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Bumps in the road: no straightforward path to 6000

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Original article by David Rogers
The Australian – Page: 31 : 5-May-17

The S&P/ASX 200 Index retreated below the 5,900-point level on 4 May 2017, after closing within sight of 6,000 points earlier in the week. The consensus of market analysts is that it will rise to around 6,000 in the next year, while Bloomberg’s consensus target has been increased to 6,026.8 points. However, the local sharemarket faces a number of headwinds, including the prospect of interest rate rises in both Australia and the US at some point, while Tim Baker of Deutsche Bank anticipates an eventual correction of five per cent of more.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BLOOMBERG LP, DEUTSCHE BANK AG, CITIGROUP PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, FORTESCUE METALS GROUP LIMITED – ASX FMG, UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED – ASX GMA, CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, PACT GROUP HOLDINGS LIMITED – ASX PGH, COCA-COLA AMATIL LIMITED – ASX CCL, VOCUS GROUP LIMITED – ASX VOC, THE STAR ENTERTAINMENT GROUP LIMITED – ASX SGR, AGL ENERGY LIMITED – ASX AGL, APA GROUP – ASX APA, SUNCORP GROUP LIMITED – ASX SUN, WOOLWORTHS LIMITED – ASX WOW, CREDIT SUISSE (AUSTRALIA) LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ECLIPX GROUP LIMITED – ASX ECX, LEND LEASE GROUP LIMITED – ASX LLC, GRAINCORP LIMITED – ASX GNC

PE floats sag in 2016, but not over 3 years

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 19 : 4-May-17

Rothschild and the Australian Private Equity & Venture Capital Association have produced a report which shows that IPOs backed by private equity firms underperformed the broader IPO market in 2016. The former delivered an average share price gain of 2.8 per cent, compared with a gain of 10.5 per cent for other floats. However, there were just five private equity-backed IPOs in Australian during the calendar year, and analysis shows that such IPOs have outperformed since 2013.

CORPORATES
NM ROTHSCHILD AUSTRALIA HOLDINGS PTY LTD, AUSTRALIAN PRIVATE EQUITY AND VENTURE CAPITAL ASSOCIATION LIMITED, ZIP INDUSTRIES AUSTRALIA, QUADRANT PRIVATE EQUITY PTY LTD, QUICK SERVICE RESTAURANTS HOLDINGS PTY LTD, OFFICEWORKS SUPERSTORES PTY LTD, WESFARMERS LIMITED – ASX WES, BINGO INDUSTRIES LIMITED – ASX BIN, TEGEL GROUP HOLDINGS LIMITED – ASX TGH, INGHAMS GROUP LIMITED – ASX ING, SCOTTISH PACIFIC GROUP LIMITED – ASX SCO, BRAVURA SOLUTIONS LIMITED.- ASX BVS, GTN LIMITED – ASX GTN, STANDARD AND POOR’S ASX SMALL INDUSTRIALS INDEX, SPOTLESS GROUP HOLDINGS LIMITED – ASX SPO, CYAN INVESTMENT MANAGEMENT PTY LTD, REGAL FUNDS MANAGEMENT PTY LTD, ALINTA ENERGY (AUSTRALIA) PTY LTD, ACCOLADE WINES LIMITED

US, Britain soak up cash

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Original article by David Uren
The Australian – Page: 28 : 27-Apr-17

Data shows that Australian foreign investment doubled in the 10 years to 2015, to $A534bn, and offshore investment now accounts for 32.4 per cent of GDP. The US tops the list of overseas investment destinations, at $A105bn, ahead of the UK ($A85bn). However, Andrew Parker of PwC notes that Asia accounts for only 10.9 per cent of Australia’s total foreign investment. A survey by PwC has found that Australia’s dividend imputation system is generally not regarded as a deterrent to investing in Asia.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, ASSOCIATION OF SOUTH-EAST ASIAN NATIONS

Active fundies struggle as passive index huggers deliver

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Original article by James Frost
The Australian Financial Review – Page: 1 & 8 : 26-Apr-17

Data from S&P Dow Jones Indices shows that more than 75 per cent of Australia’s actively-managed large-cap equity funds failed to match the performance of their benchmark index in 2016. Independent Asset Management and Hyperion Asset Management are among the active fund managers to have underperformed in recent years, as investors have increasingly embraced passively-managed index funds.

