\n\tBy Greg Peel<\/p>\n
\n\tMacquarie's global equities team believes indications are for a positive April for world equity markets, with the US looking the most positive. Valuations are not strong in the US, but earnings momentum and improving economic growth provide support.<\/p>\n
\n\t“Although investors have turned cautious in the past couple of weeks,” say the analysts, “world growth will continue to recover and data flows should continue to reassure. The market's resilience in the face of disaster in Japan and the downgrading of Portugal also lends confidence to this view”.<\/p>\n
\n\tBut if Australian investors are heartened by this opinion, they shouldn't be as far as Macquarie is concerned. A rather blunt “Australia is not looking attractive” is as much detail as Macquarie offers.<\/p>\n
\n\tThat doesn't mean Macquarie's local equity strategists have no conviction, and this morning they updated their preferred portfolio of stocks which they see as Buy or Sell “with a bullet”. The one change is the removal of BHP Billiton ((BHP)) in exchange for Rio Tinto ((RIO)).<\/p>\n
\n\tThe broker still rates both stocks Outperform but believes Rio's negative short term momentum has now dissipated. The stock is trading at a 25% discount to the broker's core net present value and even if you remove the low-return aluminium business, it's still a 10% discount.<\/p>\n
\n\tThis leaves Macquaire's Buy (Outperform) convictions as Rio, Santos ((STO)), and Westpac ((WBC)) in the leaders, CFS Retail ((CFX)), Charter Hall ((CHC)) and Lend Lease ((LLC)) in property and Beach Energy ((BPT)), Mermaid Marine ((MRM)) and SAI Global ((SAI)) among the emergers.<\/p>\n
\n\tMacquarie's Sell (Underperform) convictions are the ASX ((ASX)) and Boral ((BLD)).<\/p>\n
\n\tUBS also has Rio in its conviction list and not BHP, but just to confuse it has today added Boral. UBS is anticipating building product price rises from the company shortly that will be successfully passed on. UBS also expects Brambles' ((BXB)) IFCO transaction to close in April and sees this as a positive catalyst. Hence Brambles has also been added.<\/p>\n
\n\tUBS has removed JB Hi-FI ((JBH)) but only because of the share price jump post the buyback announcement.<\/p>\n
\n\tThe UBS (Buy) conviction list now includes Asciano ((AIO)), Boral, Brambles, CSL ((CSL)), Graincorp ((GNC)), Qantas ((QAN)), Rio and Tabcorp ((TAH)).<\/p>\n
\n\tGoldman Sachs has not made any changes to its conviction list, which is made up of Aquarius Platinum ((AQP)), CFS Retail, Iluka ((ILU)), News Corp ((NWS)), PanAust ((PNA)), United Group ((UGL)), Wesfarmers ((WES)) and, wouldn't you know it, BHP (but not Rio).<\/p>\n
\n\tMarch was not a good month for the portfolio, however, underperforming the index by 2.8%. Nationalisation of industry in Zimbabwe did not do Aquarius any favours, for one. But the GS portfolio has returned an excess 41% since June 2006 so we might forgive them one off month.<\/p>\n","protected":false},"excerpt":{"rendered":"
As we enter the June quarter, brokers have begun reassessing those stocks for which they hold a high Buy or Sell conviction.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57933"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57933"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57933\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57933"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57933"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57933"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}