K64 Auxiliary Finance and Insurance Services

Slowdown is not a meltdown

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Original article by Jens Meyer
The Australian Financial Review – Page: 20 : 5-Jun-17

The Australian sharemarket fell 2.7 per cent during May 2017, compared with a 1.4 per cent gain for the S&P 500. The upcoming release of GDP data will be the next test for the market, with expectations that the economy expanded by 0.3 per cent during the March quarter and 1.6 per cent year-on-year. Weak consumer spending and doubts regarding the outlook for the housing market are key concerns for investors at present, although David Cassidy of UBS says fears about a housing market collapse are not warranted.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, UBS HOLDINGS PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MORGAN STANLEY AUSTRALIA LIMITED, NIKKEI 225 INDEX, AMAZON.COM INCORPORATED, MERRILL LYNCH (AUSTRALIA) PTY LTD, CITIGROUP PTY LTD, RESERVE BANK OF AUSTRALIA

Australia ‘must deal with quite spectacular housing bubble’

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Original article by David Rogers
The Australian – Page: 28 : 1-Jun-17

A sharp downturn in the residential property market and an economic slowdown in China are among the biggest risks to the Australian economy, according to Willem Buiter of Citigroup. The investment bank’s global chief economist warns that the Federal Government’s plans to invest $A75bn in infrastructure over 10 years will not be sufficient to offset the impact of a property market downturn. He says the Government must take action to ensure that the housing market has a soft landing.

CORPORATES
CITIGROUP INCORPORATED, THE GOLDMAN SACHS GROUP INCORPORATED, LONDON SCHOOL OF ECONOMICS, BANK OF ENGLAND, WORLD BANK, EUROPEAN COMMISSION, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CORELOGIC AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Bourse in $57bn wipe-out for May

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Original article by Chris Kohler
The Australian – Page: 28 : 1-Jun-17

The Australian sharemarket posted modest gains on 31 May 2017, with the S&P/ASX 200 adding 0.2 per cent to close at 5,724.6 points. National Australia Bank advanced 1.3 per cent to $A30.12 and Wesfarmers was up 1.1 per cent at $A42.70. However, Rio Tinto fell 0.7 per cent to $A62.81 and New Hope Corporation was down 11 per cent at $A1.62. The S&P/ASX 200 shed 3.4 per cent in May, and analysts note that the local market tends to underperform in June.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESFARMERS LIMITED – ASX WES, RIO TINTO LIMITED – ASX RIO, NEW HOPE CORPORATION LIMITED – ASX NHC, BHP BILLITON LIMITED – ASX BHP, NEW HOPE CORPORATION LIMITED – ASX NHC, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE GROUP LIMITED – ASX MQG, WOOLWORTHS LIMITED – ASX WOW, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, ARISTOCRAT LEISURE LIMITED – ASX ALL, AUTOMOTIVE HOLDINGS GROUP LIMITED – ASX AHG, SIRTEX MEDICAL LIMITED – ASX SRX, MYER HOLDINGS LIMITED – ASX MYR, SIGMA HEALTHCARE LIMITED – ASX SIG, QANTAS AIRWAYS LIMITED – ASX QAN, FAIRFAX MEDIA LIMITED – ASX FXJ, IG MARKETS LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Numbers look good, so where’s the euphoria?

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Original article by David Rogers
The Australian – Page: 28 : 31-May-17

Australian bank and resources stocks rallied on 30 May 2017, allowing the benchmark S&P/ASX 200 to finish in the black after reaching a three-month low early in the session. Meanwhile, Citigroup notes that investor sentiment is not sufficiently high that a market retreat is likely, despite key US indices being at or near record highs. However, the S&P/ASX 200 and the S&P 500 have tended to underperform in the month of June, shedding an average of 2.2 per cent and 1.5 per cent respectively over the last 10 years.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, CITIGROUP GLOBAL MARKETS INCORPORATED, DOW JONES INDUSTRIAL AVERAGE INDEX, NASDAQ COMPOSITE INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Sell in May: shares stay true to script

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Original article by David Rogers
The Australian – Page: 17 & 28 : 30-May-17

The S&P/ASX 200 has underperformed in the last month, reducing its gain so far in the 2016-17 financial year from 13.8 per cent to just 9.1 per cent. May 2017 is shaping up to be the worst month for the local bourse since January 2016, and the benchmark index is now well off the 6,000-point level that seemed within reach early in the month. Meanwhile, the uncertain economic outlook may weigh on investors in the near-term, with upcoming data expected to show GDP growth stalled in the March quarter.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, PERPETUAL INVESTMENTS, RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Expect more shareholder activism Down Under, warns Credit Suisse

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 19 : 23-May-17

Chris Young of Credit Suisse says it was inevitable that activist hedge funds would target Australian companies. He adds that the investment bank’s research suggests that BHP Billiton will not be the only Australian company to attract the interest of activists. Young says the best defence against activists is for a company to ensure that it has the support of key shareholders. He also notes that the relatively small size of the Australian market means activist funds may get less traction than in the much larger US market.

CORPORATES
CREDIT SUISSE AG, BHP BILLITON LIMITED – ASX BHP, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, ELLIOTT MANAGEMENT CORPORATION, SAMSUNG ELECTRONICS COMPANY LIMITED, CANADIAN PACIFIC LIMITED, PERSHING SQUARE CAPITAL MANAGEMENT LP

Amazon effect puts IPOs under a cloud

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 : 16-May-17

The pending arrival of Amazon in Australia, along with reduced consumer spending, has made it less likely that three proposed IPOs in the retail sector will proceed. The IPOs in question are Retail Apparel Group, Quick Service Restaurant Holdings and Officeworks, with their combined value being put at $A2.4 billion. The lead managers behind Officeworks, which is a unit of Wesfarmers, have valued its IPO at between $A1.124 billion and $A1.5 billion, but the consensus of fund managers is that $A1.2 billion is as much as they would be willing to pay.

CORPORATES
AMAZON.COM INCORPORATED, RETAIL APPAREL GROUP PTY LTD, QUICK SERVICE RESTAURANTS HOLDINGS PTY LTD, OFFICEWORKS SUPERSTORES PTY LTD, WESFARMERS LIMITED – ASX WES, ARCHER CAPITAL PTY LTD, NAVIS CAPITAL PARTNERS LIMITED, YARRA CAPITAL GROUP PTY LTD, ARNHEM INVESTMENT MANAGEMENT PTY LTD, MACQUARIE CAPITAL PTY LTD, JP MORGAN AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, BINGO INDUSTRIES LIMITED – ASX BIN, ZIP INDUSTRIES AUSTRALIA, TAROCASH PTY LTD, YD PTY LTD, JOHNNY BIGG, CONNOR

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