Macquarie 2023 Outlook Predicts Debt, Energy and Construction Markets May Flourish

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Macquarie recently released its 2023 Outlook, and Macquarie Asset Management (MAM) provides insights into various markets which may influence the investment landscape and performance of different asset classes in the following year.

MAM predicts the US will fall into recession in the first half of 2023. It will follow the UK and Europe but is expected to be in synchronised recovery toward the end of the year. 

Ben Way, group head of MAM, noted, “Based on our experience and the views of our experts, we remain stubbornly optimistic. The global economy faces diverse and complex challenges, but we can play a key role in presenting opportunities to our clients that will generate a positive impact for everyone. When volatility and uncertainty abound, and where the cost of capital is not zero, it is essential to be an active investor.”

The Outlook also reports that discussions regarding Energy Security are to be expected as acquiring LNG imports and other fuel sources may be a challenge for Europe in the following year. MAM also expects that transition to low-carbon energy systems may accelerate.

MAM expects the debt market to continue flourishing in 2023 due to the high bond yields that “offer attractive valuations and strong protection levels for investors in investment grade, high-yield markets, and developed world sovereigns.”

The Outlook states that it expects growth opportunities in the Construction and Engineering markets but expects equity markets to decline further due to the recessionary pressures experienced globally.

Tangible assets and infrastructure are expected to still attract investors as investments in this market tend to be defensive and offer high yields and inflation protection. 

According to Frank Kwok, head of Real Assets, Asia Pacific, for MAM, buying listed infrastructure assets when the pessimistic market can sometimes be beneficial. His statement supports MAM’s advice to institutional and sophisticated investors to invest for periods of 30 to 40 years in unlisted assets.

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