improvement would be stable-to-better economic data from China but key data was more than six weeks away, he said.
A flight to dividend-paying stocks is among Mr Moe’s moves in the uncertain Asian financial landscape, with Australia firmly in view with the themes of stable growth and dividend yield.
Mr Moe said Australia’s sharemarket, with a dividend yield of 5.1 per cent, eclipsed its regional peers. Australian companies also have a relatively low debt to equity…
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