Author: roymorgansocial

US collision course with China

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Original article by John Kehoe, Lisa Murray, Angus Grigg, Primrose Riordan
The Australian Financial Review – Page: 1 & 10 : 13-Jan-17

US Secretary of State nominee Rex Tillerson has issued a stern warning to China. He told the US Senate on 12 January 2017 that China should not be allowed to access disputed islands in the South China Sea. Hugh White, a professor of strategic studies at the Australian National University, is alarmed by Tillerson’s bellicose statement, which he sees as a sign of his ignorance and irresponsibility. If the US-China relationship deteriorates, Australia will be under pressure to choose between the two countries.

CORPORATES
UNITED STATES. DEPT OF STATE, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, AUSTRALIAN NATIONAL UNIVERSITY, AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Analysts suspect $65bn lift by big four banks has run its course

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Original article by Daniel Palmer
The Australian – Page: 21 : 13-Jan-17

Australia’s four major banks have enjoyed double-digit rises in their share prices since Donald Trump won the US presidential election. Their combined market capitalisation has risen by $A65bn in the last two months, prompting analysts to question whether the rally will continue. Jarrod Martin of Credit Suisse notes that shares in the "big four" are now close to fair value, although the firm is upbeat about the outlook for the banks. It anticipates earnings growth of four per cent and has upgraded its share price targets.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, SHAW AND PARTNERS LIMITED, BELL POTTER SECURITIES LIMITED

Fairfax’s NZ arm a shadow of old self

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Original article by Daniel Palmer
The Australian – Page: 16 : 13-Jan-17

The New Zealand division of Fairfax Media has posted a loss of $NZ95.3m for 2015-16, compared with a profit of $NZ21.9m in 2014-15. The latest financial result was marred by an impairment charge of $NZ106.8m, which included an additional writedown of $NZ66.8m in the value of its mastheads. The Commerce Commission is slated to make a final ruling on Fairfax NZ’s proposed merger with NZME in April, although it signalled in a draft determination that it is likely to block the deal.

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, FAIRFAX NEW ZEALAND LIMITED, NZME LIMITED – ASX NZM, APN NEWS AND MEDIA LIMITED – ASX APN, NEW ZEALAND. COMMERCE COMMISSION, NEW ZEALAND. COMPANIES OFFICE

Forrest cautious on iron outlook

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Original article by Andrew White
The Australian – Page: 15 & 16 : 13-Jan-17

Iron ore is trading at around $US80 a tonne, although it is tipped to fall to $US51.60 by mid-2017 and $US46.70 in 2018. The price of the steel input bottomed at $US36 per tonne in 2015, prompting Fortescue Metals Group to slash its debt and reduce its workforce. Fortescue also reduced its costs to just $US14.31 per tonne, but chairman Andrew Forrest says the group aims to achieve further cost reductions given the outlook for the iron ore price. Forrest also continues to advocate action to end slavery, and he has urged all Australian companies to take a similar stance.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, WALK FREE FOUNDATION, MINDEROO FOUNDATION, ROY HILL IRON ORE PTY LTD, VALE SA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Bellamy’s vulnerable to takeover

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Original article by Carrie LaFrenz
The Australian Financial Review – Page: 13 & 23 : 13-Jan-17

Shares in infant formula group Bellamy’s Australia shed 18 per cent to close at $A4.40 on 12 January 2017. The stock fell 20 per cent in the previous session, after being in a trading halt since early December. There is growing speculation that the company could become a takeover target. Belinda Moore of Morgans Financial says it would be attractive to suitors, but notes that turning around its fortunes could take up to 18 months. Bellamy’s shareholder Jan Cameron has ruled out making a takeover bid, although she will continue to push for changes to its board of directors.

