K: Financial and Insurance Services

Wilson tips difficult six months for stocks

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 31-May-16

The WAM Leaders fund debuted on the Australian sharemarket on 30 May 2016, after raising $A394.3m via an IPO. The listed investment company will invest in S&P/ASX 200 stocks, with a focus on growth-oriented large-capitalisation stocks that are undervalued. Veteran fund manager Geoff Wilson says the fund will not invest in the top-20 stocks at present, as they have performed poorly for investors over the last 12 months. He expects market conditions to be challenging for the next six months.

CORPORATES
WAM LEADERS LIMITED – ASX WLE, STANDARD AND POOR’S ASX 200 INDEX, BHP BILLITON LIMITED – ASX BHP, TELSTRA CORPORATION LIMITED – ASX TLS, WOOLWORTHS LIMITED – ASX WOW, WESFARMERS LIMITED – ASX WES, RIO TINTO LIMITED – ASX RIO, WAM CAPITAL LIMITED – ASX WAM, ARISTOCRAT LEISURE LIMITED – ASX ALL, TPG TELECOM LIMITED – ASX TPM, VOCUS COMMUNICATIONS LIMITED – ASX VOC, MAGELLAN GLOBAL EQUITIES FUND (MANAGED FUND) – ASX MGE

National accounts, US data to steer market sentiment

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Original article by Mark Mulligan
The Australian Financial Review – Page: 22 : 30-May-16

Futures traders expect the Australian sharemarket to gain 23 points when trading resumes on 30 May 2016, after the benchmark S&P/ASX 200 closed above 5,400 in the previous trading session. Local economic figures to be released in the coming week includes current account and GDP data for the March quarter, while investors will also be awaiting the release of key US economic indicators, including the latest wages and consumer confidence data.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BLOOMBERG LP, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION

Industrials good value, says UBS

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 22 : 30-May-16

UBS strategist David Cassidy notes that Australian industrial stocks are currently trading at more than 18 times forward earnings. In contrast, the long-term average is about 16 times. However, Cassidy has identified a number of industrial stocks that he says still represent value for investors. His top picks include Aristocrat Leisure, Orora, Resmed, Treasury Wine Estates, Crown Resorts and Vocus Communications.

CORPORATES
UBS HOLDINGS PTY LTD, ARISTOCRAT LEISURE LIMITED – ASX ALL, ORORA LIMITED – ASX ORA, RESMED INCORPORATED – ASX RMD, TREASURY WINE ESTATES LIMITED – ASX TWE, CROWN RESORTS LIMITED – ASX CWN, VOCUS COMMUNICATIONS LIMITED – ASX VOC, BRAMBLES LIMITED – ASX BXB, SIRTEX MEDICAL LIMITED – ASX SRX, ANSELL LIMITED – ASX ANN, COMPUTERSHARE LIMITED – ASX CPU, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, INCITEC PIVOT LIMITED – ASX IPL, QANTAS AIRWAYS LIMITED – ASX QAN

It’s Harry at No 1

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Original article by John Stensholt
The Australian Financial Review – Page: 1 & 2 : 27-May-16

Property developer Harry Triguboff has displaced Gina Rinehart as Australia’s wealthiest individual. Triguboff is ranked first on the 2016 "BRW" Rich 200 List, with estimated wealth of $A10.62bn. Anthony Pratt is the nation’s second-richest person, with a $A10.35bn fortune. Rinehart’s wealth has fallen from $A14.02bn in 2015 to just $A6.6bn, ranking her fourth. The combined wealth of the Rich 200 has risen by almost one per cent in 2016, to a record $A197.3bn. The list includes 53 billionaires, while 19 people appear on the exclusive list for the first time.

