Emanuel Datt, Chief Investment Officer at Datt Capital says: “The impact of past covid related social restrictions will weigh heavily on the future near term economic prospects of Australian corporate sector.

“This is largely due to the change in societal behaviour as a result of these past restrictions. We anticipate that localities with less onerous restrictions will bounce back with more vigour relative to those slower to relax condition.

“We also expect significant changes in the manufacturing of materials and services driven by supply chain issues,” added Datt.

As an example, he cites the household products company GWA Ltd is a typical case in point. The management recently advised the market the company jointly chartered transport ships to get its products from China to three sperate ports in Australia because of the bottleneck and delays in traditional channels.

“An increase in ‘on-shoring’ to mitigate these supply chain issues is likely to accelerate,” says Datt. “Speciality home fragrance manufacturer and retailer Dusk Limited’s acquisition of a local manufacturer is a prime example of this trend.”

He says increasing geo-political tensions will impact the availability of commodities, whose supply may be used to exert political pressure on the global stage and these same forces will increase management focus on managing jurisdictional risk, particularly in the resources sector.

“Finally, with inflation now on a front burner rather than one at the back of the stove, prudent investors will focus on real rather than nominal returns and aim to make an adequate margin above the inflation rate,” Datt notes.

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