K64 Auxiliary Finance and Insurance Services

Capex takes back seat as optimism stalls

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Original article by Vesna Poljak
The Australian Financial Review – Page: 15 : 2-Sep-16

Businesses are still reluctant to increase their capital investments. Figures released on 1 September 2016 suggest that $A105.2 billion will be spent on capital investments in 2016-17 which is unchanged in non-mining terms. Investors who rely on dividends are likely to benefit from this trend as companies will return some of their capital to them as dividends.

CORPORATES
RIO TINTO LIMITED – ASX RIO, JB HI-FI LIMITED – ASX JBH, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, NICK SCALI LIMITED – ASX NCK, BHP BILLITON LIMITED – ASX BHP

Commodity troubles weigh on ASX

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 2-Sep-16

The S&P/ASX 200 Index fell 17 points, or 0.3 per, to 5,415.6 on 1 September 2016. Investor sentiment was negatively affected by the weakness in share prices in the US and a fall in oil prices due to a larger-than-expected increase in US inventories. Santos and Origin Energy both lost 3.2 per cent in value. Katana Asset Management portfolio manager Romano Sala Tenna expects crude oil prices to continue to range between $US40 ($A53) and $US50 a barrel.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BHP BILLITON LIMITED – ASX BHP, NEWCREST MINING LIMITED – ASX NCM, NORTHERN STAR RESOURCES LIMITED – ASX NST, SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, KATANA ASSET MANAGEMENT LIMITED

ASX ends earnings season on sour note

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Original article by Jens Meyer, Patrick Commins
The Australian Financial Review – Page: 28 : 1-Sep-16

The S&P/ASX 200 index closed 0.8 per cent lower at 5,433.0 on 31 August 2016. Mining and energy stocks were out of favour. Analysts are rather disappointed with the earnings season which ended on 31 August. Goldman Sachs found only five companies whose performance was judged impressive: Fortescue, Seven Group Holdings, GWA Group, JB Hi-Fi and Mayne Pharma.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, GOLDMAN SACHS AUSTRALIA PTY LTD, FORTESCUE METALS GROUP LIMITED – ASX FMG, SEVEN GROUP HOLDINGS LIMITED – ASX SVW, GWA GROUP LIMITED – ASX GWA, JB HI-FI LIMITED – ASX JBH, MAYNE PHARMA GROUP LIMITED – ASX MYX, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN

‘Sell everything’ call a distant memory

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 19-Aug-16

Global sharemarkets have defied forecasts in January 2016 of a major slump, with most key indices having recovered from a sell-off in February. Andrew Mitchell of Ophir Asset Management says equities should continue to rise, unless there is a "black swan" event. Many fund managers increased their portfolios’ exposure to cash holdings following the Australian market’s downturn in April 2015, but its rebound from 2016 lows has prompted some to reinvest in equities.

CORPORATES
OPHIR ASSET MANAGEMENT PTY LTD, ROYAL BANK OF SCOTLAND GROUP PLC, FTSE 100 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, KATANA ASSET MANAGEMENT LIMITED, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, DOW JONES INDUSTRIAL AVERAGE INDEX, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Bankers, lawyers to get busy as merger deals poised to pick up

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 19 : 12-Aug-16

Data from Dealogic shows that the value of announced mergers and acquisitions deals in Australia in the year-to-date has fallen to an 11-year low of $US36.3bn. However, the Real Flow Predictor report from Intralinks suggests that there will be an upturn in announced M&As in the final quarter of 2016. Karen Evans-Cullen of law firm Clayton Utz is also upbeat about the outlook for M&A activity.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, INTRALINKS PTY LTD, CLAYTON UTZ, AUSGRID PTY LTD, ASCIANO LIMITED – ASX AIO, BROOKFIELD INFRASTRUCTURE PARTNERS LP, QUBE PROPERTY GROUP PTY LTD, THE GOOD GUYS, NATURE’S CARE, PORT OF MELBOURNE, STATE GRID CORPORATION OF CHINA, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY

That high P/E for a stock may not be that high a P/E after all

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Original article by Philip Baker
The Australian Financial Review – Page: 26 : 9-Aug-16

Australia’s benchmark S&P/ASX 200 Index currently boasts a forward price/earnings ratio of 16 times, while its long-term average is around 14.5 times. In contrast, the Dow Jones Industrial Average and the S&P 500 boast forward P/E ratios of about 18 and 20 times. Meanwhile, many individual stocks in the ASX/200 boast P/E ratios of more than 20 times. Clime Investment Management argues that the elevated P/E ratios of some top-20 stocks may not be justified.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, CLIME ASSET MANAGEMENT PTY LTD, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, RAMSAY HEALTH CARE LIMITED – ASX RHC, REA GROUP LIMITED – ASX REA, COCHLEAR LIMITED – ASX COH, CSL LIMITED – ASX CSL, BLOOMBERG LP

Strategists see little to fire the ASX 200 past 5500 by end of year

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 1 & 11 : 9-Aug-16

Australia’s benchmark S&P/ASX 200 Index closed at 5,537.8 points on 8 August 2016, but opinion is divided on the level at which it will be trading by the end of the year. Morgan Stanley still expects the ASX 200 to fall to 4,800 by years’ end, although Citigroup, UBS and Credit Suisse forecast that it will be trading at around 5,500. Meanwhile, Tony Brennan of Citigroup expects it to be trading at 5,750 in mid-2017.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WOOLWORTHS LIMITED – ASX WOW

Reporting season may test resilience of ASX

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 20 : 8-Aug-16

Futures traders expect the Australian sharemarket to gain 31 points when trading resumes on 8 August 2016, following a positive lead from Wall Street. The reporting season will continue to be a focus for investors in the coming week, with the Commonwealth Bank, REA Group, Telstra and Cochlear among the companies that are slated to release their latest financial result. The Reserve Bank of New Zealand’s monthly board meeting and Chinese economic data will also attract investors’ attention.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, REA GROUP LIMITED – ASX REA, TELSTRA CORPORATION LIMITED – ASX TLS, COCHLEAR LIMITED – ASX COH, RESERVE BANK OF NEW ZEALAND, AGL PETROLEUM, TRANSURBAN GROUP LIMITED – ASX TCL, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, UNITED STATES. FEDERAL RESERVE BOARD, STANDARD AND POOR’S 500 INDEX, RESERVE BANK OF AUSTRALIA, PERPETUAL INVESTMENTS, TD SECURITIES

Lower rates help stocks but won’t spur growth

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Original article by David Rogers
The Australian – Page: 31 : 4-Aug-16

Australia’s S&P/ASX 200 gained 6.3 per cent in July 2016, but it has shed 2.2 per cent since the Reserve Bank reduced the cash rate to a record low on 2 August. However, equities are likely to benefit from a likely trend for self-managed superannuation funds to reduce their exposure to cash as returns from such investments fall. The outlook for interest rates in Australia and abroad is also likely to ensure that price-earnings ratios remain elevated for some time.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, CREDIT SUISSE (AUSTRALIA) LIMITED

Post-Brexit rally tipped to continue

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Original article by David Rogers
The Australian Financial Review – Page: 32 : 2-Aug-16

Australia’s S&P/ASX 200 gained 6.3 per cent in July 2016, and it has risen by 11 per cent since falling sharply after the UK voted to leave the European Union. The benchmark index is likely to continue to perform well in August, regardless of whether the Reserve Bank decides to reduce the cash rate. The bourse is benefiting from expectations that interest rates in Australia and overseas will remain low for some time. The latest GDP data in the US has dampened expectations that the Federal Reserve will ease monetary policy in 2016.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN