ASX 200 updates

by Raymond Chan

In our April edition (24 April 2015), we downgraded the ASX 200 valuation on the back of (1) earning downgrades and (2) rising bond yield. Since, the ASX 200 fell from 5,935 points to today’s 5,667 points (the low was 5,574 points in 20 May 2015).
Upcoming events to watch;
·          The potential collision between the Greek government and their creditors
·          Conference season which usually brings 'confession season' ahead of EOFY results
·          Property, Utility and Infrastructure trusts going ex-Distribution
·          Possible tax loss selling
·          A very strong IPO pipeline
Correction always creates Opportunities. No one rings bell at market bottom.
We ran thru a number of “Price vs Valuation” charts on ASX 100 stocks and found CBA and LLC as stocks to buy. CBA was trading on overvalued territory but recent correction took the stock back to deep discount to valuation since 2010. Unless CBA is unable to maintain some earning growth, this looks to be a good entry level.  



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