Margin pressures in the financial services and real estate sectors are expected to continue this year, according to research house and fund manager Lincoln Indicators.
"With the property boom in major centres at least abating, developers and lenders alike will need to focus on efficiencies, acquisitions and other inorganic strategies to achieve bottom line growth," Lincoln chief executive Elio D'Amato said.
"In terms of sector picks, NAB and ANZ are our preferred banks, QBE is our preferred insurer and Perth-based Finbar Group Limited is our preferred property developer."
D'Amato said industrial metals and energy stocks should perform well on continuing demand from China.
"While commodity price inflation is as much a concern for China as it is here, China still has plenty of monetary and fiscal ammunition left in keeping demand strong for the time being," he said.
"Oil will be a major commodity theme for the next six months, with our analysts seeing a new resistance level of US$100 per barrel. Liquefied natural gas, on the other hand, is less attractive as a commodity growth theme, with too much supply coming on stream."
He said coal was another energy-related pick for the next six months, with the floods in Queensland not only impacting on coking coal prices, but making secure thermal coal supplies more attractive as well.
"Outside of expected strong performance in the mining services and civil construction sectors, industrials are expected to be steady as she goes, notwithstanding a strong Australian dollar and tough export market."
He said some surprises might be in store, however, with merger and acquisition activity heating up and pervading all sectors.
"Lincoln expects IT stocks, in particular, to do well on higher information communication technology spending in both the private and public sectors," he said.
