BUSINESS FORECASTING – AUSTRALIA

Queue for new share listings shrinks after 18pc loss last year

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Original article by Michael Bailey
The Australian Financial Review – Page: 17 : 31-Jan-19

HLB Mann Judd expects Australia’s IPO market to remain subdued in 2019, after a poor performance in 2018. Companies that listed in 2018 had shed an average of 18 per cent of their value by the end of the year. IPO activity was also lower, with the number of floats falling from 110 in 2017 to just 93. Marcus Ohm of HLB Mann Judd notes that the 17 companies that have applied to list on the sharemarket so far in 2019 are seeking to raise just $179m in total.

CORPORATES
HLB MANN JUDD, IFLIX LIMITED, NETFLIX INCORPORATED, VIVA ENERGY GROUP LIMITED – ASX VEA, CORONADO GLOBAL RESOURCES INCORPORATED – ASX CRN, L1 LONG SHORT FUND LIMITED – ASX LSF, ADRIATIC METALS PLC – ASX ADT, EXOPHARM LIMITED – ASX EX1, ELIXINOL GLOBAL LIMITE – ASX EXL

Tough earnings season ahead as pressure builds

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Original article by David Rogers
The Australian – Page: 27 : 31-Jan-19

Tony Brennan of Citigroup says earnings guidance in the February 2019 reporting season is likely to be influenced by factors such as the slowdown in Australia’s housing market and falling business sentiment. Brennan says companies in a range of sectors have downgraded their earnings forecasts in recent months, and this may be reflected in the upcoming profit reporting season. The S&P/ASX 200 has gained 4.3 per cent so far in 2019, and Citigroup still expects it to test the 6,300-point level by the end of the year.

CORPORATES
CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CORELOGIC AUSTRALIA PTY LTD

Housing faces year of downturn

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Original article by Turi Condon
The Australian – Page: 17 : 25-Jan-19

National Australia Bank now expects dwelling prices in Sydney and Melbourne to fall by 15 per cent from peak to trough. NAB’s latest survey of property industry professionals shows that respondents generally expect New South Wales and Victoria to incur the biggest fall in housing prices over the next several years, although prices are also tipped to fall or remain flat outside of the two largest capitals. NAB’s separate survey of consumers shows that they are more upbeat about the outlook for the housing market than property professionals.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CREDIT SUISSE (AUSTRALIA) LIMITED, CORELOGIC AUSTRALIA PTY LTD, AMP CAPITAL INVESTORS LIMITED

OZ says copper won’t be hit by slowdown

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Original article by Simon Evans
The Australian Financial Review – Page: 19 : 25-Jan-19

OZ Minerals CEO Andrew Cole is confident that strong demand for copper and the lack of major new discoveries means the copper price will ride out any downturn in the global economy. Meanwhile, production at OZ Minerals’ Carrapateena mine in South Australia is scheduled to begin in the final quarter of 2019, and Cole says it should reach full production within 18 months. He is also optimistic that the Prominent Hill mine’s will remain in production beyond 2030, when it is currently slated to close.

CORPORATES
OZ MINERALS LIMITED – ASX OZL, ANGLO AMERICAN PLC, VALE SA, MMX MINERACAO E METALICOS SA

Aussie tipped to dive 15pc this year

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Original article by Timothy Moore
The Australian Financial Review – Page: 31 : 25-Jan-19

Capital Economics has downgraded its forecast for the Australian dollar in 2019. The firm has warned that the currency could test $US0.60 and remain at around this level in 2020. It had previously expected the currency to trade at about $US0.65 in 2019 and $US0.70 in the following year. Capital Economics is also bearish about the outlook for Australia’s key export commodities, iron ore and coal, while it expects official interest rate cuts in 2019.

CORPORATES
CAPITAL ECONOMICS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

UBS upbeat Foxtel is pressing right buttons on Kayo launch

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Original article by Max Mason
The Australian Financial Review – Page: 21 : 24-Jan-19

Foxtel launched its Kayo Sports streaming video service in November, allowing consumers to access it without the need for a pay-TV subscription. UBS believes that Kayo Sports could enable Foxtel to increase its market penetration, which has remained at around 30 per cent for the last decade. The UBS analysts concede that Kayo is likely to cannibalise Foxtel’s subscriber base, but they say that this will be offset by increased revenue and gross margins as Foxtel’s overall market penetration rises.

CORPORATES
FOXTEL MANAGEMENT PTY LTD, KAYO SPORTS, UBS HOLDINGS PTY LTD, STAN ENTERTAINMENT PTY LTD, NETFLIX INCORPORATED, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, AUSTRALIAN FOOTBALL LEAGUE, NATIONAL RUGBY LEAGUE

Investors eye modest REIT return in 2019: Citi

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 32 : 24-Jan-19

Citigroup has forecast a total return of five per cent for Australian real estate investment trusts in 2019. The sector delivered an overall return of 2.9 per cent in 2018, although Citi analysts note that the spread between the best and worst performers was the widest since the global financial crisis. Citi is bearish about the outlook for retail REITs, although the firm has upgraded its rating on several residential REITs to a ‘buy’.

CORPORATES
CITIGROUP PTY LTD, DEXUS – ASX DXS, STOCKLAND – ASX SGP, LEND LEASE GROUP LIMITED – ASX LLC, ABACUS PROPERTY GROUP – ASX ABP, GOODMAN GROUP – ASX GMG, CHARTER HALL GROUP – ASX CHC, WESTFIELD CORPORATION, UNIBAIL-RODAMCO

Runaway train set to derail BHP earnings

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Original article by Perry Williams
The Australian – Page: 15 & 16 : 23-Jan-19

BHP has advised that it produced 135 million tonnes of iron ore in the first half of 2018-19, with output falling by four million tonnes due to a train derailment in the Pilbara in early November. BHP’s copper output in turn was affected by problems at the Olympic Dam mine in South Australia and the Spencer mine in Chile. Shaw & Partners says BHP can still meet its full-guidance provided it has a strong second half. BHP shares closed 1.3 per cent lower at $32.77 on 22 January.

CORPORATES
BHP GROUP LIMITED – ASX BHP, SHAW AND PARTNERS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, VERTIUM ASSET MANAGEMENT PTY LTD, ORD MINNETT GROUP LIMITED

CBA dividend cut on the cards as sell-offs create an earnings hole

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Original article by Misa Han
The Australian Financial Review – Page: 21 : 22-Jan-19

Richard Wiles of Morgan Stanley suggests that the Commonwealth Bank of Australia may have to reduce its dividend payout ratio following a series of asset sales. CBA exited the life insurance sector in 2018 and secured a deal to sell Colonial First State Global Asset Management. It also proposed to spin-off its wealth management and mortgage broking operations. CBA paid a fully franked full-year dividend of $4.31 per share in fiscal 2018, an increase of $0.02.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MORGAN STANLEY AUSTRALIA LIMITED, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, COLONIAL FIRST STATE GROUP LIMITED, COUNT FINANCIAL LIMITED, FINANCIAL WISDOM LIMITED, AUSSIE HOME LOANS LIMITED, COUNTPLUS LIMITED – ASX CUP, MORTGAGE CHOICE LIMITED – ASX MOC, SOCIETYONE AUSTRALIA PTY LTD

Rio Tinto eyes cash returns, record tonnage

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Original article by Melissa Yeo
The Australian – Page: 16 : 22-Jan-19

Glyn Lawcock of UBS says Rio Tinto could potentially expand its share buyback program and pay a special dividend in 2019 using the proceeds of asset sales. He estimates that the resources group still has about $U4.4bn on hand from asset sales that could be returned to shareholders. Meanwhile, UBS forecasts that Rio Tinto will produce 353 million tonnes of iron ore in 2019, compared with the miner’s own guidance of 338 million to 350 million tonnes.

CORPORATES
RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED