BUSINESS FORECASTING – AUSTRALIA

More oil, gas write-downs set to follow BHP’s lead

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 13 & 16 : 18-Jan-16

The downturn in the crude oil price prompted a number of Australian-listed energy groups to announce write-downs in 2015. The price of Brent crude oil closed at $US28.94 per barrel on 15 January 2016, coinciding with BHP Billiton’s announcement that its 2015-16 interim results are likely to include a $US7.2bn impairment charge on its oil and gas assets. Mark Busuttil of JP Morgan has forecast that Santos could announce a pre-tax write-off of about $A2bn.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SANTOS LIMITED – ASX STO, JP MORGAN AUSTRALIA LIMITED, WOODSIDE PETROLEUM LIMITED – ASX WPL, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, BEACH ENERGY LIMITED – ASX BPT, SENEX ENERGY LIMITED – ASX SXY, AWE LIMITED – ASX AWE, DRILLSEARCH ENERGY LIMITED – ASX DLS, RBC CAPITAL MARKETS, BLOOMBERG LP, STANDARD AND POOR’S CORPORATION, BG GROUP PLC, GLADSTONE LNG PTY LTD, AUSTRALIA PACIFIC LNG LIMITED

Is 2016 the year of media merger frenzy?

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Original article by Dominic White
The Australian Financial Review – Page: 13 & 16 : 12-Jan-16

Scrapping the "reach rule" and the "two-out-of three rule" is likely to be on the Australian Government’s agenda in 2016. Cross-media ownership reforms are tipped to prompt consolidation in the sector, which could include several media groups merging to form a multi-platform conglomerate. However, some industry experts believe that the value of media stocks will need to fall further in order to make a compelling case for such mega-mergers. News Corp now has exposure to newspapers, TV, radio and outdoor advertising, and it may pursue further expansion under relaxed media laws. This in turn may force some its rivals to amalgamate in order to remain competitive.

CORPORATES
NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, FOXTEL MANAGEMENT PTY LTD, TEN NETWORK HOLDINGS LIMITED – ASX TEN, APN NEWS AND MEDIA LIMITED – ASX APN, NOVA ENTERTAINMENT PTY LTD, FAIRFAX MEDIA LIMITED – ASX FXJ, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SEVEN WEST MEDIA LIMITED – ASX SWM, WIN CORPORATION PTY LTD, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, PRIME MEDIA GROUP LIMITED – ASX PRT, MACQUARIE MEDIA LIMITED – ASX MRN, ILLYRIA PTY LTD, MULTI CHANNEL NETWORK PTY LTD, GOOGLE INCORPORATED, NETFLIX INCORPORATED, AUSTRALIA. DEPT OF COMMUNICATIONS AND THE ARTS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, STAN ENTERTAINMENT PTY LTD, PRESTO ENTERTAINMENT PTY LTD, PACIFIC MAGAZINES PTY LTD, SEVEN GROUP HOLDINGS LIMITED – ASX SVW, BAUER MEDIA KG, AUSTRALIAN FOOTBALL LEAGUE, NATIONAL RUGBY LEAGUE, ALLAN GRAY AUSTRALIA PTY LTD, DOMAIN.COM.AU, McDONALD’S CORPORATION

Oil price drop to fuel Qantas profit

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Original article by Jamie Freed
The Australian Financial Review – Page: 15 : 11-Jan-16

Paul Butler of Credit Suisse says the sharp decline in the price of Brent crude oil and jet fuel in recent months should boost the earnings of Qantas over the next two years. Shareholders at the carrier’s 2015 annual meeting were told that its fuel bill for 2015-16 will be around $A3.61bn, but Butler forecasts that this could potentially fall by around $A110m. He adds that hedging could allow Qantas to slash its fuel costs by another $A160m in 2016-17.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, CREDIT SUISSE (AUSTRALIA) LIMITED, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, STANDARD AND POOR’S CORPORATION, MERRILL LYNCH (AUSTRALIA) PTY LTD, DEUTSCHE BANK AG

Rivals to gain from Dick Smith’s demise

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Original article by Jessica Gardner
The Australian Financial Review – Page: 15 : 7-Jan-16

Thomas Kierath of Morgan Stanley expects the collapse of Dick Smith to boost the annual sales of JB Hi-Fi and Harvey Norman by around $A200m apiece, and lift their net profits by up to $A20m. David Thomas of CLSA says JB Hi-Fi is likely to gain the most benefit from the closure of any Dick Smith stores, although Matthew Felsman of APP Securities notes that signs of slowing demand for Apple’s iPhone may hit JB Hi-Fi.

