BUSINESS FORECASTING – AUSTRALIA

Iron ore fall may hit Rio, BHP capex

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Original article by Tess Ingram
The Australian Financial Review – Page: 1 & 6 : 14-Apr-15

Iron ore was trading at around $US47.53 per tonne on 13 April 2015, and some analysts are increasingly bearish about its outlook. Citigroup now expects iron ore to average just $US37 per tonne for the remainder of 2015, while it is forecast to average $US40 for the following three years. Australian Treasurer Joe Hockey recently warned that iron ore could test the $US35 level. Analysts suggest that BHP Billiton and Rio Tinto could opt to reduce capital expenditure in response to such a scenario, rather than reduce their dividends

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FORTESCUE METALS GROUP LIMITED – ASX FMG, RBC CAPITAL MARKETS, CREDIT SUISSE (AUSTRALIA) LIMITED, ATLAB AUSTRALIA

Dividends to outgrow earnings

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Original article by Patrick Begley
The Australian Financial Review – Page: 21 : 14-Apr-15

There was five per cent growth in the dividend payouts of Australia’s 200 largest listed companies in the first half of 2014-15. In contrast, earnings increased by just two per cent. Morgan Stanley notes that the dividend payout ratio is currently 73 per cent, compared with an average of 65 per cent. However, the firm expects dividend payouts to keep growing faster than earnings, and says there is little chance of reduced dividend payouts unless earnings fall dramatically

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, BT AUSTRALIA PTY LTD, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, PENGANA CAPITAL LIMITED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX

Small miners in danger zone

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Original article by Patrick Begley, Max Mason, Tess Ingram
The Australian Financial Review – Page: 19 : 9-Apr-15

Iron ore was trading at $US48.06 per tonne on 8 April 2015, prompting analysts to warn that more smaller Australian-listed producers will come under pressure. Anna Kassianos of Platypus Asset Management says many smaller players are in "desperation mode", but notes that global iron ore supply would not be unduly affected by their collapse. Tim Schroeders of Pengana Capital believes that Fortescue Metals Group can ride out the slump in the iron ore price

CORPORATES
PLATYPUS ASSET MANAGEMENT PTY LTD, PENGANA CAPITAL LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI, GINDALBIE METALS LIMITED – ASX GBG, MOUNT GIBSON IRON LIMITED – ASX MGX, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, ARRIUM LIMITED – ASX ARI, MINERAL DEPOSITS LIMITED – ASX MDL, ALLAN GRAY AUSTRALIA PTY LTD, GRANGE RESOURCES LIMITED – ASX GRR, KATANA ASSET MANAGEMENT LIMITED, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, WATPAC LIMITED – ASX WTP

China steel output may fall 25pc

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Original article by Angus Grigg, Jennifer Hewett, Phillip Coorey, Amanda Saunders
The Australian Financial Review – Page: 1 & 6 : 7-Apr-15

The price of iron ore fell to $US47 per tonne in early April 2015, and it has now shed 63 per cent since the beginning of 2014. Australian economist Ross Garnaut has forecast that steel production in China will decline by 27 per cent in the next 15 years, which would in turn affect demand for Australian iron ore. Meanwhile, Chris Richardson of Deloitte Access Economics notes that the continued fall in the iron ore price will slash Australia’s national income and tax revenue

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, AUSTRALIA. DEPT OF INDUSTRY AND SCIENCE, VALE SA, ATLAS IRON LIMITED – ASX AGO, MOUNT GIBSON IRON LIMITED – ASX MGX, BC IRON LIMITED – ASX BCI

Will iron ore plunge below $US50

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Original article by Amanda Saunders
The Australian Financial Review – Page: 38 : 2-Apr-15

The iron ore price fell to around $US51 per tonne on 1 April 2015, compared with $US68 at the beginning of the year. However, Rio Tinto and BHP Billiton plan to keep ramping up production, and Glyn Lawcock of UBS says the price would have to fall to about $US30 for their iron ore operations to become unprofitable. Westpac expects the iron ore price to test the $US47 level in 2015

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, ABERDEEN ASSET MANAGEMENT LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI, ROY HILL HOLDINGS PTY LTD

Bankers pick plenty of M&A in 2015

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 25 : 26-Mar-15

Data from Dealogic shows that mergers and acquisitions activity involving Australian companies has topped $US32bn ($A40bn) so far in 2015. Major deals have included the acquisition of Toll Holdings by Japan Post and the proposed merger between Federation Centres and Novion Property Group. Geoff Joyce of Macquarie Capital is upbeat about the outlook for M&A activity, while Simon Ranson of JP Morgan notes that deal-making is being spurred on by reduced financing costs

