Author: roymorgansocial

Unseasonal iron ore rally boosts budget

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Original article by Peter Ker
The Australian Financial Review – Page: 10 : 21-Jul-17

The iron ore price peaked at a three-month high above $US70 a tonne on 20 July. The price of the steel input has risen by 31 per cent in just over a month, and it has averaged $US65.12 a tonne since the start of July. Paul Bloxham of HSBC estimates that this will increase the Australian Government’s revenue by about $US1.25bn in 2017-18. The May 2017 Budget had forecast that iron ore would average $US55 a tonne in 2017-18. Bloxham expects the iron ore price to fall to around $US50 a tonne by late 2017.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD

Red-faced Greens senators scrambling to prove their citizenship

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Original article by Rosie Lewis
The Australian – Page: 1 & 4 : 20-Jul-17

The eligibility of Australian Greens MPs to hold public office continues to attract scrutiny after Scott Ludlam and Larissa Waters were forced to resign from Parliament due to their dual citizenship status. A Greens spokeswoman has indicated that party leader Richard Di Natale and Senator Nick McKim are in the process of obtaining documents to prove that they relinquished their citizenship of Italy and the UK respectively prior to being elected to Parliament.

CORPORATES
AUSTRALIAN GREENS, TASMANIAN GREENS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, ONE NATION PARTY, HIGH COURT OF AUSTRALIA

ALP left seeks to lift taxes, boost the ‘right to strike’

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Original article by Troy Bramston
The Australian – Page: 1 & 4 : 20-Jul-17

Industrial relations and taxation will be on the agenda of the Australian Labor Party’s national conference in late July. The left faction of New South Wales Labor will push for the party to endorse a range of workplace reforms, including the right to strike, secondary boycotts and pattern bargaining. Other policies to be advocated by the left faction include the introduction of a universal basic wage­, an increased tax rate for high income earners and a national­ inheritance tax.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIAN WORKERS’ UNION-FEDERATION OF INDUSTRIAL, MANUFACTURING AND ENGINEERING EMPLOYEES, AUSTRALIAN RAIL, TRAM AND BUS INDUSTRY UNION

Industry funds top super league table

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Original article by Sally Patten
The Australian Financial Review – Page: 3 : 20-Jul-17

Data from Chant West shows that the average balanced superannuation fund posted a return of 10.7 per cent in 2016-17. Meanwhile, the average return for industry super funds was 11.1 per cent, compared with just 9.7 per cent for retail funds. Hostplus delivered the best return among balanced funds, at 13.2 per cent, followed by Australian Super’s return of 12.4 per cent. Mark Delaney of AustralianSuper says fund members should expect a lower return in 2017-18.

CORPORATES
CHANT WEST FINANCIAL SERVICES PTY LTD, SUPERRATINGS PTY LTD, HOST-PLUS, AUSTRALIANSUPER PTY LTD, SUNSUPER PTY LTD, FIRST STATE SUPER, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, INTRUST SUPER FUND, KINETIC SUPER, CATHOLIC SUPER, RESERVE BANK OF AUSTRALIA

Sydney unit rents on par with houses as affordability bites

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Original article by Michael Bleby
The Australian Financial Review – Page: 3 : 20-Jul-17

Data from Domain Group shows that the median weekly rent for apartments in Sydney rose by 4.8 per cent in the year to June 2017. The median weekly rent for detached houses increased by 3.8 per cent. Meanwhile, the median weekly rent for apartments and houses in Melbourne increased by 5.3 per cent and five per cent respectively. The figures also show that the median house price in Sydney rose by 1.6 per cent to a new high of $A1,178,417 in the June quarter, while the median price in Melbourne rose 3.5 per cent to $A865,712.

