BlackRock's head of Australian equities Mark Himpoo has laid out his Australian equity predictions for the next 12 months, with a particular focus on defensiveness and long-term vision.
"We're not seeing as many opportunities in the current market, so we're looking at various stocks on a three-year plus horizon. There could be short-term issues, but with certain companies we are very confident about their long-term future," Himpoo said.
The 12-month view for the BlackRock Wholesale Australian Share Fund features a range of defensive stock picks including Cochlear, CSL and Origin Energy, he said.
"These are high-quality Australian companies with good, defensive cashflow and strong balance sheets," Himpoo said.
As for some sector picks, Himpoo said BlackRock had decided to go underweight on diversified financials for the next year.
"This ranges from everything from Macquarie down to some of the smaller wealth managers," Himpoo said.
Resources, which Himpoo believes is overpriced at the moment, is another sector where BlackRock has elected to go underweight.
However, there is some light at the end of the tunnel.
BlackRock, while choosing to remain neutral on the banking sector in the short term, believes the picture looks positive for the future.
"The debt cycle is going to be extreme, but for the long term the structure has never looked better," Himpoo said.
The BlackRock Wholesale Australian Share Fund dropped 33.75 per cent for the year ending 31 December 2008, beating the S&P/ASX 200 Accumulation index by 5.33 per cent.
