BUSINESS FORECASTING – AUSTRALIA

Bidders are swinging hard for assets in M&A frenzy

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 17 : 10-Oct-18

Data from Dealogic shows that some $US88bn ($124bn) worth of mergers and acquisitions have been announced in Australia so far in 2018. This compares with $US89.3bn for the whole of 2017. Bankers and lawyers expect M&A activity to remain strong, with cashed-up local private equity firms competing with foreign players. Recently announced M&A transactions include KKR’s bid for MYOB and Affinity Equity Partners’ deal to buy Scottish Pacific Group.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, KKR AND COMPANY LP, MYOB GROUP LIMITED – ASX MYO, AFFINITY EQUITY PARTNERS (AUSTRALIA) PTY LTD, SCOTTISH PACIFIC GROUP LIMITED – ASX SCO, PACIFIC EQUITY PARTNERS PTY LTD, LIFEHEALTHCARE GROUP LIMITED, NEXTDC LIMITED – ASX NXT, ASIA PACIFIC DATA CENTRE GROUP – ASX AJD, APA GROUP – ASX APA, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, TRANSURBAN GROUP LIMITED – ASX TCL, WESTCONNEX, WESTFIELD CORPORATION, MINTER ELLISON, SIRTEX MEDICAL LIMITED, CDH INVESTMENTS FUND MANAGEMENT COMPANY, GREENHILL AND COMPANY, NM ROTHSCHILD AUSTRALIA HOLDINGS PTY LTD, WESFARMERS LIMITED – ASX WES, UBS HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE CAPITAL PTY LTD

Wesfarmers to outline Coles move

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Original article by Eli Greenblat
The Australian – Page: 19 : 4-Oct-18

There is speculation that Wesfarmers could release the scheme booklet for its proposed demerger of Coles before 15 October, when the supermarket chain will announce its sales figures for the first quarter of 2018-19. JPMorgan has upgraded its forecast for same-store sales growth from 2.5 per cent to four per cent. In contrast, the firm has scaled back Woolworths’ same-store sales growth expectations from 1.8 per cent to 1.3 per cent. However, Shaun Cousins of JPMorgan expects Woolworths to outperform Coles in the medium-term.

CORPORATES
WESFARMERS LIMITED – ASX WES, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS SUPERMARKETS, WOOLWORTHS GROUP LIMITED – ASX WOW, JP MORGAN AUSTRALIA LIMITED

Risk of credit crunch is real and rising, UBS warns

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Original article by James Frost
The Australian Financial Review – Page: 16 : 2-Oct-18

Jonathan Mott of UBS has told clients that Australian banks’ profits are likely to come under pressure in the next several years as a result of the financial services royal commission. He says the risk of a credit crunch has been heightened following the release of the inquiry’s interim report. Mott adds that amongst other things, the final report is likely to recommend extending responsible lending obligations to small and medium enterprises and an overhaul of the way banks verify the expenses of borrowers.

CORPORATES
UBS HOLDINGS PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Beach Energy shares soar on growth plans

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Original article by Matt Chambers
The Australian – Page: 22 : 28-Sep-18

Beach Energy currently produces 26-28 million barrels of oil equivalent each year, but it has outlined plans to increase this to 34-40 million boe by 2022-23. The company will also seek to lift its free cash flow to $2.3bn within five years. The Lattice Energy assets, which Beach bought from Origin Energy for $1.59bn in 2017, will be a major growth driver. Beach took on $US1.58bn worth of debt to finance the acquisition, but CEO Matt Kay expects the company to be almost debt-free by the end of 2019-20.

CORPORATES
BEACH ENERGY LIMITED – ASX BPT, LATTICE ENERGY LIMITED, ORIGIN ENERGY LIMITED – ASX ORG, NEW ZEALAND OIL AND GAS LIMITED, OMV AG, SANTOS LIMITED – ASX STO

Santos planning to double gas output by 2025 thanks to Quadrant buy

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Original article by Matt Chambers
The Australian – Page: 17 & 27 : 27-Sep-18

Oil and gas major Santos has forecast that its annual production could top 100 million barrels of oil equivalent by 2025. The proposed acquisition of Quadrant Energy and its Dorado oil find will be the main driver of growth in output. Santos has also told analysts that production in the Cooper Basin could rise by around 20 per cent by 2025, while MD Kevin Gallagher says the Narrabri coal seam gas project could further boost the company’s output if it receives government approval.

