Joint Statement by Baillieu Limited Chairperson David Trude and Managing Director Gavin Powell

Read Statement

The Fiscal Cliff, RBA Confidence and Vaccines

Yesterday was a significant day for Australian equities for three reasons:

  1. Removal of the fiscal cliff: The Federal Government extended its JobKeeper and JobSeeker programs at a cost of A$20.4 billion, or ~1% of GDP. This removes fiscal cliff fears, lifting confidence.
  2. Reserve Bank of Australia (RBA) Governor Philip Lowe’s confidence-building speech: Governor Lowe highlighted Australia’s strong relative performance – on both health and economic metrics – and strong relative fiscal position. He signalled a further large rise in the RBA’s balance sheet, already up 5.8% of GDP, and openness to added policy support if needed.
  3. Positive progress on a vaccine(s): Positive efficacy and safety results were reported for three of the over 20 vaccines for COVID-19 currently in advanced human testing. In our view, the likelihood of a positive vaccine result by early next year is relatively high.

These developments add to our bullish outlook for the Australian equity market, and we lift our 12-month ASX 200 index target from 6500 to 6750. The market should be driven by a V-shaped economic recovery, driving a strong earnings recovery, and extreme liquidity and policy support.

Download the Full Report below for the Twelve stocks set to benefit from low rates in a V-shaped recovery.


By submitting your email, you understand that E. L. & C. Baillieu may use your email to invite you to investment briefings or investment webinars or for other marketing purposes. You can unsubscribe from this list at any time by clicking unsubscribe on any E. L. & C. Baillieu email you receive.

Back To Top