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SYDNEY, Feb 4 AAP

February 04 2013, 10:54AM

Argo Investments does not expect strong earnings growth from Australian companies this year, although investor confidence should improve.

The investment company gave its outlook on investment markets on Monday as it reported a fairly flat first half profit result.

Argo's net profit for the half year ended December 31 was $86.28 million, up from $85.76 million in the previous corresponding period.

Total investment returns from its portfolio of stocks were 16.3 per cent.

Argo chief executive Jason Beddow said while Australian stocks were relatively good value for long-term investors, there were question marks over company earnings.

"In general, we do not expect strong earnings growth from companies over the coming 12 months, which is likely to lead to only modest dividend growth," he said in a statement.

"However, we believe the overall yield available in the Australian equity market will remain attractive to investors."

Mr Beddow said the outlook for global investments markets was improving, but some challenges remained in the United States.

He said business and investor confidence was expected to improve following the federal election on September 14.

Further interest rate cuts by the Reserve Bank would also help stimulate consumer spending and business investment.

Argo maintained its interim dividend at 13 cents, full franked.

Its shares were three cents higher at $6.74 at 1035 AEDT.