BUSINESS FORECASTING – AUSTRALIA

AFIC warns on bank dividends

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Original article by Simon Evans
The Australian Financial Review – Page: 13 & 25 : 18-Oct-16

Australian Foundation Investment Company MD Ross Barker expects the S&P/ASX 200 to be trading at around its current level in 12 months’ time. However, he expects the 50 largest stocks to outperform small- and medium-capitalisation stocks over the next year. Barker does not anticipate any further easing of monetary policy and says there is potential for a rise in the cash rate before the end of 2017. He adds that the major banks may not be able to sustain their dividend payouts, while large miners could potentially increase their dividends in the next few years.

CORPORATES
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, TRANSURBAN GROUP LIMITED – ASX TCL, SYDNEY AIRPORT – ASX SYD, RESERVE BANK OF AUSTRALIA, WOOLWORTHS LIMITED – ASX WOW

Red flags to watch for in M&A season

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 16 : 18-Oct-16

Data from Mergermarket shows that the value of mergers and acquisitions fell by 20 per cent globally in the first nine months of 2016, to $US2.2trn ($A2.9trn). M&A activity in Australia is rising as the end of the calendar year approaches. Anthony Aboud of Perpetual has identified a number of factors which may indicate that a company is making acquisitions for the wrong reasons. These include pursuing deals solely in the interests of diversification, paying too much for goodwill and making acquisitions that are motivated by financial incentives.

CORPORATES
PERPETUAL LIMITED – ASX PPT, MERGERMARKET LIMITED, CIMIC GROUP LIMITED – ASX CIM, UGL LIMITED – ASX UGL, JB HI-FI LIMITED – ASX JBH, THE GOOD GUYS, FANTASTIC HOLDINGS LIMITED – ASX FAN, STEINHOFF INTERNATIONAL HOLDINGS LIMITED, FREEDOM FURNITURE, SNOOZE SLEEP WELL PTY LTD, THE GOLDMAN SACHS GROUP INCORPORATED, SLATER AND GORDON LIMITED – ASX SGH, QUINDELL PLC, PERPETUAL’S SHARE-PLUS LONG SHORT FUND

Property sentiment strengthens despite negatives

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Original article by Robert Harley
The Australian Financial Review – Page: 41 : 13-Oct-16

The ANZ/Property Council Survey of real estate and construction industry sentiment for the third quarter of 2016 shows an improvement of two percentage points in confidence. A net 29 per cent of property and construction executives and investors are optimistic about the prospects for the property sector over the next 12 months, compared with 27 per cent in the previous quarter. An improvement in confidence occurred in all states except Queensland and South Australia.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, PROPERTY COUNCIL OF AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH

Commodities surge lifts outlook

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Original article by Barry FitzGerald, David Rogers, Sue Neales
The Australian – Page: 19 & 31 : 13-Oct-16

Copper and uranium are Australia’s only major resources commodity exports that have not posted strong gains in 2016. Coking and thermal coal in particular have rallied in the year to date, and Paul Bloxham of HSBC believes that the nation’s "income recession" is over. He estimates that nominal GDP could be boosted by around two per cent if the rise in coal prices is sustained, a view shared by the ANZ Bank. There has also been a big rise in the export price of beef, although drought caused Australian shipment to fall in 2015-16.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MOODY’S INVESTORS SERVICE INCORPORATED, PEABODY ENERGY AUSTRALIA COAL PTY LTD, NIPPON STEEL AND SUMITOMO METAL CORPORATION, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, RABOBANK AUSTRALIA LIMITED

Amazon all set to flow here

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Original article by Max Mason
The Australian Financial Review – Page: 29 : 10-Oct-16

Amazon has declined to comment on speculation that its Prime Video subscription video-on-demand service could be launched in Australia in November 2016, to coincide with the global debut of "The Grand Tour". The program is hosted by former "Top Gear" presenters Jeremy Clarkson, Richard Hammond and James May. Amazon may opt to delay the local launch of its SVOD service until 2017, to enable it to build up a larger range of original and licensed content.

