Australian Unity predicts equities rally in 2012

Barring any major shocks to the financial system, the ASX200 looks set to finish 2012 over the 5000 mark, according to Australian Unity Investment's (AUI's) Donald Williams.

Williams, who is chief investment officer at AUI's joint venture asset manager Platypus, said the Australian market was likely to remain "relatively subdued" throughout the first six months of 2012 as investors "achieve a level of comfort" with overseas issues.

But given the positive signs around the world, the latter half of the year could see a significant rally in Australian equities, he said.

The Chinese Government appears to have inflation under control, and there are signs that European policymakers are finally treating the sovereign debt issues "with the urgency they need", Williams said.

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"The data from the US is upbeat and we are about as certain as we can be that there will be no 'double-dip' recession," he added.

When it comes to global equities, Wingate chief investment officer Chad Padowitz said many global companies have good earnings and strong balance sheets.

"Therefore, they should be very attractive to investors, particularly because of the yield being offered on current prices," Padowitz said.

Many global companies are buying back their own shares as opposed to over investing with an eye to future growth, which will create good returns for investors - with US home improvement retailer Lowes being a good example, Padowitz said.