BUSINESS FORECASTING – AUSTRALIA

Former insiders cast doubt on company trading update

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 8 : 23-Jan-18

Listed real estate firm McGrath advised the ASX of an earnings downgrade on 22 January. McGrath reported that it expects to make a loss of $A50,000 for the first half of 2017-18, although internal documents provided to a newspaper suggested that the figure might be a lot higher. Past employees of McGrath suggest that the figures it provided to the ASX were somewhat optimistic. It is also understood that Peter Malouf recently resigned as head of training at McGrath, as did Michael Conolly as head of network property management.

CORPORATES
McGRATH LIMITED – ASX MEA

UBS warning on household debt

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 21 : 19-Jan-18

New figures show that Australia’s household debt-to-income ratio has risen by three per cent to a record 199.7 per cent, which UBS notes is one of the world’s highest. The increase is largely due to the Australian Bureau of Statistics’ decision to include the debt of self-managed superannuation funds in the key indicator for the first time. UBS has forecast that the debt-to-income ratio will peak at around 205 per cent, and it has warned that rising household debt may affect demand for housing credit and the earnings of major banks. However, UBS is upbeat about the outlook for non-bank lenders.

CORPORATES
UBS HOLDINGS PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Coking coal headaches prompt BHP to cut production guidance

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Original article by Matt Chambers
The Australian – Page: 15 & 16 : 19-Jan-18

BHP Billiton has advised that its overall production for 2017-18 is expected to be six per cent higher than previously. It had forecast seven per cent growth in production in October. Meanwhile, BHP’s coking coal production fell by eight per cent during the second quarter, to 10 million tonnes, but its iron ore output in the Pilbara increased by 11 per cent to a record 72 million tonnes. BHP will report its half-year results in February, with analysts expecting a underlying interim net profit of $US4.5bn ($5.6bn), compared with $US3.2bn previously.

CORPORATES
BHP BILLITON LIMITED – ASX BHP

Health premium rises tipped

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Original article by Sarah-Jane Tasker, Rachel Baxendale
The Australian – Page: 15 : 18-Jan-18

There is speculation that private health insurance premiums will rise by an average of four per cent in 2018. Macquarie Group analysts estimate that Medibank and NIB will increase their premiums by an average of 3.85 per cent and 3.8 per cent respectively. Macquarie has increased its share price targets for both insurers. Federal Health Minister Greg Hunt expects the lowest increase in health insurance premiums for 17 years. He will announce the premium increases in the next several weeks.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. DEPT OF HEALTH, AUSTRALIAN MEDICAL ASSOCIATION LIMITED

OZ looks to build on copper’s solid foundation

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Original article by Paul Garvey
The Australian – Page: 15 : 18-Jan-18

OZ Minerals expects copper production at its Prominent Hill mine in South Australia to be within the range of 100,000 to 110,000 tonnes in 2018, and 95,000 to 105,000 tonnes in 2019. Its previous guidance was for output of 90,000 to 100,000 tonnes in both years. Copper production at Prominent Hill totalled 112,008 tonnes in 2017, at an average cash cost of $US0.83 per pound. Meanwhile, OZ will invest some $A500m on development of its Carrapateena copper mine in 2018, while it has allocated at least $A38m to an exploration program in South Australia.

CORPORATES
OZ MINERALS LIMITED – ASX OZL

Resurgent Aussie dollar heads back above US80c as commodity prices boom

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Original article by David Rogers
The Australian – Page: 13 & 18 : 16-Jan-18

The Australian dollar rose above $US0.79 in local trading on 15 January, and National Australia Bank estimates that the currency’s fair value in the near-term is $US0.80. Ray ­Attrill of NAB says the currency could reach its 2017 peak of $US0.8125 unless the US dollar rebounds, while Sean Callow of Westpac is also upbeat about the currency’s near-term outlook. Aside from US dollar weakness, the Australian dollar has benefited from a rally in the price of key commodities over the last month.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, IG MARKETS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

Rio, BHP output boosts payout hopes

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Original article by Matt Chambers
The Australian – Page: 15 & 17 : 15-Jan-18