CORPORATES
SANTOS LIMITED – ASX STO, QUADRANT ENERGY PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, HARBOUR ENERGY LIMITED, BEACH ENERGY LIMITED – ASX BPT, CREDIT SUISSE (AUSTRALIA) LIMITED

China looks to Australian gas in trade war

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Original article by Glenda Korporaal
The Australian – Page: 19 & 27 : 26-Sep-18

Wang Shouwen, China’s vice-minister of commerce, has signalled that the nation could increase its LNG imports from Australia as a result of the trade war with the US. China retaliated to the Trump administration’s latest round of tariff hikes by imposing a tariff of 10 per cent on US LNG imports, and this could rise to 25 per cent. The tariff on US LNG will give Australian producers a price advantage, and could ensure that new LNG projects in Australia and Papua New Guinea proceed.

CORPORATES
CHINA. MINISTRY OF COMMERCE, WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Sport can save free-to-air: Netflix founder

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Original article by Yolanda Redrup
The Australian Financial Review – Page: 28 : 24-Sep-18

Marc Randolph, the co-founder of subscription video-on-demand giant Netflix, says commercial free-to-air TV networks must adapt to changes in how consumers view content. Randolph notes that consumers increasingly prefer to binge-watch content such as drama; he has also stressed the importance of live content such as sports for traditional broadcasters, noting that viewers have not yet embraced such content via Netflix. Seven West Media CEO Tim Worner says that while live content is important for TV broadcasters, general entertainment remains a key element of the Seven Network’s programming.

CORPORATES
NETFLIX INCORPORATED, SEVEN WEST MEDIA LIMITED – ASX SWM, SEVEN NETWORK LIMITED, FOXTEL MANAGEMENT PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, NINE NETWORK AUSTRALIA LIMITED, SINGTEL OPTUS PTY LTD, AMAZON.COM INCORPORATED, ENGLISH PREMIER LEAGUE, TELSTRA CORPORATION LIMITED – ASX TLS, AUSTRALIAN FOOTBALL LEAGUE, NATIONAL RUGBY LEAGUE, OVO MOBILE

Fortescue flags earlier start for higher grade iron ore exports

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 21-Sep-18

Pure-play iron ore producer Fortescue Metals Group has advised that it will begin exporting ore with an iron content of 60.1 per cent in December. Fortescue had previously expected to begin shipments of the higher-grade West Pilbara Fines product during the first half of 2019. Fortescue’s new Eliwana mine will be a key source of the new iron ore blend, and the company expects annual shipments of West Pilbara Fines to be around 40 million when production at Eliwana begins. Fortescue has forecast that it will export 5-10 million tonnes of West Pilbara Fines in 2018-19.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG

Tariff war fuels LNG prospects

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Original article by Matt Chambers, Perry Williams
The Australian – Page: 17 & 20 : 20-Sep-18

Saul ­Kavonic of Credit Suisse says China’s move to impose a tariff on LNG imports from the US will make Australian-sourced gas more price-competitive. China has announced plans to subject US LNG to a tariff of 10 per cent, which will rise to 25 per cent in 2019, in retaliation for the Trump administration’s plans for similar tariff hikes on $US200bn worth of Chinese goods. The growing US-China trade war could also increase the likelihood that proposed LNG projects in Australia and Papua New Guinea will proceed.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, RBC CAPITAL MARKETS, S&P GLOBAL PLATTS, CITIGROUP PTY LTD, PETROCHINA COMPANY LIMITED, IGM LIMITED, LIQUEFIED NATURAL GAS LIMITED – ASX LNG, WOOD MACKENZIE, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Shutdowns to hit China coal hardest

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 19-Sep-18

New Hope Corporation has posted a 2017-18 underlying profit of $253m, which is 96 per cent higher than previously. The result was underpinned by higher commodity prices and increased production. Meanwhile, CEO Shane Stephan forecasts that demand for Australian coal will remain strong over the next six months, despite looming industrial production cutbacks in China. He argues that the traditional winter shutdown in China primarily reduces demand for local rather than imported coal, which tends to be of higher quality.

CORPORATES
NEW HOPE CORPORATION LIMITED – ASX NHC, RIO TINTO LIMITED – ASX RIO