CORPORATES
DOMAIN.COM.AU, FAIRFAX MEDIA LIMITED – ASX FXJ

Banks dodge a capital bullet

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Original article by Andrew White
The Australian – Page: 17 & 21 : 20-Jul-17

The Australian Prudential Regulation Authority will require the nation’s four major banks to have minimum common equity tier-one capital ratios of 10.5 per cent from 2020. The new capital requirements are part of APRA’s strategy for ensuring that local banks are "unquestionably strong". Investors responded positively to the revised capital rules, which were less stringent than had been anticipated, with shares in local banks rallying on 19 July. The capital ratios of most of the major banks are already close to APRA’s proposed new minimum.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, YARRA CAPITAL PARTNERS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, SHANGHAI RURAL COMMERCIAL BANK

CLSA slaps a buy on listed retail landlords

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Original article by Matthew Cranston
The Australian Financial Review – Page: 28 : 20-Jul-17

Shares in Australian-listed real estate investment trusts have fallen sharply in 2017, with Westfield Corporation and Vicinity Centres shedding 16.7 per cent and 13.7 per cent respectively. The A-REIT sector has fallen by about 10 per cent in the last month, but Sholto Maconochie of CLSA is upbeat about the outlook for the sector, and retail property trusts in particular. CLSA favours Scentre Group and Vicinity Centres, and the firm’s rating on the latter has been upgraded to "outperform".

CORPORATES
WESTFIELD CORPORATION – ASX WFD, VICINITY CENTRES – ASX VCX, SCENTRE GROUP – ASX SCG, CLSA AUSTRALIA PTY LTD, CBRE PTY LTD, CHADSTONE SHOPPING CENTRE, DEXUS PROPERTY GROUP – ASX DXS, INVESTA OFFICE FUND – ASX IOF

Origin awaits Beetaloo gas bonanza go-ahead

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 20-Jul-17

Origin Energy’s chief geologist David Close says the company could potentially resume a shale gas drilling program in the Beetaloo Basin in 2019 if the Northern Territory relaxes its ban on hydraulic fracturing. It has been estimated that the Beetaloo Basin region accounts for about 70 per cent of the NT’s shale gas reserves. Saul Kavonic of Wood Mackenzie says production of commercial volumes of shale gas in the Beetaloo Basin is unlikely before 2025 even if the ban on fracking is scrapped.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, WOOD MACKENZIE, SASOL LIMITED, FALCON OIL AND GAS LIMITED

Ore lift backs BHP ‘surprise’ on dividend

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Original article by Matt Chambers
The Australian – Page: 19 : 20-Jul-17

Citigroup expects BHP Billiton to post an underlying profit of $US6.76bn for 2016-17, compared with $US1.22bn previously. BHP’s activities report for the June 2017 quarter shows that it produced 268 million tonnes of iron ore in Western Australia during 2016-17, while copper output at the Olympic Dam mine in South Australia fell 16 per cent to 166,000 tonnes. Strike action at the Escondida copper mine in Chile resulted in annual output falling to 772,000 tonnes, but output of up to 1.23 million tonnes is expected in 2017-18.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CITIGROUP PTY LTD, MINERA ESCONDIDA LIMITADA, RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, MORGANS FINANCIAL LIMITED

RBA sending a warning shot on rates: Edwards

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Original article by David Rogers
The Australian – Page: 17 & 28 : 20-Jul-17

Economist John Edwards recently suggested that Australia’s economic outlook could potentially prompt the Reserve Bank to lift the cash rate from 1.5 per cent to 3.5 per cent by the end of 2019. The minutes of the central bank’s latest board meeting indicate that it now has a "neutral" nominal cash rate target of 3.5 per cent. Edwards says it is quite possible that official interest rates could rise to this level, and he anticipates a rate rise in March 2018. Paul Bloxham of HSBC forecasts a rate increase in the March 2018 quarter.

CORPORATES
RESERVE BANK OF AUSTRALIA, HSBC AUSTRALIA HOLDINGS PTY LTD, DEUTSCHE BANK AG, GOLDMAN SACHS AUSTRALIA PTY LTD, LOWY INSTITUTE FOR INTERNATIONAL POLICY