Investor update

You should always consult your Bridges financial planner before taking action on any recommendation given.

Information current as at 31 May 2009

Global equities started the month well, but then spent the rest of the month drifting sideways. Nevertheless, most major market indices managed to post reasonable gains for the month. Globally, Resource stocks (both Energy & Mining) and Financials were the clear outperformers.

The Australian share market completed its first consecutive three-month gain since the fourth quarter of 2007 in response to increasing evidence suggesting that the global economy is past its worst phase this cycle. Risk appetite increased across the market while select corporates announced further capital raisings in order to take advantage of improving sentiment and the opportunity to acquire assets at depressed levels. In anticipation of the financial year-end, a number of companies reiterated earnings guidance which provided comfort to investors, although others such as Leighton holdings, lowered expectations.

The 2009-10 Australian Federal budget was unveiled in May and held few surprises. The Government projected a deficit of $57.6bn in the coming year, or 4.9% of GDP compared with 2.7% in 2008-09. The reserve bank held its cash rate at 3%, as expected. Employment data reflected a surprising drop in the jobless rate in April from 5.7% to 5.4%.

The best performing sectors for May were Materials (+6.6%), Energy (+6.4%), REIT’s (+3.8%) and Industrials (+2.2%).

In stock trading news, standout performers for the month were ING Office Fund (+31.0%), GPT Group (+28.4%), Incitec Pivot (+27.5%), BlueScope Steel (+26.9%) and Worley Parsons (+23.2%).

This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making any investment decision based on the information or advice contained, expressly or implicitly, in this website, you should assess your own circumstances or seek advice, including taxation advice. To the extent permitted by law, Bridges, its officers, employees, agents, consultants, advisers and representatives are not liable for any loss or damage as a result of any reliance placed on the contents of this website.