K64 Auxiliary Finance and Insurance Services

How to pick a winner as tariff tensions rise

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Original article by David Rogers
The Australian – Page: 26 : 10-Apr-18

Hasan Tevfik of Credit Suisse says a trade war between the US and China would negatively affect economic growth, bond markets and shares. He adds that investors should factor in the potential impact of an increase in tariffs, although a large-scale trade war is unlikely to occur. Tevfik says BHP Billiton, Fortescue Metals Group and QBE Insurance Group are among the Australian-listed companies that would be hard hit by increased protectionism by the US and China. He also warns of the potential for a further rise in bond yields.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, QBE INSURANCE GROUP LIMITED – ASX QBE, SIMS METAL MANAGEMENT LIMITED – ASX SGM, MONADELPHOUS GROUP LIMITED – ASX MND, BLUESCOPE STEEL LIMITED – ASX BSL, NUFARM LIMITED – ASX NUF, QANTAS AIRWAYS LIMITED – ASX QAN, BOEING COMPANY, STANDARD AND POOR’S ASX 200 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Amid the swings hopes for rally build

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Original article by David Rogers
The Australian – Page: 30 : 6-Apr-18

The S&P 500 gained 10 per cent in February 2018, while Australia’s benchmark S&P/ASX 200 rose five per cent in response. Equities markets may experience a similar rally in April, with Australian banks in particular having the potential to perform well given that the S&P/ASX 200 banks index is currently at its lowest level for 18 months. Meanwhile, the S&P/ASX 200 is trading on a price-earnings multiple of 14.8 times, compared with its long-term average of about 14.4 times, according to Chris Nicol and Daniel Blake of Morgan Stanley.

CORPORATES
STANDARD AND POOR’S 500 INDEX, STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED, STANDARD AND POOR’S ASX BANKS 200 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, NASDAQ COMPOSITE INDEX, NYSE FANG+ INDEX

Facebook fallout hits technology stocks

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Original article by Supratim Adhikari
The Australian – Page: 17 & 26 : 29-Mar-18

Investor sentiment toward Australian-listed technology companies turned bearish on 28 March, in the wake of a similar sell-down on Wall Street. WiseTech Global was among the hardest hit, shedding 4.6 per cent to close at $A10.11, while Altium, Appen and Xero all fell by at least two per cent. Julia Lee of Bell Direct stresses that Australian technology stocks do not use large volumes of data so they are not exposed to the same risks as US peers such as Facebook. She does note that many local tech stocks are overvalued.

CORPORATES
WISETECH GLOBAL LIMITED – ASX WTC, ALTIUM CAPITAL LIMITED, APPEN LIMITED – ASX APX, XERO LIMITED – ASX XRO, BELL DIRECT, FACEBOOK INCORPORATED, CAMBRIDGE ANALYTICA LLC, NASDAQ, LINCOLN INDICATORS PTY LTD, GENTRACK GROUP LIMITED – ASX GTK, STANDARD AND POOR’S ASX 200 INDEX

Cracks emerging in the case for being bullish

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Original article by David Rogers
The Australian – Page: 27 : 22-Mar-18

The potential for a trade war has been identified as the biggest risk to the global bull market in a survey of fund managers by Bank of America Merrill Lynch. The prospect of a trade war has topped the list of "tail risks" for the first time since January 2017, in the wake of the tariff policies of US President Donald Trump. A sharp rise in inflation and a slowdown in global economic growth were the other key risks identified by the survey of 176 fund managers. However, 58 per cent of respondents expect growth of at least 10 per cent in global earnings per share over the next 12 months.

CORPORATES
BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, FEDERAL RESERVE BANK OF ATLANTA, FACEBOOK INCORPORATED, APPLE INCORPORATED, AMAZON.COM INCORPORATED, NETFLIX INCORPORATED, BAIDU.COM INCORPORATED, ALIBABA GROUP HOLDING LIMITED, TENCENT HOLDINGS LIMITED

Local investors must factor in Fed rates hike

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Original article by Patrick Commins
The Australian Financial Review – Page: 22 : 19-Mar-18

Futures pricing indicates that the Australian sharemarket is likely to rise when trading resumes on 19 March. The banking royal commission and Labor’s imputation credit reforms are likely to be a key focus for investors in the coming week, along with the latest jobs data and the minutes from the Reserve Bank’s monthly board meeting. The first meeting of the Federal Reserve under new chairman Jerome Powell will also attract scrutiny, amid expectations of a rise in US interest rates.

