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The bull market roars ahead

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has continued its stellar run over the past few weeks, adding 0.2% to 5,456 in early morning trade today. Since February 5, the index has gained 7%.

Bell Potter’s Charlie Aitken has reaffirmed his bullish stance for the market, forecasting the ASX 200 to hit 6,000 by mid-year. Previously, he had been forecasting it to hit that target towards the end of the year.

Record low interest rates make shares more attractive than other asset classes, especially when fully franked dividend yields of over 5% are still on offer from a number of large ASX-listed stocks.

And those low rates look set to hang around for some time, after the RBA made the following statement in its latest media release,

“On present indications, the most prudent course is likely to be a period of stability in interest rates.”

The Australian Financial Review (AFR) also reports that one of the world’s largest funds management businesses, T.Rowe Price Associates built a major stake in oil producer Santos Limited (ASX: STO) and has started adding more ASX stocks to their watch-list.

With the Aussie dollar trading at around 90 US cents, international investors are finding our market attractive. T.Rowe Price Associates is also among the top 20 shareholders in resource giant BHP Billiton (ASX: BHP) and building materials company James Hardie (ASX: JHX).

Getting back to Charlie Aitken.

It’s no surprise that Mr Aitken has told clients to keep the faith, with earnings per share growth of around 25% expected this year and over 13% next year.

His best pick in the bull market is AMP Limited (ASX: AMP). Mr Aitken says if the ASX hits 6,000, AMP will be $6 – it’s currently trading at around $5.00.

Personally, I’m no fan of AMP. But that’s not to mean it can’t hit $6. ‘A rising tide lifts all boats’ as they say.

Foolish takeaway

Bring on the 6,000 I say. With earnings growing, companies holding record amounts of cash on their balance sheets and some strong economic data coming through, there’s every reason to believe we’ll hit that target sooner rather than later.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

 

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