Here’s the short version of everything that’s happening in the expanding world of Barrenjoey, the little Aussie investment bank that’s – literally (see below) going places.

Ah, investors should have more confidence in the following trends:

Momentum – tick.
Growth – tick.
Value – tick.

But better than all three: Quality.


How come?

Because Barrenjoey’s global uncertainty indicator has taken a bit of a dive for the first time in ages.

That’s almost a free ticket to the Confidence Prom. The light is green, the trap is clean.

The firm says the cross-asset volatility has totally plunged of late and along with it actual uncertainty and the uncertainty someone takes the time to measure from news article volumes.

Barrenjoey reports that they’ve greater confidence in both momentum and growth factors – but still view “multiple dispersion as too wide for the prevailing level of inflation” – and ergo sum are not “all in” on either.

Quality, they say, heading into June, matters much more than value, growth, or momentum, coming as it does after Barrenjoey’s measure of global risk appetite hit “euphoric” levels in late May.

“With leading indicators of activity growth deteriorating and pointing to a pullback in sentiment, this should see quality-as-a-style outperform.”

They also favour low leverage, as credit spreads are historically tight.


On the ASX

Having been upbeat on Resources and Insurance stocks, Barrenjoey is now booking some profits, given some of the strong recent share price performances and now prefer defensives such as ASX Staples, Utilities, and Industrials – compared to Resources.

Their preferred stocks list now welcomes:

Orora (ASX:ORA), Cleanaway (ASX:CWY), Cochlear (ASX:COH)  and Ventia Services (ASX:VNT).

On the flipside. the outlook based on shorter-term sentiment concerns has seen the firm book profits in the following names:

Pilbara Minerals (ASX:PLS), Qantas (ASX:QAN), Insurance Australia (ASX:IAG), NIB Holdings (ASX:NHF) and Beach Energy (ASX:BPT).


Big in Abu Dhabi

The Aussie investment bank just opened up its first offshore beachhead this week, choosing Abu Dhabi where it’s reportedly already got 10 on the ground offering fixed-income and trading services.

“The regulatory environment is comparable to Australia, which has enabled us to establish operations in a relatively short time frame, The application of English Common Law in the jurisdiction and the proactive approach of ADGM also helped streamline the project,” fixed income COO Jacqui Byrnes said in a published statement on Monday.

According to Bloomberg Abu Dhabi and nearby Dubai have become thriving global cities and are luring a slew of financial firms and wealthy individuals – it was the dealmaking last year that gripped the Middle East offset a tougher environment in other parts of the world.

The city saw Q1 total assets under management (AUM) surge more than 200% y-o-y, according to Abu Dhabi Global Market.

The move out that way also lets Barrenjoey offer extended coverage during European and US trading hours, the company said.

Barrenjoey, which only kicked off  in 2020, now has a staff of more than 350 pretty quickly getting itself seats at the M&A transactions and has elevated it in areas such as equity block trading.

Rothschild & Co. and Morgan Stanley last year were among global investment banks opening up in Dubai, while JPMorgan Chase & Co. expanded its offering in the city.

ADGM branch senior executive officer Adrian Longland said Barrenjoey’s Fixed Income sales and trading services are already benefiting from joining a community of financial market participants in ADGM.

“Opening our trading operations in ADGM means we’re co-locating in one of the fastest-growing financial districts in the world together with an increasing number of our clients and market participants,” said Longland.