BUSINESS FORECASTING – AUSTRALIA

S&P warns of climate credit risks

roymorgansocial Leave a comment

Original article by David Ross
The Australian – Page: 15 : 18-Jan-23

S&P Global Ratings says the severity and frequency of bushfires and floods facing Australia is increasing. The firm has warned that the credit ratings of the nation’s banks, insurers, and state and local governments could potentially be downgraded if this trend continues. S&P Global Ratings adds that insurers face the greatest risk from weather-related events, given that they are set to experience two successive years of large losses.

CORPORATES
S&P GLOBAL RATINGS

Economic turmoil to weigh on M&A: Goldman

roymorgansocial Leave a comment

Original article by Joyce Moullakis
The Australian – Page: 15 : 14-Nov-22

Mark Sorrell of investment bank Goldman Sachs believes that global merger and acquisition activity will remain subdued until at least 2024. He notes that until recently, there had been widespread expectations that sentiment toward M&A deals would improve in the second half of 2023, but factors such as geopolitical tensions and aggressive interest rate increases have pushed back the likely time-frame for any rebound. Data from Refinitiv shows that there has been a 60 per cent decline in announced deals involving Australian companies in 2022, compared with the same time in 2021.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, REFINITIV AUSTRALIA PTY LTD

Gold miner St Barbara smashed by skills, gear shortage

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 18 & 24 : 19-Oct-22

St Barbara has advised that its gold production for 2022-23 will be within the range of 260,000 to 290,000 ounces. It had forecast full-year output of between 280,000 ounces and 315,000 ounces in mid-September. The company has attributed the production downward to labour shortages at its flagship Gwalia mine, which posted a significant fall in output for the September quarter. St Barbara sold 62,726 ounces of gold during the period, at an average price of $2,486 per ounce. Its shares closed nearly 22 per cent lower at $0.525 on Tuesday.

CORPORATES
ST BARBARA LIMITED – ASX SBM

Gas, coal and lithium drives export record

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 13 & 18 : 4-Oct-22

The Department of Industry, Science & Resources has forecast that the value of Australia’s commodity exports will rise to a record $450bn in 2022-23. It had previously forecast that revenue from commodity exports would fall to just $311bn in the current fiscal year, following a record $422bn in 2021-22. The revised forecast has been driven by expectations that the price of LNG, coal and lithium will stay high. Iron ore shipments are forecast to total $119bn in 2022-23.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE AND RESOURCES

Harvey says Australians are shopping like crazy

roymorgansocial Leave a comment

Original article by Kanika Sood
The Australian Financial Review – Page: 17 : 22-Dec-21

The Australian Retailers Association recently forecast that pre-Christmas consumer spending will total $58.8bn in 2021, which is in line with 2020. Harvey Norman is among the retailers that are enjoying strong sales in the lead-up to Christmas, with executive chairman Gerry Harvey noting that all of its stores have been very busy and demand has been strong across its product range. Harvey adds that retailers may offer smaller discounts than usual at the upcoming Boxing Day sales, given that supply chain issues have resulted in less stock to discount.

CORPORATES
AUSTRALIAN RETAILERS ASSOCIATION, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN

Odds of Crown buyout lengthen

roymorgansocial Leave a comment

Original article by Lachlan Moffet Gray
The Australian – Page: 17 : 28-Oct-21

The Star Entertainment Group and private equity firm Blackstone are seen as potential bidders for Crown Resorts, given that both have previously made takeover plays for the casinos operator. The sale and leaseback of Crown’s casinos could be attractive to potential suitors. However, Larry Gandler of Credit Suisse says the appointment of a special manager to supervise Crown for two years will most likely rule out any sale and leaseback arrangement during this period.

CORPORATES
CROWN RESORTS LIMITED – ASX CWN, THE STAR ENTERTAINMENT GROUP LIMITED – ASX SGR, THE BLACKSTONE GROUP LP, CREDIT SUISSE (AUSTRALIA) LIMITED

Lockdowns and supply chain squeeze to lead to earnings reset

roymorgansocial Leave a comment

Original article by Richard Henderson
The Australian Financial Review – Page: 29 : 13-Oct-21

Many Australian-listed companies withheld earnings guidance during the August reporting season, citing factors such as uncertainty arising from the COVID-19 pandemic. Investors will be hoping for greater clarity during the annual general meetings season, but Chris Nicol of Morgan Stanley says they are likely to be disappointed. He cautions that factors such as lockdowns and supply chain problems can be expected to weigh on earnings in the first half of 2021-22.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED

Coal boom to kick-start mines

roymorgansocial Leave a comment

Original article by Lachlan Moffet Gray, David Rogers
The Australian – Page: 13 & 19 : 29-Sep-21

The price of thermal coal shipped from Newcastle in New South Wales has reached a record high of $US204.75 per tonne. The thermal coal price has now risen by more than 270 per cent since reaching a 12- month low of $US54.70 in October 2020. The price of coking coal has in turn risen by 183 per cent since reaching a yearly low. National Party senator Matt Canavan says the record prices are unlikely to be sustained; however, he adds that the high prices will encourage Australian coal miners to expand production, particularly in Queensland’s Galilee Basin.

CORPORATES
NATIONAL PARTY OF AUSTRALIA

CBA buyback tipped as earnings swell

roymorgansocial Leave a comment

Original article by Joyce Moullakis
The Australian – Page: 18 : 9-Aug-21

The consensus of analysts polled by Bloomberg is for the Commonwealth Bank of Australia to post a 2020-21 cash profit of $8.62bn. This compares with $7.2bn for the previous financial year. CBA’s dividend payout for the full year is expected to be $3.427 per share, with investors having received an interim dividend of $1.50. Meanwhile, Brian Johnson of Jefferies expects CBA to return surplus capital to investors via a $5.5bn off-market buyback. National Australia Bank and the ANZ Bank both recently announced buybacks.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, JEFFERIES AND COMPANY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Price gap may trigger wave of oil, gas M&A

roymorgansocial Leave a comment

Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 12 & 14 : 7-Jul-21

Mark Busuttil of JP Morgan believes that some Australian-listed energy producers could become takeover targets due to the growing gap between oil and gas prices and their share prices. Potential targets could include Oil Search, Cooper Energy, Senex Energy and Carnarvon Petroleum. Busuttil says Beach Energy could potentially make a bid for Cooper Energy or Senex Energy, while he suggests that offshore players ExxonMobil and Total would be most likely to target Oil Search.

CORPORATES
OIL SEARCH LIMITED – ASX OSH, COOPER ENERGY LIMITED – ASX COE, SENEX ENERGY LIMITED – ASX SXY, CARNARVON PETROLEUM LIMITED – ASX CVN, EXXONMOBIL CORPORATION, TOTALENERGIES SE