BUSINESS FORECASTING – AUSTRALIA

Retail decline threat to growth

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Original article by Eli Greenblat
The Australian – Page: 17 & 28 : 1-Jun-17

National Australia Bank forecasts that retail sales rose by 0.3 per cent during April 2017, although chief economist Alan Oster says this figure could be optimistic. Official data will be released on 1 June, but some observers believe that retail sales fell in April. Oster says the retail sector is already in recession, and he does not anticipate an improvement in the near-term. A survey on the spending behaviour of NAB customers has highlighted the difficult trading conditions for the retail sector.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CITIGROUP PTY LTD, MYER HOLDINGS LIMITED – ASX MYR, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, SUPER RETAIL GROUP LIMITED – ASX SUL, JB HI-FI LIMITED – ASX JBH, OROTONGROUP LIMITED – ASX ORL, THE REJECT SHOP LIMITED – ASX TRS, ADAIRS LIMITED – ASX ADH, RCG CORPORATION LIMITED – ASX RCG, GODFREYS GROUP LIMITED – ASX GFY, AP EAGERS LIMITED – ASX APE, AUTOMOTIVE HOLDINGS GROUP LIMITED – ASX AHG, DAVID JONES LIMITED, TOPSHOP, HERRINGBONE PTY LTD, RHODES AND BECKETT PTY LTD, DAVID LAWRENCE, PAYLESS SHOES PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, JP MORGAN AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY

Expect more shareholder activism Down Under, warns Credit Suisse

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 19 : 23-May-17

Chris Young of Credit Suisse says it was inevitable that activist hedge funds would target Australian companies. He adds that the investment bank’s research suggests that BHP Billiton will not be the only Australian company to attract the interest of activists. Young says the best defence against activists is for a company to ensure that it has the support of key shareholders. He also notes that the relatively small size of the Australian market means activist funds may get less traction than in the much larger US market.

CORPORATES
CREDIT SUISSE AG, BHP BILLITON LIMITED – ASX BHP, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, ELLIOTT MANAGEMENT CORPORATION, SAMSUNG ELECTRONICS COMPANY LIMITED, CANADIAN PACIFIC LIMITED, PERSHING SQUARE CAPITAL MANAGEMENT LP

Amazon effect puts IPOs under a cloud

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 : 16-May-17

The pending arrival of Amazon in Australia, along with reduced consumer spending, has made it less likely that three proposed IPOs in the retail sector will proceed. The IPOs in question are Retail Apparel Group, Quick Service Restaurant Holdings and Officeworks, with their combined value being put at $A2.4 billion. The lead managers behind Officeworks, which is a unit of Wesfarmers, have valued its IPO at between $A1.124 billion and $A1.5 billion, but the consensus of fund managers is that $A1.2 billion is as much as they would be willing to pay.

CORPORATES
AMAZON.COM INCORPORATED, RETAIL APPAREL GROUP PTY LTD, QUICK SERVICE RESTAURANTS HOLDINGS PTY LTD, OFFICEWORKS SUPERSTORES PTY LTD, WESFARMERS LIMITED – ASX WES, ARCHER CAPITAL PTY LTD, NAVIS CAPITAL PARTNERS LIMITED, YARRA CAPITAL GROUP PTY LTD, ARNHEM INVESTMENT MANAGEMENT PTY LTD, MACQUARIE CAPITAL PTY LTD, JP MORGAN AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, BINGO INDUSTRIES LIMITED – ASX BIN, ZIP INDUSTRIES AUSTRALIA, TAROCASH PTY LTD, YD PTY LTD, JOHNNY BIGG, CONNOR

NAB downplays ‘inevitable’ AAA rating loss

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Original article by Michael Roddan
The Australian – Page: 23 : 5-May-17

National Australia Bank has conceded that the loss of Australia’s coveted triple-A credit rating would result in a corresponding downgrade of the bank’s credit rating. However, group treasurer Shaun Dooley says this would have no impact on the bank’s domestic funding costs, while the cost of international funding would rise by about 10 basis points. Dooley adds that international investors have indicated that they would continue to invest in Australian banks if the nation’s credit rating were downgraded.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, DELOITTE ACCESS ECONOMICS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

Digital classifieds under the pump

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Original article by Stewart Oldfield
The Australian Financial Review – Page: 24 : 3-May-17

Deutsche Bank estimates that based on forecast earnings for 2018, online classified advertising companies REA Group, Seek and Carsales are trading at a 70 per cent premium to the broader industrial sector. However, while rising share prices have seen their combined market capitalisation top $A17bn, the three dominant players in real estate, jobs and automotive classifieds face potential headwinds, including competition from new and established rivals and a growing threat from social media companies such as Facebook.

CORPORATES
REA GROUP LIMITED – ASX REA, SEEK LEARNING PTY LTD, CARSALES.COM LIMITED – ASX CAR, DEUTSCHE BANK AG, FACEBOOK INCORPORATED, MORGANS FINANCIAL LIMITED, DOMAIN.COM.AU, FAIRFAX MEDIA LIMITED – ASX FXJ, COX AUTOMOTIVE, AUTOTRADER, CARSGUIDE, MORGAN STANLEY AUSTRALIA LIMITED, MAVERICK STRATEGIES, CITIGROUP PTY LTD, MONSTER WORLDWIDE INCORPORATED, INDEED INCORPORATED, CAREERBUILDER, RANDSTAD HOLDINGS NV

ANZ shares pummelled by ‘lower for longer’ outlook

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Original article by Richard Gluyas
The Australian – Page: 19 & 23 : 3-May-17

The ANZ Bank has posted a 2016-17 interim cash profit of $A3.4bn, which is 23 per cent higher than previously. However, most analysts had expected a half-year profit of between $A3.5bn and $A3.8bn. CEO Shayne Elliott is confident that ANZ can outperform its rivals in terms of profit growth, but he says the low-growth environment means it no longer expects revenue growth to outpace that of rival banks. Shareholders will receive an interim dividend of $A0.80 per share.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE RESEARCH EQUITIES, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA

Banks set for earnings boost from rate hikes

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Original article by James Frost, Jonathan Shapiro
The Australian Financial Review – Page: 13 & 16 : 1-May-17

The ANZ Bank, Westpac and National Australia Bank will release their 2016-17 interim results in early May 2017, while the Commonwealth Bank will release a trading update for the third quarter of its financial year. The "big four" banks are forecast to post a combined interim cash profit of around $A16bn. Earnings are expected to have been bolstered by the banks’ recent moves to lift their interest rates for investor and interest-only home loans. Citigroup forecasts that the rate rises will boost earnings per share by up to two per cent in 2017.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, 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, CITIGROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSBIL INVESTMENT MANAGEMENT LIMITED, UBS HOLDINGS PTY LTD, STANDARD CHARTERED BANK MALAYSIA BERHAD, STANDARD CHARTERED BANK PLC, DNR CAPITAL PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG

Murdoch holds the key to re-shaping television

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Original article by Aaron Patrick, Max Mason
The Australian Financial Review – Page: 36 & 37 : 1-May-17

Ten Network’s market capitalisation has slumped to just $A99.7m in the wake of a recent profit warning. The 7.7 per cent stake held by News Corporation’s co-chairman Lachlan Murdoch is now worth just $A7.7m, and there is speculation that News Corp ultimately wants to acquire the struggling TV network. Ten is seeking to renegotiate or terminate its content deals with CBS and 21st Century Fox, amid declining viewership of US TV shows in Australia. Ten also faces a deadline to repay or roll over a loan facility that has been guaranteed by Murdoch, James Packer and Bruce Gordon.

CORPORATES
TEN NETWORK HOLDINGS LIMITED – ASX TEN, NEWS CORPORATION – ASX NWS, NEWS CORP AUSTRALIA PTY LTD, FOXTEL MANAGEMENT PTY LTD, NOVA ENTERTAINMENT PTY LTD, CBS CORPORATION, 21ST CENTURY FOX INCORPORATED, CITIGROUP PTY LTD, WIN CORPORATION PTY LTD, NETFLIX INCORPORATED, STAN ENTERTAINMENT PTY LTD, YOUTUBE INCORPORATED, INSTAGRAM LLC, DISCOVERY COMMUNICATIONS INCORPORATED, REA GROUP LIMITED – ASX REA, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, CCZ STATTON EQUITIES PTY LTD, ITV NETWORK LIMITED, McKINSEY AND COMPANY, PROSIEBENSAT.1 MEDIA AG

Newcrest hit by power prices, Cadia damage

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Original article by Peter Ker, Tess Ingram
The Australian Financial Review – Page: 19 : 28-Apr-17

Newcrest Mining has warned that full-year gold production for 2016-17 is likely to be at the lower end of its guidance. Newcrest has also indicated that its Cadia gold mine in New South Wales is unlikely to return to full capacity for some time following an earthquake. Meanwhile, the company has advised of an increase of about 90 per cent in the base price it will pay for electricity at Cadia under a new supply agreement for 2017-18. Newcrest says it will seek a better supply deal.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, RBC CAPITAL MARKETS

Ten review to cut costs in ‘every dark corner’

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Original article by Mitchell Bingemann
The Australian – Page: 21 : 28-Apr-17

Ten Network has posted a 2016-17 interim loss of $A232.2m and advised that it expects to book a full-year underlying EBITDA loss of between $A25m and $A30m. CEO Paul Anderson has revealed plans for an 18-month "transformation program" that will seek to increase revenue and aggressively reduce costs. Ten’s directors have conceded that there is significant doubt about its ability to continue as a going concern, with a $A200m debt facility due to expire at the end of 2017.

CORPORATES
TEN NETWORK HOLDINGS LIMITED – ASX TEN, FOXTEL MANAGEMENT PTY LTD, WIN CORPORATION PTY LTD, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA