Invesco's Walker: The opportunities from pro-cyclical equities

Martin Walker, fund manager at Invesco Perpetual, explores the attractive valuation opportunities in the oil and banking sectors.

The portfolios I manage have been re-positioned to take advantage of what I see as an attractive risk/reward profile currently being offered in pro-cyclical equities. In the oil sector, we are seeing significant self-help by the companies. The oil majors have a real intention to push the oil price deflation onto their supplier base and to significantly reduce their cash cost per barrel. They believe they can get their cost base down to a level where they can cover their dividend and free cashflow at the prevailing oil price. On the demand side, with lower oil prices, we are already...