Australian small companies outlook for 2023
Montgomery Investment Management
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Welcome to our first edition of Montgomery’s newsletter for 2023.
After a tough 2022 for investors, in this edition Michael Gollagher provides an outlook for the small caps sector for 2023. If we do in fact see only two further rate rises from the RBA and inflation is contained, will we see a rally in Australian equities? And Sean Sequeira identifies why Newcrest Mining represents an opportunity for medium term earnings growth driven by material increases to copper and gold volumes.
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AUSTRALIAN SMALL COMPANIES OUTLOOK FOR 2023
The Australian Small Ordinaries Index return for calendar year 2022 was negative 20.7 per cent however the index is up 6.55 per cent since 1 January to 1 February, with some companies bouncing as much as 30 per cent. Moving to our outlook for 2023, there are reports we may see?interest rates?start to fall in late 2023, which would be a tailwind for equities, in particular growth names which had the toughest performance over 2022.?What can we expect from small caps in the year ahead??
COULD NEWCREST MINING BE READY TO BOUNCE?
Newcrest Mining (ASX:NCM) has long been synonymous with the Australian gold mining industry however the share price has been somewhat disappointing for the last few years. That could soon change if the recent recovery of gold price continues, recent corporate actions start to bear fruit and if investors start to take note of the company’s significant copper assets. Sean Sequeira discusses the outlook for medium term earnings growth.