Deutsche Bank expects Rio Tinto to report three per cent growth in iron ore output in the Pilbara for the December 2017 quarter, to 87.7 million tonnes, while BHP Billiton’s Pilbara production is forecast to rise by 10 per cent to a record 70.9 million tonnes. Meanwhile, Hayden Bairstow of Macquarie Group expects Rio Tinto to pay a 2017 final dividend of $US1.95 per share, for a full-year payout of $US3.05 per share. Analysts generally also expect BHP to increase its dividend payout for the 2017-18 financial year. Both companies may also boost returns to shareholders via the proceeds of asset sales.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, DEUTSCHE BANK AG, MACQUARIE GROUP LIMITED – ASX MQG, BLOOMBERG LP, LIBERTY HOUSE GROUP, PACIFIC ALUMINIUM PTY LTD, SAMARCO MINERACAO SA, VALE SA

Rio could surprise on ore exports

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 23 : 11-Jan-18

UBS estimates that Rio Tinto’s Pilbara iron ore shipments rose to a record 90.2 million tonnes in the December 2017 quarter, putting it on track to meet its full-year guidance of 330 million tonnes. According to UBS’s forecast, Rio Tinto’s shipments rose by 17 per cent month-on-month in December, to 32.5 million tonnes. Rio Tinto ultimately aims to lift annual shipments to 360 million tonnes, although its Pilbara rail network currently has a capacity of about 330 million tonnes. UBS estimates that the Pilbara shipments of BHP Billiton and Fortescue Metals Group for the quarter totalled 71.3 million tonnes and 40.5 million tonnes respectively.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, UBS HOLDINGS PTY LTD, ROY HILL HOLDINGS PTY LTD

ACCC seeks fines, jail for cartels

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Original article by Patrick Durkin
The Australian Financial Review – Page: 1 & 6 : 9-Jan-18

The Australian Competition & Consumer Commission will ramp up its crackdown on cartel activity in 2018. Chairman Rod Sims expects the ACCC to launch criminal cartel proceedings against up to four Australian companies and their executives, although he has declined to identify them. Senior executives face massive fines and up to 10 years in jail for engaging in cartel activity. Meanwhile, Sims anticipates an increase in merger activity in 2018, particularly in the media sector in the wake of the Federal Government’s cross-media ownership reforms.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, VISY INDUSTRIES AUSTRALIA PTY LTD, NIPPON YUSEN KAISHA LINE, KAWASAKI KISEN KAISHA LIMITED, FACEBOOK INCORPORATED, GOOGLE INCORPORATED, AMAZON.COM INCORPORATED, OOH!MEDIA LIMITED – ASX OML, APN OUTDOOR GROUP LIMITED – ASX APO, SOUTH32 LIMITED – ASX S32, CAMP AUSTRALIA PTY LTD, JAG, TABCORP HOLDINGS LIMITED – ASX TAH, TATTS GROUP LIMITED – ASX TTS, AUSTRALIA. COMPETITION TRIBUNAL, BP AUSTRALIA LIMITED, WOOLWORTHS GROUP LIMITED – ASX WOW, AUSTRALIA. PRODUCTIVITY COMMISSION, PACIFIC NATIONAL PTY LTD, AURIZON HOLDINGS LIMITED – ASX AZJ, MURRAY GOULBURN CO-OPERATIVE COMPANY LIMITED, SAPUTO INCORPORATED, MANTRA GROUP LIMITED – ASX MTR, ACCOR SA

Late splurge sparks hopes for 2018 M&A

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 15 & 20 : 18-Dec-17

Data from Dealogic shows that $US86.9 billion worth of mergers and acquisitions had been announced in Australia as at 15 December 2017, which is 3.8 per cent lower than at the same time in 2016. Likewise, the value of announced M&A deals globally has fallen by 4.6 per cent to $US3.5 trillion. However, Nick Sims of Goldman Sachs notes that there has been an upturn in M&A activity in Australia and globally during the December quarter, which is expected to continue in 2018. Meanwhile, the total value of offshore acquisitions made by Australian companies has risen by 75 per cent so far in 2017, to $US26.3 billion.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, GOLDMAN SACHS AUSTRALIA PTY LTD, MACQUARIE CAPITAL PTY LTD, WESTFIELD CORPORATION – ASX WFD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AWE LIMITED – ASX AWE, INTEGRAL DIAGNOSTICS LIMITED – ASX IDX, SANTOS LIMITED – ASX STO, HARBOUR ENERGY LIMITED, 21ST CENTURY FOX INCORPORATED, WALT DISNEY COMPANY, CVS HEALTH CORPORATION, AETNA INSURANCE COMPANY, HERBERT SMITH FREEHILLS PTY LTD, NUFARM LIMITED – ASX NUF, LINK ADMINISTRATION HOLDINGS LIMITED – ASX LNK