Page 5 - PSK Q2_2022_Thomas Ilinkovski
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Market mounting global recession concerns which
do not seem to be abating (quick enough).
commentary The fallout has basically been mass
hysteria, with central banks, including the
RBA, scrambling to control rising inflation
Below is a summary and highlights from with higher-than-expected rate hikes. This
the movements this quarter and major has played havoc with Australia’s most
changes to some of the key asset areas: important sector, the housing market
Australian equities where fixed rate mortgages due to roll-over
into higher variable rates will potentially
The Australian equity market (as measured increase the downside risk to prices
by the S&P/ASX 200) recorded its biggest (declines have been steadily increasing)
monthly decline since March 2020, falling and more importantly the construction
(-8.8%) in June to extend its quarterly loss sector and consumer spending. Hopefully
to (-11.9%), its worse loss since the March the re-opening of Australian borders will
quarter 2020. Fearing aggressive monetary pave the way for the increase in net
tightening policy and the risk of recession, migration overseas students.
every sector bar two (Energy and Utilities At the sector level, as expected, the
eking out small gains) were violently sold- Energy sector (+1.7%) and the defensive
off as fundamentals were tossed aside and Utilities sector (+1.7%) were the only two
indiscriminate selling took control. The sectors to be in the black for the quarter.
June quarter was again dominated by the Best performing of the rest included
conflict in Russia and Ukraine which added Industrials (-1.4%) and Healthcare (-1.9%).
further fuel to the ever-increasing The biggest laggard, as longer-duration
geopolitical tensions occurring globally, growth assets were sold-off because of
China forcing mass lockdowns of major interest rate hikes was Information
hubs due to further Covid outbreaks and Technology (-27.2%). Rising rates and the
