Asian-based fund managers are reporting a growth in interest from global investors in Australian shares amid expectations that the federal election outcome will produce a more stable investment landscape, according to The Australian.
Hong Kong-based Trafalgar Capital senior portfolio manager Michael Millard said foreign investors are seeing a boost in sentiment towards Australian shares as a result of the coalition victory, adding that the Labor leadership squabbles created “a lot of concern [among Asian investors] about the political instability”, the newspaper reported.
“That probably put them off and it didn't reflect well in terms of investing down there,” he told The Australian.
“We now have a majority government hopefully with clear decisions, so the political environment has removed the excuses (not to invest).”
The election result and the Australian dollar's broad decline so far this year, despite recent gains on its part, have combined to make Australia a more attractive destination for foreign investors.
“Fund managers are starting to consider whether they close what has been a two-year underweight position on Australia,” Macquarie's Hong Kong-based head of Australian and New Zealand equities Scott Dolling told The Australian.
“There was a perceived increase in regulatory risk in most industries in Australia [under the Labor government], and that may have been keeping investors away ... While there may be more downside [on the Australian dollar] there's certainly been some froth come out of it and investors are a little more comfortable.”
Australian shares closed at a five-year high on Wednesday and fresh data showed that consumer confidence in Australia is at its highest since 2010.