More foreign capital steps in to snap up bargains.

Australian stocks ripe for picking, says fund manager

Date
October 6, 2014 - 11:36AM

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Sally Rose

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"The September selloff in Australian assets is something we had been waiting for.": T Rowe Price's Randal Jenneke.

Photo: Jessica Hromas/Getty Images via Fairfax Media


The man on the ground for one of the world's biggest funds management firms, T Rowe Price, says the dramatic selloff in Australian currency and sharemarkets over the past five weeks means it is a good time to snap up Australian stocks.

"When the Australian dollar drops, then Aussie stocks start to look more attractive. Some people may feel queasy when both drop together, but I feel excited," Randal Jenneke said.

As head of Australian equities, Sydney-based Mr Jenneke is responsible for managing a $120 million portfolio on behalf of local clients, as well as advising on the $US3 billion ($3.5 billion) that T Rowe Price has invested in Australian equities on behalf of offshore investors. Globally, the firm has $851 billion under management.

Over the past five weeks the Australian dollar has plunged 7 per cent against a strengthening US dollar. Over that same period the benchmark S&P/ASX 200 Index is down 5.5 per cent, after wiping off 6 per cent in September, and is now trading below where it began 2014.

"The September selloff in Australian assets is something we had been waiting for," Mr Jenneke said.

"Globally markets are starting to price for an eventual rise in US interest rates, and that is a good thing. The longer rates stay low the greater the risks of asset bubbles forming."

He thinks the local market will avoid entering a technical correction, as defined by a drop of 10 per cent or more, over the coming weeks as more foreign capital steps in to snap up bargains....

Read more: http://www.smh.com.au/business/markets/australian-stocks-ripe-for-picking-says-fund-manager-20141006-10qre6.html#ixzz3FM81zugT​