Agribusiness index holds up
Agribusiness continues to be a promising investment destination despite the listed agribusiness sector falling into negative territory during May, according to the latest Commonwealth Bank Agri Indicators Report.
The report, released today, revealed that the sector fell by 1.8 per cent during May, significantly less than the 4.9 per cent decline recorded across the broader S&P/ASX 200 Index.
The executive general manager, agribusiness, with the Commonwealth Bank, Jon Sutton, said agribusiness had been a top performer and that its dominance in the market was expected to hold over the coming 12 months, with forecast returns predicted to be around 11 per cent higher than those forecast for the broader market.
“Although the strong forecast returns make agri one of the market’s most attractive sectors on a risk-adjusted basis next to materials, energy and healthcare, it may be prudent for new investors to the sector to stage their investment now in order to guard against any price corrections in the short term,” he said.
Sutton said worldwide trends had continued to play a role in the domestic agribusiness industry, with food security and a possible worldwide food shortage fast becoming major issues for global leaders.
“Australian primary producers are well-placed to capitalise on this opportunity to provide more produce [for] the global market and this will help stimulate further interest from local and international investors,” Sutton said.
AUTHOR
Mike Taylor
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