MARKET TALK: Downgrades Priced Into Aussie Equities -Citi

15th Jun 2010 02:20

0120 GMT [Dow Jones] Earnings downgrades have been priced into the Australian equity market, so current market levels are a genuine buying opportunity, according to Citi analysts. "We believe the equity market is currently pricing in almost no earnings growth over the next year," says Citi. "With earnings expected to grow by 25% over the coming 12 months, a significant buffer exists before earnings downgrades erode away the market value." Among major stocks expected to outperform as global macro fears subside, Citi includes ANZ (ANZ.AU), Rio Tinto (RIO.AU), Newcrest (NCM.AU), Stockland (SGP.AU) and AGL Energy (AGK.AU). Major stocks that Citi says are likely to underperform if market wide downgrades gather pace include BHP (BHP.AU), Wesfarmers (WES.AU), CSL (CSL.AU), News Corp. (NWS.AU) (owner of this news wire) and Amcor (AMC.AU). Index last down 0.2% at 4497.1. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires June 14, 2010 21:20 ET (01:20 GMT)