Three Important Predictions For Finance In 2022
As we did in 2021, we're kicking off the new year by presenting our projections for 2022. These forecasts aren't meant to be our worst-case scenarios for the year; rather, they're meant to spark discussion about a variety of issues that may arise in 2022. Every member of the Sydney financial planners team has made forecasts.
Prediction 1
International Travel Will Return to Pre-COVID Levels Notwithstanding the continuing danger of Omicron, Sydney financial planners expect that overseas travel amongst Australians should pick up by mid-2022 and revert to usual levels by the year. The world will
find a way to cope with COVID after the northern hemisphere has completed its winter. "Qantas plans to have its planes flying by July 2022," said Qantas CEO Alan Joyce. If everything goes according to plan, we expect international flight numbers to be at or over 80% of pre-COVID rates by the end of the year. We can travel to our favourite vacation by the end of 2022, thanks to high vaccination rates throughout the planet, as well as the Omicron version not appearing to be as severe (despite strong transmission).
Prediction 2 The Electric Vehicle Bubble Bursts While Sydney financial planners predict that electric cars will overtake internal combustion engines in terms of market share, we also feel that the automobile industry is keeping pace and that improved pricing values will contribute to development in this area. Since more mines are pulled out of maintenance and more manufacturing is brought online, we don't rule out a sell-off in the products that sustain this industry. We anticipate that the market will eventually recognize that there are few barriers to entry into the area and that automobile manufacturing has been on its deathbed for businesses for the past 100 years. Finally, there is the issue of value.
Prediction 3 The Australian Small Ord’s will outperform the ASX 100 Given that it comes from the Emerging Companies portfolio manager, this isn't the most daring prediction. However, Sydney
financial planners believe that ASX's top corporations will face pressure in 2022. The major four banks’ net interest margins have been under pressure this year, and it is projected to continue owing to low-interest levels and increased competition. The ASX 100 index is also concerned about BHP's decision to switch from a double listing in Australia as well as London to one listing on the ASX. This might push BHP's market capitalization above 10% of the index. The value of iron ore fell in the second half of 2021, and it may fall more since the demand for steel in China fell. Given that the major four banks and BHP will likely account for 30% of the index, the ASX 100's performance will be significantly reliant on these corporations. Because of its diversity, the Small Ord's index bypasses this difficulty, and we expect it to beat the ASX 100 in 2022.