BUSINESS FORECASTING – AUSTRALIA

Price boom powers big iron’s profits

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Original article by Sarah Turner, Jenny Wiggins
The Australian Financial Review – Page: 13 & 16 : 18-Jan-21

The spot price of iron ore peaked at $US172.36 a tonne during the week ended 15 January. Milford Asset Management’s William Curtayne says earnings forecasts for Australia’s major iron ore producers will need to be significantly upgraded if the price of the steel input remains at around $US165/tonne. Jason Teh of Vertium Asset Management also anticipates strong growth in dividend payouts at BHP, Rio Tinto and Fortescue Metals Group, as well as the potential for special dividends and share buybacks. The surging price of iron ore will also boost federal government revenue.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, MILFORD ASSET MANAGEMENT LIMITED, VERTIUM ASSET MANAGEMENT PTY LTD

Rise in failures a pointer to future

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Original article by Patrick Commins
The Australian – Page: 17 : 15-Jan-21

Michael Fung of PwC and Sal Algeri from Deloitte expect the rate of business failures in Australia to be higher than usual in 2021. The federal government has wound back some of the COVID-19 support measures that helped businesses to stay afloat during the virus-induced economic downturn, while the JobKeeper scheme is slated to be phased out in March. Data from the Australian Securities & Investments Commission supports the view that a rise in insolvencies is likely; an average of 60 companies were placed in external administration in the final two weeks of 2020, compared with 13 during the same period in 2019.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, DELOITTE TOUCHE TOHMATSU LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Investment bankers brace for deal blitz

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Original article by Tim Boyd
The Australian Financial Review – Page: 6 : 11-Jan-21

Australian investment bankers are upbeat about the outlook for mergers and acquisitions activity in 2021. John Pickhaver of Macquarie Capital says local companies are likely to attract interest from foreign suitors, given Australia’s comparative success in combating COVID-19. James Disney of Credit Suisse expects private equity firms to actively pursue acquisitions in 2021. There was a spike in M&A activity in the fourth quarter of 2020, although data from Dealogic shows that the value of announced deals for the full year reached a 10-year low of $US63.2bn ($81.4bn).

CORPORATES
MACQUARIE CAPITAL PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, DEALOGIC (AUSTRALIA) PTY LTD

New year tech floats pipeline bulging after late 2020 surge

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Original article by Yolanda Redrup
The Australian Financial Review – Page: 13 & 14 : 11-Jan-21

Beforepay, Marketplacer and Vinomofo are among the companies that are believed to be looking to pursue an IPO in 2021. Technology stocks are expected to be among the leading IPO candidates again, following the sharemarket debuts of companies such as Nuix and Hipages in late 2020. ASX Limited’s Max Cunningham says the success of Nuix’s IPO demonstrates the strong interest in high-growth technology companies. However, Paul Bassat of Square Peg Capital says companies should delay an IPO if they have doubts about being ready to go public.

CORPORATES
BEFOREPAY, MARKETPLACER, VINOMOFO, NUIX LIMITED – ASX NXL, HIPAGES GROUP HOLDINGS LIMITED – ASX HPG, ASX LIMITED – ASX ASX, SQUARE PEG CAPITAL PTY LTD

Nick Scali upgrades profit as retailers end 2020 on a high

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Original article by James Fernyhough
The Australian Financial Review – Page: 13 & 16 : 6-Jan-21

Shares in furniture retailer Nick Scali rose to record highs during trading on 5 January after it advised that it expected its profit for the six months to 31 December would be $40.5 million, double the result for the previous corresponding period. The company also stated that its sales for the past three months were up by 58 per cent. Meanwhile, Sydney retailers other than those in the Sydney CBD have indicated that they saw strong foot traffic for the Boxing Day sales; National Retail Association CEO Dominique Lamb noted the Sydney CBD had been a "ghost town".

CORPORATES
NICK SCALI LIMITED – ASX NCK, NATIONAL RETAIL ASSOCIATION LIMITED

Australia’s iron ore miners cashing in

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Original article by Shane Wright
The Age – Page: Online : 21-Dec-20

The federal Department of Industry has revised its export earnings forecasts in response to a surge in the iron ore price. It had forecast in September that the nation’s iron ore producers would boast sales of about $97bn in 2020-21, but this has now been upgraded to $123bn. The forecast for iron ore sales in 2021-22 has in turn been upgraded from $80bn to $95bn. However, thermal coal exports are expected to be lower in 2020-21 due to China’s restrictions on imports from Australia. Meanwhile, the nation’s overall resources and energy exports are now expected to total $278.7bn in 2020-21; this is $22.3bn higher than was forecast in September, but $11.9bn lower than in 2019-20.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Tough market sours outlook for resources

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Original article by Perry Williams
The Australian – Page: 13 & 16 : 23-Nov-20

A new report from the federal government notes that Australia’s resource and energy sector made final investment decisions on $39bn worth of projects in the year to 31 October, which is 30 per cent higher than previously. The total value of the sector’s investment pipeline has risen to $334bn in 2020. However, the Department of Industry, Science, Energy & Resources’ latest Major Projects report warns that investment is unlikely to return to the levels seen during the last boom in the minerals and energy sector.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Dividend payouts fall 50pc in quarter

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 23-Nov-20

Data from Janus Henderson shows that Australian-listed companies paid out $US9.6bn ($13.4bn) worth of dividends in the September quarter, which is 47.8 per cent lower than the same period in 2019. This was primarily due to reduced dividends from three of the major banks, while a number of companies chose to withhold dividends. Jane Shoemake of Janus Henderson says payout ratios in Australia were too high and a "reset" was needed. Janus Henderson expects dividend payouts to rise in the second quarter of 2021.

CORPORATES
JANUS HENDERSON GROUP PLC – ASX JHG

Analysts tip $11bn profits for banks in messy accounting year

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 26-Oct-20

The ANZ Bank, Westpac and National Australia Bank will report their financial results for the year to 30 September in the next two weeks. Analysts expect Australia’s major banks to book a combined profit of about $11bn, with the Commonwealth Bank having reported its full-year results in August. The full-year results will be affected by factors such as remediation charges, asset sales and Westpac’s recent settlement with Austrac.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Big banks’ wealth retreat may be short-lived

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 22 : 16-Oct-20

IOOF CEO Renato Mota does not think Australia’s big banks will be involved in the wealth management sector over the next five years, although he expects them to return to the sector eventually. The major banks have either exited the sector or are in the process of doing so as a result of damning revelations at the Hayne royal commission. Netwealth’s joint MD Matt Heine notes that banks also got out of wealth management in the UK but re-entered the sector within 10 years, although "with very different propositions". Hub24 MD Andrew Alcock says the thought of the banks returning to wealth management does not perturb him.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, NETWEALTH GROUP LIMITED – ASX NWL, HUB24 LIMITED – ASX HUB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB