BUSINESS FORECASTING – AUSTRALIA

Rio Tinto primed for $5b buyback

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 5-Jan-15

Credit Suisse’s Paul McTaggart suggests that Rio Tinto may pursue an on-market share buyback worth up to $US4bn ($A5bn). He says the resources group could potentially reveal plans for a buyback in February 2015, while Glyn Lawcock of UBS believes that any such buyback will be worth between $US2bn and $US3bn. Both mining analysts also expect Rio Tinto to increase its underlying dividend. The dividend payout ratio was 35 per cent in calendar 2013

CORPORATES
RIO TINTO LIMITED – ASX RIO, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, GLENCORE PLC, BHP BILLITON LIMITED – ASX BHP, AUSTRALIA. DEPT OF INDUSTRY AND SCIENCE

Win for consumers as premiums to weaken

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Original article by Ruth Liew
The Australian Financial Review – Page: 17 : 16-Dec-14

Suncorp Group’s Anthony Day says a competitive market should result in lower commercial insurance premiums in 2015. The head of commercial insurance forecasts that insurance rates will stabilise after falling in the first several months of 2015. Meanwhile, Day says the recent storm in Brisbane is likely to cost Suncorp no more than $A250m in insurance claims

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, NATIONAL INSURANCE BROKERS ASSOCIATION OF AUSTRALIA, WILLIS GROUP HOLDINGS LIMITED

Free TV ad revenue to plummet

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Original article by Paul McIntyre
The Australian Financial Review – Page: 15 : 15-Dec-14

IPG Mediabrands expects digital media’s share of advertising revenue to rise from 36.5 per cent to 56 per cent over the next five years. The share of commercial free-to-air TV networks will fall from 26.6 per cent to just 19.9 per cent. The firm’s chief investment officer, Victor Corones, expects Australia’s advertising market to record overall growth of one per cent in 2014, rising to 3.8 per cent in 2015

CORPORATES
MEDIABRANDS AUSTRALIA PTY LTD, FACEBOOK INCORPORATED, QANTAS AIRWAYS LIMITED – ASX QAN, MAGNA GLOBAL PTY LTD, THE NIELSEN COMPANY (AUSTRALIA) PTY LTD, ASSOCIATION OF NATIONAL ADVERTISERS INCORPORATED, WAL-MART STORES INCORPORATED, FORD MOTOR COMPANY, NESTLE SA, MASTERCARD INTERNATIONAL INCORPORATED, PERNOD RICARD SA, CADREON PTY LTD, VERIZON COMMUNICATIONS INCORPORATED

Low premium rises tipped

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Original article by Ruth Liew
The Australian Financial Review – Page: 16 : 15-Dec-14

Insurance Australia Group’s Andy Cornish says the storm that hit Brisbane in late November 2014 should not have much impact on premiums. He forecasts a single-digit increase in its premiums for home and car insurance in 2015. The general insurer has received more than 15,000 claims arising from the storm, and it expects to pay out between $A140m and $A150m

CORPORATES
INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SUNCORP GROUP LIMITED – ASX SUN, NRMA LIMITED, CGU INSURANCE AUSTRALIA LIMITED, LUMLEY INSURANCE GROUP LIMITED, COLES INSURANCE

Dollar’s fall lifts retailers’ spirits

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Original article by Eli Greenblat
The Australian – Page: 21 : 10-Dec-14

The latest Deloitte Access Economics retail forecasts study shows that the sector can expect higher margins during the 2014 Christmas period, due to the fall of the Australian dollar against the US currency. The overall sales growth figure for the calendar year is tipped to be 5.4%, compared with 3% on average per annum since 2010. The Australian National Retailers Association (ANRA) also forecasts turnover in the second week of December to reach $A7.6bn. However ANRA CEO Anna McPhee notes that retail sector margins have declined in the past three years

CORPORATES
AUSTRALIAN NATIONAL RETAILERS ASSOCIATION LIMITED, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIAN BUREAU OF STATISTICS