CORPORATES
DICK SMITH HOLDINGS LIMITED – ASX DSH, JB HI-FI LIMITED – ASX JBH, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, MORGAN STANLEY AUSTRALIA LIMITED, CLSA AUSTRALIA PTY LTD, APP SECURITIES PTY LTD, APPLE INCORPORATED, THE GOOD GUYS, WOW SIGHT AND SOUND PTY LTD, FORAGER FUNDS MANAGEMENT PTY LTD

Investors downbeat on ASX growth prospects

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Original article by Ruth Liew
The Australian Financial Review – Page: 17 : 6-Jan-16

Australia’s S&P/ASX 200 Index shed 1.3 per cent in 2015, and a survey by Investment Trends shows that investors expect the sharemarket to rise by less than five per cent in 2016. King Loong Choi of Investment Trends notes that investor sentiment is being affected by factors such as low interest rates, sharemarket volatility, the slowing Australian economy and the uncertain outlook for the Chinese economy.

CORPORATES
INVESTMENT TRENDS PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, GEM CAPITAL FINANCIAL ADVICE, HENDERSON GROUP PLC – ASX HGG, BHP BILLITON LIMITED – ASX BHP, QBE INSURANCE GROUP LIMITED – ASX QBE, MACQUARIE GROUP LIMITED – ASX MQG

Heavyweight miners predict little respite

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Original article by Perry Williams
The Australian Financial Review – Page: 11 & 22 : 4-Jan-16

Former Rio Tinto CEO Leigh Clifford says commodity prices may not rebound for another 3-5 years, and mining companies with high production costs in particular face challenging conditions. Former Orica chairman Malcolm Broomhead says action is needed to boost labour productivity, and he has urged the Australian Government to pursue reforms in areas such as industrial relations and taxation in order to boost productivity.

CORPORATES
RIO TINTO LIMITED – ASX RIO, ORICA LIMITED – ASX ORI, BHP BILLITON LIMITED – ASX BHP, QANTAS AIRWAYS LIMITED – ASX QAN, ASCIANO LIMITED – ASX AIO, KKR AND COMPANY LP

Advertising revenue predicted to hit $13.5b

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Original article by Max Mason
The Australian Financial Review – Page: 12 : 4-Jan-16

ZenithOptimedia forecasts that Australian advertising revenue will rise by three per cent in 2016, to $A13.5bn. Digital advertising revenue is expected to grow by 12.1 per cent to almost $A6bn, while outdoor advertising revenue will increase by 8.9 per cent to $A716 million. However, ZenithOptimedia anticipates 0.6 per cent growth in TV advertising revenue, while a sharp decline in newspaper and magazine advertising revenue is expected.

CORPORATES
ZENITH OPTIMEDIA

Deals boom set to gain new steam

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 1 & 18 : 4-Jan-16

Dealogic notes that some $US129.8bn ($A177.7bn) worth of mergers and acquisitions were announced in Australia during 2015. However, the value of completed deals fell from $US101.2bn to $US97.4bn. Tim Joyce of Macquarie Capital expects M&A activity to increase in 2016, while Aidan Allen of Citigroup anticipates that the retail sector will be among those to be targeted in 2016. He also expects more takeover activity among private equity firms.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, MACQUARIE CAPITAL PTY LTD, CITIGROUP PTY LTD, RBC CAPITAL MARKETS, DEUTSCHE BANK AG, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, OIL SEARCH LIMITED – ASX OSH, SANTOS LIMITED – ASX STO, SCEPTER PARTNERS, TRANSGRID, BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32, ASCIANO LIMITED – ASX AIO, BROOKFIELD INFRASTRUCTURE PARTNERS LP, QUBE HOLDINGS LIMITED – ASX QUB

Farmers applaud subsidy cut but say it’s just a start

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Original article by Joanna Mather
The Australian Financial Review – Page: 6 : 22-Dec-15

New South Wales wheat, barley and canola farmer John Booker has welcomed the World Trade Organization’s decision to abolish agricultural export subsidies. He does not expect to benefit immediately from the decision, but he is optimistic about the long-term gains. Tony Mahar of the National Farmers Federation argues that the domestic support subsidies that some countries provide to farmers must also be scrapped.

CORPORATES
WORLD TRADE ORGANIZATION, NATIONAL FARMERS’ FEDERATION LIMITED, CATTLE COUNCIL OF AUSTRALIA, AUSTRALIAN DAIRY INDUSTRY COUNCIL

Star Wars box office sales in hyperdrive, headed for $100m

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Original article by Primrose Riordan
The Australian Financial Review – Page: 3 : 21-Dec-15

Village Roadshow CEO Kirk Edwards says "Star Wars: The Force Awakens" could overtake "Avatar" as the highest-grossing film on record in Australia. The new Star Wars film’s local box-office takings exceeded $A25m on the weekend of 19-20 December 2015, and Edwards expects it to gross at least $A100m overall. It is estimated that the film’s global ticket sales have exceeded $US250m ($A348m) to date.

CORPORATES
VILLAGE ROADSHOW LIMITED – ASX VRL, RENTRAK CORPORATION, WALT DISNEY COMPANY