INVESTMENTS

ATO to test ‘national interest’

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Original article by Angus Grigg, Angela Macdonald-Smith
The Australian Financial Review – Page: 3 : 1-Apr-16

The Australian Taxation Office (ATO) has been given new powers to scrutinise foreign investments for their impact on Australia’s national interest. It seems that the ATO will focus on Chinese state-owned enterprises. The chairman of China’s State Grid Corporation, Liu Zhenya, said at a press conference in Beijing on 30 March 2016 that his company expected to be treated the same way as other bidders for the New South Wales electricity network, Ausgrid.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSGRID PTY LTD, TRANSGRID, STATE GRID CORPORATION OF CHINA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Global funds take aim at media

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Original article by Jake Mitchell
The Australian – Page: 19 & 22 : 1-Apr-16

UBS’s Justin Dwyer says the Australian Government’s proposed changes to cross-media ownership laws may prompt renewed interest in local media companies among their offshore peers and private equity firms. He suggests that companies which made offers to buy the Ten Network in 2015 could be among the potential suitors. Meanwhile, Greg Peirce of UBS says the media industry’s "structural challenges" may have more influence on merger activity in the sector than government reforms.

CORPORATES
UBS HOLDINGS PTY LTD, TEN NETWORK HOLDINGS LIMITED – ASX TEN, PROVIDENCE EQUITY PARTNERS INCORPORATED, DISCOVERY COMMUNICATIONS INCORPORATED, CREDIT SUISSE (AUSTRALIA) LIMITED, DEUTSCHE BANK AG, DICK SMITH HOLDINGS LIMITED – ASX DSH, AUSTRALIA. SENATE STANDING COMMITTEE ON ENVIRONMENT, COMMUNICATIONS, INFORMATION TECHNOLOGY AND THE ARTS, THOMSON REUTERS PLC

Virgin-Air NZ divorce could trigger bid

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Original article by Michael Smith
The Australian Financial Review – Page: 1 & 8 : 31-Mar-16

Air New Zealand has indicated that it may divest its 25.9 per cent stake in Virgin Australia Holdings to provide capital for its own growth strategy. Ailevon Pacific Aviation Consulting’s Oliver Lamb says there has been speculation in the aviation industry as to which of Virgin’s three largest shareholders would sell out first. Virgin shares closed at $A0.34 on 30 March 2016, valuing Air NZ’s stake at about $A310m. Virgin could potentially become a takeover target if Air NZ sells its stake.

CORPORATES
VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, AIR NEW ZEALAND LIMITED – ASX AIZ, AILEVON PACIFIC AVIATION CONSULTING, SINGAPORE AIRLINES LIMITED, ETIHAD AIRWAYS, VIRGIN GROUP LIMITED, QANTAS AIRWAYS LIMITED – ASX QAN, DEUTSCHE BANK AG, ANSETT AUSTRALIA HOLDINGS LIMITED, VIRGIN AMERICA INCORPORATED

Nation’s wealthy line up for slice of Kidman

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Original article by Sue Neales
The Australian – Page: 1 & 2 : 17-Mar-16

A decision on whether the sale of the S Kidman & Company rural property business to foreign buyers can proceed is likely in early April 2016. Three overseas consortiums were shortlisted to buy the Kidman assets, but it has been revealed that a number of potential Australian buyers have since been permitted to undertake due diligence. There have been suggestions that the decision was politically motivated, due to concerns about the sale of large landholdings to foreign interests.

CORPORATES
S KIDMAN AND COMPANY PTY LTD, ERNST AND YOUNG, SHANGHAI PENGXIN GROUP COMPANY LIMITED, GENIUS LINK ASSET MANAGEMENT GROUP, AUSTRALIAN COUNTRY CHOICE PTY LTD, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIA. DEPT OF THE TREASURY, LINFOX PTY LTD, MOON LAKE INVESTMENTS PTY LTD, VAN DIEMEN’S LAND COMPANY, TASFOODS LIMITED – ASX TFL, KATHMANDU HOLDINGS LIMITED – ASX KMD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF AGRICULTURE AND WATER RESOURCES

