Just on the same topic, the AUD is currently buying 81.4 USD - still very high and makes Australia uncompetitive at the global level. Furthermore, to attract foreign investors, they would need a sense that the AUD would stablise or form a bottom (otherwise, they will fear that their investments will devalue as the AUD continues to depreciate) and it is unlikely that the AUD has hit a bottom. Historically, on average, the AUD traded at .77 USD - now Australia is in a position where AUD needs to come down to stimulate/maintain our economy to compensate for the mining downturn which warrants an AUD to be lower than the long-term average. I.E. AUD will trade at .7x or even .6x USD and the RBA has stated that it wants to see the AUD at low levels for a sustained period of time.
- our healthcare industry, with their bulk of their revenue overseas (e.g. CSL, SIRTEX, RESMED, COH) will benefit from this. I think someone posted a chart/index of the different sectors and showed the healthcare sector outperforming every other sector on the ASX - market accounting for the depreciating AUD.
Personally, I strongly favour investing in the Shanghai composite (via Hang Seng) - despite the recent rally, evaluations are still below the all time average for their index whereas US stocks are trading at valuations near all time high. Will also get you the same benefit from AUD depreciation.
Just a comparison of valuations: Sydney airport (mentioned by 3500) trades at 50+ PE with an ROE of 10% whereas shanghai airport trades at 18.5 PE with 11.6% ROE. SSE50 trades at something like 10 PE whereas ASX200 trades at 15+ PE (i think). Way more examples but wont bore anyone with them.
Agree with Keygeo - Always nice keep a broad perspective on the global stockmarket - no harm anyways