CORPORATES
MERITON APARTMENTS PTY LTD, WESTFIELD CORPORATION – ASX WFD, CHADSTONE SHOPPING CENTRE, BLACKMORES LIMITED – ASX BKL, WORLEYPARSONS LIMITED – ASX WOR

Capex collapse as mining investment boom unwinds

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Original article by Daniel Palmer
The Australian – Page: 31 : 27-May-16

The Australian Bureau of Statistics has reported that capital expenditure on buildings and equipment fell by 5.2 per cent in the March 2016 quarter, compared with expectations of a 3.5 per cent decline. Capex in the mining sector fell by 12 per cent and non-mining capex was down 0.4 per cent. Meanwhile, the latest figures show that capex is forecast to total $A89.2bn in 2016-17, compared with a previous forecast of $A82.6bn.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, CAPITAL ECONOMICS LIMITED, COMMONWEALTH SECURITIES LIMITED

Business Confidence plunges in May – down 9.1% to 111.9 following Federal Budget and Election uncertainty

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 26-May-16

A Roy Morgan Business Single Source survey has found that Australian business confidence fell by 9.1 per cent to 111.9 in May 2016. Business confidence is now at its lowest since a 2016 low of 110.6 in January. The fall in Business Confidence comes even after a slight improvement on the Australian sharemarket in May. However, the large drop in Business Confidence is likely more tied to a poorly received Federal Budget in early May and the uncertainty surrounding the upcoming Federal Election. The weakest indicators in May relate to the upcoming year, which suggests the impact of election uncertainty. Net expectations of business performance over the next 12 months have dropped to 20.6ppts (down 17.5ppts in May) and net views of whether the next 12 months will be a "good/bad time to invest" are now 12.1ppts (down 14.2ppts).

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, MORGAN POLL, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, DCNS SA

Trimmed down miners tipped as next hot sector

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 27-May-16

UBS Small Companies Fund portfolio managers Stephen Wood and David Haddad are upbeat about the outlook for smaller Australian-listed mining companies. They note that many small-capitalisation mining groups have significantly reduced their costs over the last five years, which has made them attractive to investors. UBS favours stocks such as Fortescue Metals Group, Sundance Resources, Whitehaven Coal, Galaxy Resources, Orocobre and Pilbara Minerals.

CORPORATES
UBS HOLDINGS PTY LTD, FORTESCUE METALS GROUP LIMITED – ASX FMG, SUNDANCE RESOURCES LIMITED – ASX SDL, WHITEHAVEN COAL LIMITED – ASX WHC, GALAXY RESEARCH AND PLANNING PTY LTD, OROCOBRE LIMITED – ASX ORE, PILBARA MINERALS LIMITED – ASX PLS, CITIGROUP PTY LTD

ASX earnings likely to get better, say fund managers

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 17 & 22 : 27-May-16

Australia’s benchmark S&P/ASX 200 Index has gained almost 10 per cent in the last seven weeks, prompting speculation as to whether the rally can be sustained. The market is now trading at a price-to-earnings ratio of about 16 times earnings, compared with its long-run average of around 14 times. However, Nader Naeimi of AMP Capital is upbeat about the earnings outlook for listed companies, and notes that even a modest increase in earnings will be sufficient to bolster the market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, AMP CAPITAL INVESTORS LIMITED, BEL-RAY AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, FIDELITY INVESTMENTS AUSTRALIA LIMITED, CITIGROUP PTY LTD, EQUITY TRUSTEES LIMITED – ASX EQT

Morgan Stanley adds to gloom with 1pc rate tip

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 26-May-16

Investment bank Morgan Stanley has forecast that the Reserve Bank of Australia will reduce the cash rate from 1.75 per cent to just one per cent by mid-2017. Chris Nicol and Daniel Blake of Morgan Stanley expect more aggressive monetary policy easing due to factors such as the need to reduce the value of the Australian dollar. They note that banks in particular will be adversely affected by a much lower cash rate, although there is likely to be a minimal impact on consumer stocks.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Negative yields could be on the way to Australia’s market

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Original article by Vesna Poljak, Jonathan Shapiro
The Australian Financial Review – Page: 21 & 26 : 26-May-16

The yield on Australian government bonds recently reached a record low of 2.2 per cent, and Arif Husain of T. Rowe Price has warned that yields may eventually fall into negative territory. The head of international fixed income says investors should consider whether bonds continue to provide the level of income and stability they require. He favour Serbian bonds for income and Swedish covered bonds for stability, with the latter hedged in Australian dollars.

CORPORATES
T ROWE PRICE GROUP INCORPORATED