CORPORATES
AUSTRALIAN LABOR PARTY, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESFARMERS LIMITED – ASX WES, COLES SUPERMARKETS AUSTRALIA PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, AMP CAPITAL INVESTORS LIMITED, BNP PARIBAS SA

M&A’s hot sectors to drive healthy flow

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 19 : 19-Mar-18

Data from Dealogic shows that $US13.1bn ($A17bn) worth of mergers and acquisitions have been announced so far in 2018, which is 25 per cent higher than the same period in 2017. Herbert Smith Freehills partner Tony Damian anticipates strong M&A activity during 2018, citing healthcare as a sector which is likely to continue to attract suitors. The law firm also identifies financial services, renewable energy and infrastructure as Australian sectors in which M&A activity is likely to be high.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, HERBERT SMITH FREEHILLS PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, EXXONMOBIL CORPORATION, AWE LIMITED – ASX AWE, MITSUI AND COMPANY LIMITED, I-MED/MIA NETWORK LIMITED, PERMIRA PRIVATE EQUITY LIMITED, DEUTSCHE BANK AG, COALITION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, SUNCORP GROUP LIMITED – ASX SUN, WESFARMERS LIMITED – ASX WES, COLES SUPERMARKETS AUSTRALIA PTY LTD, QUALCOMM INCORPORATED, BROADCOM CORPORATION, UBS HOLDINGS PTY LTD, LAZARD PTY LTD, GOLDMAN SACHS AUSTRALIA PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, MACQUARIE CAPITAL PTY LTD

Credit Suisse picks top takeover targets

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Original article by Simon Evans
The Australian Financial Review – Page: 18 : 14-Mar-18

Hasan Tevfik of Credit Suisse expects mergers and acquisitions activity in Australia to remain strong during 2018, citing factors such as healthy balance sheets and growing business confidence. Credit Suisse has identified 31 listed stocks that could potentially become takeover targets in 2018. They include Santos, Whitehaven Coal, Nine Entertainment Company, Fairfax Media, Ardent Leisure Group, DuluxGroup, Origin Energy and Caltex Australia.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, SANTOS LIMITED – ASX STO, WHITEHAVEN COAL LIMITED – ASX WHC, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED – ASX FXJ, ARDENT LEISURE GROUP – ASX AAD, DULUXGROUP LIMITED – ASX DLX, ORIGIN ENERGY LIMITED – ASX ORG, CALTEX AUSTRALIA LIMITED – ASX CTX, SEVEN WEST MEDIA LIMITED – ASX SWM, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, ADELAIDE BRIGHTON LIMITED – ASX ABC, NUFARM LIMITED – ASX NUF, PRIMARY HEALTH CARE LIMITED – ASX PRY, SYRAH RESOURCES LIMITED – ASX SYR, APA GROUP – ASX APA, BLACKMORES LIMITED – ASX BKL, CHALLENGER LIMITED – ASX CGF, TREASURY WINE ESTATES LIMITED – ASX TWE, PENFOLDS WINES PTY LTD, CHINA NATIONAL CEREALS, OILS AND FOODSTUFFS IMPORT AND EXPORT CORPORATION, WESTFIELD CORPORATION – ASX WFD, UNIBAIL-RODAMCO

Bear market might be just around corner

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Original article by Patrick Commins
The Australian Financial Review – Page: 33 : 13-Mar-18

Australia’s S&P/ASX 200 has gained 90 per cent since reaching a low in March 2009. US markets have been the driving force behind the nine-year global bull market. However, Morgan Stanley has identified a number of factors that could be an indicator of a looming bear market. These include strong gains in the last 12 months of a bull market, outperformance by emerging market equities and a widening of credit spreads. Meanwhile, John Higgins of Capital Economics expects the S&P 500 to fall to 2,300 points by the end of 2019.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, MORGAN STANLEY AND COMPANY INCORPORATED, CAPITAL ECONOMICS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, HANG SENG INDEX, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED

Cohn exit triggers shockwaves

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Original article by David Rogers
The Australian – Page: 17 & 27 : 8-Mar-18

Sharemarkets in the Asia-Pacific region fell on 7 March in response to the resignation of President Donald Trump’s chief economic adviser, Gary Cohn, and futures pricing suggests further bearishness on Wall Street. Cohn was an advocate of free trade, and analysts say his resignation will heighten concerns about the potential for a trade war. Reserve Bank of Australia governor Philip Lowe says there could be major ramifications for the global economy if Trump were to broaden his tariff policy beyond steel and aluminium.

CORPORATES
UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, RESERVE BANK OF AUSTRALIA, IG MARKETS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. DEPT OF COMMERCE, SAXO BANK A/S, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, VISY INDUSTRIES AUSTRALIA PTY LTD, QANTAS AIRWAYS LIMITED – ASX QAN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S ASX 200 INDEX, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BLUESCOPE STEEL LIMITED – ASX BSL, NIKKEI 225 INDEX, SHANGHAI COMPOSITE INDEX, HANG SENG INDEX, KOSPI INDEX, LONDON METAL EXCHANGE LIMITED

Higher volatility is going to be a fact of life again

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Original article by Bill Bovingdon, Chris Dickman
The Australian Financial Review – Page: 23 : 26-Feb-18

Further volatility can be expected across all asset classes as central banks wind back quantitative easing programs and interest rates rise from historic lows. The European Central Bank has begun to scale back its asset purchasing program, although inflation is not yet sufficiently high for it to begin adjusting monetary policy. Meanwhile, Australia’s cash rate is likely to remain steady amid a continuing low level of inflation. The active management strategy is likely to deliver better returns than passive investing in the current environment,

CORPORATES
EUROPEAN CENTRAL BANK, PEOPLE’S BANK OF CHINA, ALTIUS ASSET MANAGEMENT PTY LTD