CORPORATES
BELLAMY’S AUSTRALIA LIMITED – ASX BAL, MORGANS FINANCIAL LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED, BLACK PRINCE PRIVATE FOUNDATION, FONTERRA CO-OPERATIVE GROUP LIMITED, BELL POTTER SECURITIES LIMITED, WILSON HTM LIMITED

Greens amid top spenders on flights

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Original article by Rachel Baxendale
The Australian – Page: 1 & 2 : 13-Jan-17

The travel expenses of federal politicians have come under further scrutiny amid revelations that Australian Greens leader Richard Di Natale spent $A56,526 on travel during the first half of 2016. The Greens’ community services spokeswoman Rachel Siewert submitted claims for $A63,934 worth of travel expenses during the period. The Greens have criticised the high travel expenses of members of the major political parties, and Di Natale stresses that his team’s travel expenses were solely work-related.

CORPORATES
AUSTRALIAN GREENS, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE, AUSTRALIA. ATTORNEY-GENERAL’S DEPT, AUSTRALIA. DEPT OF SOCIAL SERVICES, AUSTRALIA. DEPT OF EMPLOYMENT, AUSTRALIA. DEPT OF HEALTH, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF IMMIGRATION AND BORDER PROTECTION

Forecast tax take out by $30bn

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Original article by David Uren
The Australian – Page: 2 : 13-Jan-17

The Parliamentary Budget Office has released its review of the Australian Government’s mid-year budget update. It shows that the forecast for revenue from personal income tax was $A21.1bn lower than in the May 2016 Budget, while company tax revenue was scaled back by $A6.7bn. Meanwhile, the budget update included savings of some $A10bn due to a reduction in the forecast cost of age pensions, carers’ payments and childcare subsidies. The forecasts for spending on health and education were largely unchanged from the Budget.

CORPORATES
AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIA. DEPT OF HUMAN SERVICES. CENTRELINK

For markets, the devil was in the lack of detail

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 13 & 29 : 13-Jan-17

Ewa Turek of Morgan Stanley notes that the first press conference of US president-elect Donald Trump offered few details of the policies he will prioritise after taking office. US markets posted modest gains in response to the press conference, while the Australian market dipped slightly. Garry Laurence of Perpetual adds that investors are waiting for more details of Trump’s policies, as well as guidance regarding the outlook for US interest rates.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, STANDARD AND POOR’S ASX 200 INDEX, PERPETUAL LIMITED – ASX PPT, WINGATE ASSET MANAGEMENT PTY LTD, MORGAN STANLEY WEALTH MANAGEMENT AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Australian Open tennis viewers a different breed to Aussies who play tennis

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 13-Jan-17

A Roy Morgan Single Source survey has found that 32.4% of Australians aged 14+ (6.4 million people) watch the Australian Open almost always or occasionally. However, just 45.1% of Australian Open viewers tune in for other tennis broadcasts. The survey, which was carried out in the year to September 2016, also shows that the Australian Open is particularly popular among people aged 50 or older; 36.3% of those aged 50-64 tune in to watch it, as do 46.3% of those aged 65+. In contrast, younger people show a distinct lack of interest in watching the Australian Open on TV, especially 14-17 year-olds (20.2%) and 18-24 year-olds (21.8%). Meanwhile, tennis participation is at its greatest among teenagers aged 14-17 years (16.2%), but starts slipping from 18 years onwards. While 7.0% of Australians overall play tennis, this slips to 4.3% of 50-64 year-olds and heads steadily south from there to 2.9% of those aged 65+.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIAN OPEN TENNIS

Resurgent $A tipped to reach US78c mark

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Original article by Timothy Moore
The Australian Financial Review – Page: 29 : 13-Jan-17

The Australian dollar peaked at $US0.7472 during the first press conference of US president-elect Donald Trump. Rodrigo Catril of National Australia Bank notes that the Australian dollar has performed better against its US counterpart than other key currencies so far in 2017. Westpac has identified the $US0.7525 level as the next target for the Australian dollar, while the ANZ Bank says it could potentially rise to $US0.78.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT