BUSINESS FORECASTING – AUSTRALIA

ASIC to scrutinise Bellamy’s trading

roymorgansocial Leave a comment

Original article by Damon Kitney, Eli Greenblat
The Australian – Page: 22 : 6-Dec-16

The Australian Securities & Investments Commission will undertake an informal review of trading in the shares of Bellamy’s Australia prior to the release of an earnings update on 2 December 2016. The infant formula group’s shares fell by 43.52 per cent in response to the bearish guidance, and the stock shed another 4.23 per cent on 5 December. Bellamy’s had left its earnings guidance unchanged at the AGM in mid-October.

CORPORATES
BELLAMY’S AUSTRALIA LIMITED – ASX BAL, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, KATHMANDU HOLDINGS LIMITED – ASX KMD, BLACK PRINCE PRIVATE FOUNDATIONRST, ELLERSTON CAPITAL PTY LTD

Producers spot better returns

roymorgansocial Leave a comment

Original article by Matt Chambers
The Australian – Page: 21 : 6-Dec-16

Data from EnergyQuest shows that the spot price of gas in Adelaide rose to nearly $A10 per gigajoule in the September 2016 quarter, while the spot price in Sydney and Brisbane also rose. In contrast, the LNG netback price at the Wallumbilla processing hub in Queensland fell to around $A6 per gigajoule. EnergyQuest expects LNG producers to capitalise on the rise in gas prices by redirecting more of their output to the domestic market.

CORPORATES
ENERGYQUEST PTY LTD, QUEENSLAND CURTIS LNG PTY LTD, ROYAL DUTCH SHELL PLC

BHP considers selling Bowen Basin coal asset

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 15 : 5-Dec-16

A BHP Billiton spokesperson has downplayed speculation that the resources giant could seek a buyer for the Gregory Crinum complex in Queensland, which it owns in partnership with Mitsubishi. BHP had shelved plans to sell Gregory Crinum in 2013, due to a downturn in the coking coal price. However, talk of a possible sale has been prompted by the recent rally in the price of coking coal, which is fetching more than $US300 per tonne. BHP mothballed the Crinum longwall mine in 2015.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MITSUBISHI CORPORATION, ANGLO AMERICAN PLC, BECHTEL PTY LTD, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, BATCHFIRE RESOURCES, AUSTRALIAN PACIFIC COAL LIMITED – ASX AQC, WESFARMERS LIMITED – ASX WES, PEABODY ENERGY CORPORATION, SOUTH32 LIMITED – ASX S32, RBC CAPITAL MARKETS

Too early to say goodbye to tough times

roymorgansocial Leave a comment

Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 20 : 2-Dec-16

AWE Limited CEO David Biggs says that oil and producers are unlikely to increase their capital investment until the longer-term impact of OPEC’s production cuts on the crude oil price is known. He believes that a sustained price above $US60 per barrel will be needed for oil companies to commit to increased spending. Beach Energy director Jim McKerlie agrees that the OPEC deal will not be a "gamechanger" for oil and gas producers.

CORPORATES
AWE LIMITED – ASX AWE, BEACH ENERGY LIMITED – ASX BPT, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, HORIZON OIL LIMITED – ASX HZN, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, WORLEYPARSONS LIMITED – ASX WOR, WOODSIDE PETROLEUM LIMITED – ASX WPL, FAR LIMITED – ASX FAR, RBC CAPITAL MARKETS

Windfall for mining sector could hit $20b

roymorgansocial Leave a comment

Original article by Jens Meyer
The Australian Financial Review – Page: 25 : 1-Dec-16

Macquarie Group estimates that financial market analysts will need to increase their 2018 earnings forecasts for resources groups by around 200 per cent if commodity prices remain at around current levels. Macquarie’s Jason Todd notes that this equates to a profit boost of about $A20bn for the sector. He argues that many analysts have factored the rise in commodity prices into their forecasts for 2016-17, but many have neglected to upgrade their earnings forecasts beyond the current financial year.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S ASX 200 INDEX

Windfall for mining sector could hit $20b

roymorgansocial Leave a comment

Original article by Jens Meyer
The Australian Financial Review – Page: 25 : 1-Dec-16

Macquarie Group estimates that financial market analysts will need to increase their 2018 earnings forecasts for resources groups by around 200 per cent if commodity prices remain at around current levels. Macquarie’s Jason Todd notes that this equates to a profit boost of about $A20bn for the sector. He argues that many analysts have factored the rise in commodity prices into their forecasts for 2016-17, but many have neglected to upgrade their earnings forecasts beyond the current financial year.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S ASX 200 INDEX

Bleak view of Fairfax prospects

roymorgansocial Leave a comment

Original article by Darren Davidson
The Australian – Page: 21 : 29-Nov-16

Citi has a "sell" recommendation on Fairfax Media, and values the company at $A0.70 per share. In contrast, Citi values the Domain property listings business at $A0.80 per share. The firm estimates that Fairfax would incur total costs of about $A330m if it opted to discontinue its print newspapers to focus on its digital operations. However, Citi notes that Fairfax’s digital revenue fell by 4.5 per cent in the first half of 2015-16.

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, CITIGROUP PTY LTD, DOMAIN.COM.AU, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, CARSALES.COM LIMITED – ASX CAR, REA GROUP LIMITED – ASX REA

Goldman upbeat on local M&A activity

roymorgansocial Leave a comment

Original article by Carrie LaFrenz
The Australian Financial Review – Page: 16 : 28-Nov-16

Data from Dealogic shows that $US98.54bn ($A132.44bn) worth of mergers and acquisitions have been announced in Australia so far in 2016. Olivia Brown and Marissa Freund of Goldman Sachs are bullish about the outlook for M&A deals, and forecast strong activity in sectors such as healthcare, technology and retail. Freund expects strong interest in local companies from suitors in Asia, North America and Europe. Brown anticipates that Chinese companies will continue to be attracted to sectors that have export potential, such as consumer products and healthcare.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSGRID PTY LTD, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, TABCORP HOLDINGS LIMITED – ASX TAH, TATTS GROUP LIMITED – ASX TTS, BORAL LIMITED – ASX BLD, HEADWATERS INCORPORATED, OIL SEARCH LIMITED – ASX OSH, INTEROIL CORPORATION, PACIFIC BRANDS LIMITED, HANESBRANDS, UGL LIMITED – ASX UGL, CIMIC GROUP LIMITED – ASX CIM, KATHMANDU HOLDINGS LIMITED – ASX KMD, BRISCOE GROUP LIMITED, LAZARD ASSET MANAGEMENT LIMITED

BHP and Rio shareholders focus on debt

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 13 & 18 : 28-Nov-16

The rally in the price of iron ore and coal during 2016 has boosted the earnings of BHP Billiton and Rio Tinto, prompting speculation of capital management initiatives. However, Jason Kururangi of Aberdeen Asset Management argues that BHP should prioritise debt reduction and investment in new projects rather than returns to shareholders. Meanwhile, Jason Beddow of Argo Investments suggests that BHP and Rio should consider increasing returns to shareholders if commodity prices remain at a similar level in 12 months’ time.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, ABERDEEN ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, DEUTSCHE BANK AG, SOCIETE GENERALE AUSTRALIA LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED

Fat margin retailers must fear Amazon

roymorgansocial Leave a comment

Original article by Sue Mitchell
The Australian Financial Review – Page: 19 : 24-Nov-16

Roy Morgan Research CEO Michele Levine says Australian retailers with high margins, a large market share and growing online sales will be most vulnerable if Amazon enters the domestic market. Levine, who has presented Roy Morgan’s latest "State of the Nation" report on the retail sector, adds that Aldi and other international grocery chains with physical stores are a greater risk to Coles and Woolworths in the near-term, as most people still do not buy groceries online. Likewise, the low margins of consumer electronics retailers such as JB Hi-Fi means they are less vulnerable to competition from Amazon.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AMAZON.COM INCORPORATED, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, LIDL GMBH & CO KG, JB HI-FI LIMITED – ASX JBH, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, BABY BUNTING GROUP LIMITED – ASX BBN, MYER HOLDINGS LIMITED – ASX MYR, DAVID JONES LIMITED, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, BIG W DISCOUNT STORES, CITIGROUP PTY LTD