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, TOLL HOLDINGS LIMITED – ASX TOL, JAPAN POST, FEDERATION CENTRES – ASX FDC, NOVION PROPERTY GROUP – ASX NVN, MACQUARIE CAPITAL PTY LTD, IFM INVESTORS PTY LTD, INDIANA TOLL ROAD CONCESSION COMPANY, KKR AND COMPANY LP, KOHLBERG KRAVIS ROBERTS AND COMPANY, VARDE PARTNERS INCORPORATED, DEUTSCHE BANK AG, GE CAPITAL CORPORATION, PACIFIC EQUITY PARTNERS PTY LTD, BAIN CAPITAL LLC, BRADKEN LIMITED – ASX BKN, UBS HOLDINGS PTY LTD, MORGAN STANLEY REAL ESTATE INVESTING, INVESTA PROPERTY GROUP, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, GPT GROUP – ASX GPT, MOELIS AND COMPANY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ESANDA FINANCE CORPORATION LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Bankers pick plenty of M&A in 2015

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 25 : 26-Mar-15

Data from Dealogic shows that mergers and acquisitions activity involving Australian companies has topped $US32bn ($A40bn) so far in 2015. Major deals have included the acquisition of Toll Holdings by Japan Post and the proposed merger between Federation Centres and Novion Property Group. Geoff Joyce of Macquarie Capital is upbeat about the outlook for M&A activity, while Simon Ranson of JP Morgan notes that deal-making is being spurred on by reduced financing costs

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, TOLL HOLDINGS LIMITED – ASX TOL, JAPAN POST, FEDERATION CENTRES – ASX FDC, NOVION PROPERTY GROUP – ASX NVN, MACQUARIE CAPITAL PTY LTD, IFM INVESTORS PTY LTD, INDIANA TOLL ROAD CONCESSION COMPANY, KKR AND COMPANY LP, KOHLBERG KRAVIS ROBERTS AND COMPANY, VARDE PARTNERS INCORPORATED, DEUTSCHE BANK AG, GE CAPITAL CORPORATION, PACIFIC EQUITY PARTNERS PTY LTD, BAIN CAPITAL LLC, BRADKEN LIMITED – ASX BKN, UBS HOLDINGS PTY LTD, MORGAN STANLEY REAL ESTATE INVESTING, INVESTA PROPERTY GROUP, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, GPT GROUP – ASX GPT, MOELIS AND COMPANY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ESANDA FINANCE CORPORATION LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Myer defends timing of downgrade

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Original article by Madeleine Heffernan
The Australian Financial Review – Page: 19 : 25-Mar-15

Myer Holdings’ disclosure practices came under scrutiny after its 2014-15 full-year earnings forecast was reduced by up to 24 per cent. Critics have argued that the group should have advised of the earnings downgrade when it revealed management changes several weeks earlier. However, Myer has told the ASX that its directors did not become aware that full-year profits would be lower than expected until the day before its interim results were released

CORPORATES
MYER HOLDINGS LIMITED – ASX MYR, ASX LIMITED – ASX ASX, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Corbett on mergers, mistakes, News

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Original article by Dominic White
The Australian Financial Review – Page: 30 : 23-Mar-15

Fairfax Media chairman Roger Corbett has welcomed proposed changes to Australia’s cross-media ownership laws. Corbett says Fairfax is in a strong position to participate in any rationalisation of the media industry, adding that there would be significant economies of scale from Fairfax merging with a TV network. Meanwhile, Corbett has stressed that the print editions of Fairfax’s major newspapers are not under threat, and concedes that the group should have bought Carsales.com in 2006

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, CARSALES.COM LIMITED – ASX CRZ, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, AUSTRALIA. DEPT OF COMMUNICATIONS, TEN NETWORK HOLDINGS LIMITED – ASX TEN, NINE NETWORK AUSTRALIA LIMITED, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SEVEN NETWORK LIMITED, SEVEN WEST MEDIA LIMITED – ASX SWM, WOOLWORTHS LIMITED – ASX WOW, DOMAIN.COM.AU, AUSTEREO GROUP LIMITED

Foxtel fights back as streaming services tempt subscribers

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Original article by Jared Lynch
The Australian Financial Review – Page: 30 : 23-Mar-15

A Venture Consulting surveys shows that around 250,000 of Foxtel’s customers intend to cancel or reduce their pay-TV subscription and start using a video streaming service in the next three months. Foxtel CEO Richard Freudenstein is confident that the company’s subscriber base will not be unduly affected by the growth of video streaming. Foxtel has joined forces with Seven West Media to establish its own streaming service

CORPORATES
FOXTEL MANAGEMENT PTY LTD, VENTURE CONSULTING PTY LTD, SEVEN WEST MEDIA LIMITED – ASX SWM, PRESTO ENTERTAINMENT PTY LTD, NETFLIX INCORPORATED, QUICKFLIX LIMITED – ASX QFX, STAN, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED – ASX FXJ, NEWS CORPORATION – ASX NWS, NEWS CORP AUSTRALIA PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, APPLE INCORPORATED, COMCAST CORPORATION, TIME WARNER INCORPORATED