Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Macroeconomics

<ul><li>The RBA's statement accompanying yesterday's decision to leave interest rates unchanged and a speech by the Governor last night confirm the extent of the central bank's anxieties about the property market.  Mr Lowe noted that too many loans are still made where the borrower has the skinniest of income buffers after interest payments and that the high share of interest only loans is unusual by international standards.</li><li>Evidente has undertaken a back of the envelope analysis which highlights just how challenging conditions are for property investors.  Property investors relying on the prospect of capital growth are likely to be disappointed, particularly as already historically low rental yields are likely to decline further given the pipeline of apartments expected to come onto market over the next three years.</li><li>This represents a particularly delicate time for the RBA.  On the one hand, the global recovery, gradual normalisation of monetary policies around the world and heat in the property market would point to a tightening bias.  But underlying inflation remains below 2% and any signal to lift interest rates would risk choking off any prospect of a recovery in capital spending and further lift the unemployment rate.</li></ul>

The RBA's statement accompanying yesterday's decision to leave interest rates unchanged and a speech by the Governor last night confirm the extent of the central bank's anxieties about the property market.  Mr Lowe noted that too many loans are still made where the borrower has the skinniest of income buffers after interest payments and that the high share of interest only loans is unusual by international standards.Evidente has undertaken a back of the envelope analysis which highlights just how challenging conditions are for property investors.  Property investors relying on the prospect of capital growth are likely to be disappointed, particularly as already historically low rental yields are likely to decline further given the pipeline of apartments expected to come onto market over the next three years.This represents a particularly delicate time for the RBA.  On the one hand, the global recovery, gradual normalisation of monetary policies around the world and heat in the property market would point to a tightening bias.  But underlying inflation remains below 2% and any signal to lift interest rates would risk choking off any prospect of a recovery in capital spending and further lift the unemployment rate.

The RBA: Between a Rock and a Hard Place