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Yield to drive 2013 performance: Platypus

Rachael Micallef  |  12 Dec 2012Text size  Decrease  Increase  |  

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Rachael Micallef is a journalist with InvestorDaily, a Sterling publication.

 

Returns will continue to drive performance for investors in the new year, according to Platypus Asset Management.

While yield was a major theme in 2012, the asset manager said it would remain a key performer for the investors and the banks following into 2013.

"Yield is not a new theme but we think the investor hunt for it will continue, and it will continue to drive the performance of the banks," Platypus founder and chief investment manager Donald Williams said.

"We also think that emanating offshore activity is likely in this sector, which will help drive the return."

In addition, the asset manager has said earnings growth would be an important factor in 2013, despite company earnings generating a disappointing performance over the last few years.

While the overall market valuation remains conservative over the early months into 2013, Platypus has said the end of the mining boom will see the move towards an earnings upgrade cycle.

"We've been in a down cycle since late 2010, and there is absolutely no reason to think that will resolve in the next three months," Williams said.

"Just looking six to 12 months out, we think we will move into an earnings upgrade cycle. A key reason for that is the drag on performance of the aggregate numbers from mining ... that will be well and truly over."

While the market still remains unstable, improving global conditions and a lowering domestic currency will make 2013 a profitable year for some investors.

"It really is a stock-picker's market," Williams said.

"There are a lot of potholes in the market in terms of the sectors struggling to grow their profits, and even in some of those more challenged sectors you can still find the names of companies that are growing."