Penn sticks to $1.3b Asia growth plan

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Original article by David Ramli
The Australian Financial Review – Page: 1 & 10 : 15-Mar-16

Shares in Telstra closed 2.33 per cent higher at $A5.28 on 14 March 2016, after the telco advised that negotiations for a mobile network joint venture in the Philippines have been terminated. Telstra had been prepared to invest about $US1bn ($A1.3bn) in the venture with San Miguel, and CEO Andy Penn says the telco is still interested in making an investment of a similar size in Asia. However, institutional investors says Telstra should carefully consider risk factors in any future investments in the region.

CORPORATES
TELSTRA CORPORATION LIMITED – ASX TLS, SAN MIGUEL CORPORATION, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, NIKKO ASSET MANAGEMENT GROUP, GLOBE TELECOM INCORPORATED, PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, QATAR TELECOM

Vanguard sees lower returns

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Original article by Sally Patten
The Australian Financial Review – Page: 8 : 11-Mar-16

Vanguard Group CEO and chairman Bill McNabb is bearish about the outlook for global investment returns over the next decade. He expects returns to be around two per cent below the long-term average over this period, although he anticipates a subsequent upturn. Meanwhile, McNabb says there should be greater transparency regarding Australian superannuation funds’, while he argues that consolidation in the industry could also be used to put downward pressure on fees.

CORPORATES
THE VANGUARD GROUP INCORPORATED

ACCC on alert as Fortescue, Vale get cosy

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Original article by Matt Chambers, Paul Garvey
The Australian – Page: 19 & 27 : 9-Mar-16

The Australian Competition & Consumer Commission is among the regulators that are likely to scrutinise a proposed deal between Fortescue Metals Group and Vale. The Brazilian group would acquire 5-15 per cent of Fortescue’s shares on-market, while the two groups would establish a blending joint venture to export $US4bn worth of iron ore to China. Christopher LaFemina of Jefferies does not see much advantage for Vale from the deal unless the long-term plan is for it to acquire Fortescue.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, JEFFERIES AND COMPANY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET

Rio Tinto’s Simandou dream evaporates

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 : 15-Feb-16

The Simandou iron ore project in Guinea has a book value of $US10bn on Rio Tinto’s accounts, although it is worth less than this given the current price of the steel input. Rio’s 2015-16 full-year results included a $US2bn writedown on the project, which is likely to cost about $US20bn ($A28bn) to develop. While Rio Tinto is scheduled to release a feasibility study on the project, some analysts do not expect Simandou to proceed for at least a decade.

CORPORATES
RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, CREDIT SUISSE (AUSTRALIA) LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, STANDARD AND POOR’S CORPORATION, VALE SA, WORLD BANK, INTERNATIONAL FINANCE CORPORATION

Goldman upbeat, we won’t get a recession

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 32 : 10-Feb-16

Modelling by investment bank Goldman Sachs suggests that there is a 25 per cent chance that developed economies will experience a recession in the next 12 months. This compares with the historical average of 28 per cent. The risk of Australia experiencing a recession is just 13 per cent, while the long-term average is 23 per cent. Goldman Sachs chief economist Jan Hatzius argues that the recent volatility in global financial markets presents an opportunity for risk-averse investors.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, TAILORED INVESTMENT SOLUTIONS PTY LTD, RESERVE BANK OF AUSTRALIA, MONTGOMERY INVESTMENT MANAGEMENT PTY LTD, WILSON ASSET MANAGEMENT

Pimco forecasts slow year but no recession

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 5-Feb-16

Mihir Worah and Geraldine Sundstrom of Pimco believe that the seven-year bull run is over and volatility will be a characteristic of financial markets in 2016. They also warn that investors can expect a period of lower returns, while the crude oil price is forecast to reach $US50 per barrel by the end of the year. Meanwhile, Pimco forecasts that the global inflation rate will rise to between 1.75 per cent and 2.25 per cent, although it has downplayed the prospect of a recession.

CORPORATES
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, UNITED STATES. FEDERAL RESERVE BOARD