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Australian Investment Opportunities for 2019

Thursday, December 20, 2018

As the year draws to an end we look at the forecasts for 2019 and the many Australian investment opportunities available.

Domestic Outlook

2019 is looking cautiously optimistic for the domestic economy with an expectation that, at least for the first half of the year, macroeconomic indicators such as population growth and unemployment will remain relatively stable.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services saw a negative impact on share prices in the financial sector in 2018. The Commission is set to release its final recommendations in February 2019. This may have further repercussions for the finance market. However, there is scope for banks to over perform due to their current low price to earnings ratio.

Early 2019 is expected to see the next federal election in Australia, which history shows us can have an impact on share markets.

The continued acceleration of the global macroeconomic environment and the excellent health of corporate balance sheets have positioned industry for acquisitions and mergers. The low Australian dollar is making our market more attractive for overseas buyers.

Industries Outlook

Although the arrival of Amazon in Australia impacted the domestic retail environment, the current good health of the Australian economy should see the recovery of consumer discretionary stocks.

Demand for innovative battery commodities remains a hot topic with Australian companies wading in and exploring cobalt, lithium, and other battery-related commodities.

It may seem like a stretch, but with Uber promising they'll have their first air taxis in the market and operating out of Los Angeles Airport by 2020, this industry may be going places. Other predictions indicate that the first flying cars will be available within the next five years.

Closer to home, Australian company Alauda has already built its first drone-style prototype, the Alauda Mark 1 Airspeeder. It’s a racing car shaped quadcopter. They've also announced their plans to host the world's first 'flying-car' race next year.

AI is on a growth path as it slowly invades more of our lives, moving from managing our calendars to smarter technologies such as AI voice assistants and smart speakers. This increasing growth and connection of our daily lives to the internet will drive the need for further security and data privacy, making this a guaranteed growth area.

Innovative food technology is seeing growth as we become more aware of the sustainability and nutritional value of our food. Urban farms and vertical farming are top of the list, as well as other technologies which help grow food faster and with less spoilage.

Offshore Expectations

Companies in the US are expected to experience continued growth as the US Federal Reserve continues to lift interest rates throughout 2019. The macroeconomic outlook for the US hasn't looked this good since the financial crisis. However, the possibility of continued rate rises in the US is expected to have a negative impact on assets.

China’s continued efforts to improve their domestic economy, promote low-cost exports, innovation and private investment as well as its war against pollution, leaves it with an optimistic outlook.

As you review your investment plans for 2019, remember PrimaryMarkets is here to help facilitate your off-market transactions. Our experienced team can assist you in identifying relevant funding and investment opportunities. Contact us to discuss your options.

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