CORPORATES
S&P DOW JONES INDICES LLP, INDEPENDENT ASSET MANAGEMENT PTY LTD, HYPERION ASSET MANAGEMENT LIMITED, HYPERION AUSTRALIAN GROWTH COMPANIES FUND, MERCER INVESTMENTS PTY LTD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, STANDARD AND POOR’S ASX 300 ACCUMULATION INDEX

External factors align for a ‘buying opportunity’

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Original article by David Rogers
The Australian – Page: 25 : 19-Apr-17

Australia’s benchmark S&P/ASX 200 Index remained above the technically important 5,830- point level on 18 April 2017, despite a further downturn in the iron ore price. However, the local sharemarket has fallen by just 2.2 per cent since its recent peak of 5,950.1, and it could still test the 6,000-point level for the first time since 2008. Meanwhile, Morgan Stanley remains bearish about the outlook for the local market, and the firm still expects the S&P/ASX 200 to fall to 5,450 by the end of the year.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED, STANDARD AND POOR’S 500 INDEX, CITIGROUP PTY LTD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Traders pour into gold as tensions rise

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Original article by David Rogers
The Australian – Page: 32 : 13-Apr-17

The price of gold has rallied in recent weeks as growing geopolitical tensions prompt renewed investor support for "safe haven" assets. Meanwhile, the yield on 10-year US Treasuries recently reached a five-month low and it is again testing this level, while the VIX volatility index has risen to its highest level in five months. However, Joseph Capurso of the Commonwealth Bank says the continued strength of the US dollar suggests that recent financial market trends do not constitute a "global risk-off event".

CORPORATES
CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRY WORLD INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AMP CAPITAL INVESTORS LIMITED

Activism may explain ASX’s sprint to 6000

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Original article by Jessica Sier
The Australian Financial Review – Page: 25 : 12-Apr-17

Hasan Tevfik of Credit Suisse says international shareholder activists may increasingly target Australian shares, adding that it is surprising that they have not already done so. He suggests that activist investors may have contributed to the local sharemarket’s recent rally. Shareholder activism has come under scrutiny in the wake of a proposal by US hedge fund Elliott Management for BHP Billiton to undertake a major restructuring.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, ELLIOTT ASSOCIATES LP, PERPETUAL INVESTMENTS, JP MORGAN ASSET MANAGEMENT INCORPORATED, JANA PARTNERS LLC, AMERICAN WHOLE FOODS

Wall Street could stop ASX bull run

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Original article by Philip Baker
The Australian Financial Review – Page: 31 : 11-Apr-17

The S&P/ASX 200’s rise above the 5,900-point level has prompted renewed speculation that it could test 6,000 points. However, the near-term outlook for the benchmark index will depend on the US earnings season, and data from Bloomberg shows that the number of companies that have provided earnings guidance in the last month has fallen to the lowest level since 1999. Meanwhile, borrowings costs may rise as offshore investors bail out of US treasuries and the Federal Reserve prepares to divest $US2.46trn worth of treasuries.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BLOOMBERG LP, UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, THOMSON REUTERS PLC, PERPETUAL LIMITED – ASX PPT

M&A seen as resilient to shocks

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 15 : 11-Apr-17

Data from Dealogic shows that $US11.9bn ($A15.9bn) worth of takeover bids for Australian companies were announced in the March 2017 quarter, which is 38 per cent lower year-on-year. Meanwhile, Deloitte has released a report which forecasts that global uncertainty will weigh upon mergers and acquisitions activity in 2017. However, the firm expects an upturn in M&A activity when the uncertainty abates. Timothy Mahapatra of Deloitte notes that deal-making is still a priority for many companies.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, DELOITTE TOUCHE TOHMATSU LIMITED, MACQUARIE CAPITAL PTY LTD, ALINTA ENERGY (AUSTRALIA) PTY LTD, CHOW TAI FOOK ENTERPRISES LIMITED, RIO TINTO LIMITED – ASX RIO, YANCOAL AUSTRALIA LIMITED – ASX YAL, JP MORGAN AUSTRALIA LIMITED

Bond’s grandson bets big on future of cobalt

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Original article by James Frost
The Australian Financial Review – Page: 13 & 16 : 14-Mar-17

Terra Capital’s main resources fund delivered an annualised return of 21 per cent from its formation in 2010 up until 31 January 2017. The fund avoids large stocks like BHP Billiton and Rio Tinto, preferring to focus on smaller stocks in the resources sector. Founder Jeremy Bond, who is a grandson of the late Alan Bond, says cobalt stocks have become part of its portfolio recently, due to cobalt being a major component of the type of batteries used in electric cars.

CORPORATES
TERRA CAPITAL PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, STANDARD AND POOR’S ASX 300 RESOURCES INDEX, STANDARD AND POOR’S ASX SMALL RESOURCES INDEX, ECOBALT SOLUTIONS INCORPORATED, EQUATOR RESOURCES LIMITED – ASX EQU, BATTERY MINERALS RESOURCES LIMITED