Robots to take 500,000 jobs

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Original article by Jacob Greber
The Australian Financial Review – Page: 7 : 10-Dec-14

The Department of Industry’s "Australian Industry Report 2014" suggests that many white-collar jobs that involve routine tasks could automated in coming years. These include roles such as accountants, bank tellers, supermarket cashiers and pharmacists. Some 78.6 per cent of people in roles that are risk from automation hold a university degree. A report in 2013 found that around 47 per cent of jobs in the US could potentially be replaced by automation

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, AUSTRALIA. PRODUCTIVITY COMMISSION, OXFORD UNIVERSITY. OXFORD MARTIN SCHOOL

Advertising spending set for growth spike, says WPP

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Original article by Darren Davidson
The Australian – Page: 20 : 9-Dec-14

The advertising market in Australia is tipped to grow 4.1% to $A13.7bn in 2015, according to global market leader by revenue WPP. This compares with 2.8% and $A13.1bn for 2014, and is the best result since 2010. However WPP’s annual outlook report also shows that in the newspapers segment the decline will continue, with a fall of 9.5% to $A1.8bn. Online will experience strong growth, but less rapid than the 21.5% seen in 2013 and only coming in at 13.4% to $A5.7bn

CORPORATES
WPP GROUP PLC, GOOGLE INCORPORATED, FACEBOOK INCORPORATED, SEVEN WEST MEDIA LIMITED – ASX SWM, FOXTEL MANAGEMENT PTY LTD, NETFLIX INCORPORATED, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED – ASX FXJ, PRESTO ENTERTAINMENT PTY LTD, GROUPM COMMUNICATIONS PTY LTD

CCA sheds 260 jobs to help cut costs by $100m

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 &20 : 9-Dec-14

Australia-listed Coca-Cola Amatil (CCA) has advised that its EBIT for the second half of 2014 will be higher than the first-half result of $A316.7m. The group’s underlying EBIT for calendar 2013 was $A833m. Meanwhile, CCA will retrench 260 employees in the finance, human resources and IT departments in 2015 as it seeks to achieve further cost savings. CEO Alison Watkins notes that sales of its new products are performing well

CORPORATES
COCA-COLA AMATIL LIMITED – ASX CCL, GRAINCORP LIMITED – ASX GNC, CIMB SECURITIES INTERNATIONAL (AUSTRALIA) PTY LTD, CITIGROUP PTY LTD, THE COCA-COLA COMPANY, PEATS RIDGE WATER PTY LTD, BARISTA BROS

Qantas on course for profit of $350m

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Original article by Jamie Freed
The Australian Financial Review – Page: 15 & 20 : 9-Dec-14

Qantas expects its 2014-15 interim underlying net profit to be within the range of $A300m to $A350m, compared with a loss of $A252m previously. Deutsche Bank has responded by upgrading its full-year forecast from $A364m to $A801.5m. Qantas has benefited from factors such as its $A2bn cost-cutting initiative and lower fuel costs. Reducing debt remains the priority, although CEO Alan Joyce says the carrier could potentially resume paying dividends earlier than forecast

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, DEUTSCHE BANK AG, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH

Majors facing $20bn squeeze

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Original article by Michael Bennet
The Australian – Page: 17 : 8-Dec-14

Among the recommendations made in the financial system review report by David Murray for the Australian Government is that the four main banks should significantly increase their reserve capital holdings. They are also urged to lift the risk weighting on home mortgage loans to a range of 25% to 30%. Analysts calculate that if adopted the new requirements will create an additional cost burden of $A20bn per annum for the sector. Australian Bankers’ Association CEO Steven Munchenberg has vowed to persist with its lobbying effort against the proposals and those of the Australian Prudential Regulation Authority

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN BANKERS’ ASSOCIATION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, WATERMARK FUNDS MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED, THE BOSTON CONSULTING GROUP PTY LTD