A Fitch (the ratings agency) survey of Australian fixed-income investors (represents the views of managers of an estimated AUD180bn of fixed income assets, three-quarters of the Australian domestic real-money market):
- The investors are mindful of several external risks but expect economic conditions to support a mild improvement in credit across 2014
Not surprisingly (a polite way of saying “Well, d’uh”):
A hard landing in China came top of a list of risks posed to the Australian credit markets, with a third of respondents ranking it as a high risk.
Then:
- Financial stability in the Eurozone also ranked highly. However, a majority of investors (67%) felt stability was sustainable over the next 12 months.
- More than 75% of investors surveyed expected fundamental credit conditions to remain stable or improve despite external risks
- Respondents expect house price growth to moderate over the next three years, although they remain bullish for 2014 with 53% expecting rises of between 5% and 10%
- Around 80% of investors see the Australian unemployment rate rising to no more than 6.5% over the next two years
- Majority of investors surveyed believe corporate balance sheets will become less defensive over the next 12 months
- More than 70% expect bank lending conditions to loosen moderately in the corporate and retail sectors
There is more at www.fitchratings.com (may be gated)
Via Reuters and MNI