CORPORATES
AMAZON.COM INCORPORATED, NETFLIX INCORPORATED, STAN ENTERTAINMENT PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED – ASX FXJ, PRESTO ENTERTAINMENT PTY LTD, CBS CORPORATION, SHOWTIME, FOXTEL MANAGEMENT PTY LTD, HBO, GOODMAN GROUP – ASX GMG, SANDVINE INCORPORATED

BHP keeps the faith in US shale business

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Original article by Peter Ker
The Australian Financial Review – Page: 19 & 24 : 6-Oct-16

The head of BHP Billiton’s petroleum division, Steve Pastor, is upbeat about the group’s US shale operations. He is particularly bullish about the Permian shale field in West Texas, noting that it could potentially become the division’s biggest source of production and cash flow within five years. Meanwhile, Pastor says BHP will consider acquisitions that add value, but it will only pursue deals that are appropriately priced. He has also forecast a global oil shortage in 2017.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, BP PLC

Review may force funds to merge

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Original article by Michael Roddan
The Australian – Page: 23 : 22-Sep-16

Superannuation industry experts suggest that any move to introduce alternatives to the default super fund system could result in more consolidation in the sector. Potential options that have been canvassed by the Productivity Commission in an issues paper include a tender system for default funds. Financial Services Council CEO Sally Loane notes that smaller funds with high fees may be forced to merge if the default super regime is opened to more competition.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, FINANCIAL SERVICES COUNCIL, AUSTRALIAN INSTITUTE OF SUPERANNUATION TRUSTEES, RICE WARNER ACTUARIES PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Teoh focused on TPG future despite hurdles

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Original article by Max Mason
The Australian Financial Review – Page: 13/18 : 21-Sep-16

TPG Telecom has posted a 2015-16 net profit of $A384.6m, which is 71.6 per cent higher than previously. TPG anticipates that its underlying EBITDA for 2016-17 will be $A820m to $A830m, and capital expenditure will be between $A370m and $A420m. CFO Craig Levy has warned that the price ISPs pay for wholesale services from NBN Co are too high and will have to fall as more customers migrate to the national broadband network. TPG shares closed 21.4 per cent lower at $A9.28 on 20 September 2016.

CORPORATES
TPG TELECOM LIMITED – ASX TPM, NBN CO LIMITED, IINET LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, SINGTEL OPTUS PTY LTD, OPHIR ASSET MANAGEMENT PTY LTD

Orocobre tips ongoing demand for lithium

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Original article by Paul Garvey
The Australian – Page: 22 : 20-Sep-16

Australian-listed Orocobre has posted a 2015-16 loss of $US21.9m ($A29m). However, CEO Richard Seville is upbeat about the outlook for lithium, and he believes that producers will struggle to meet growing global demand. Orocobre produced 6,903 tonnes of lithium in 2015-16, and the group forecasts output of at least 15,000 tonnes in 2016-17. It has also advised that its Salar de Olaroz project in Argentina should reach nameplate capacity in the current financial year.

CORPORATES
OROCOBRE LIMITED – ASX ORE, GALAXY RESOURCES LIMITED – ASX GXY, PILBARA MINERALS LIMITED – ASX PLS, NEOMETALS LIMITED – ASX NMT

LNG plants set for $20bn energy boom

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Original article by Matt Chambers
The Australian – Page: 17 & 18 : 12-Sep-16

LNG producers may commit to new projects in coming years in order to capitalise on the fact that the North West Shelf and Darwin LNG processing plants will soon have spare capacity. Wood Mackenzie expects the plants to have spare capacity by 2021, as production at these projects declines. Saul Kavonic of Wood Mackenzie says the Scarborough or Greater Gorgon gas fields could potentially yield low-cost LNG by using the North West Shelf infrastructure.

CORPORATES
WOOD MACKENZIE, WOODSIDE PETROLEUM LIMITED – ASX WPL, BHP BILLITON LIMITED – ASX BHP, EXXONMOBIL CORPORATION, DARWIN LNG PTY LTD, NORTH WEST SHELF LNG PTY LTD, SANTOS LIMITED – ASX STO, CONOCOPHILLIPS, CITIGROUP PTY LTD, ORIGIN ENERGY LIMITED – ASX ORG, KAROON GAS AUSTRALIA LIMITED – ASX KAR