SUPPLY AND DEMAND

Australia raises $7.6b in first 30-year bond

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Original article by Vesna Poljak
The Australian Financial Review – Page: 20 : 13-Oct-16

The inaugural issuance of 30-year Australian government bonds attracted more than $A13bn worth of bids from prospective investors. The offer was capped at $A7.6bn, and the yield on the long-dated bonds will be 3.27 per cent. This is significantly higher than equivalent bonds in the US, the UK and Japan, while financial market watchers had anticipated a yield of between 3.21 per cent and 3.28 per cent. Demand for the 30-year bonds and the limited supply is likely to result in strong activity in the aftermarket.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, QIC LIMITED, JP MORGAN AUSTRALIA LIMITED, BANK OF JAPAN, EUROPEAN CENTRAL BANK

Investors embrace maiden 30-year government bond

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 8 : 12-Oct-16

There has been strong demand among international investors for the inaugural issuance of 30-year Australian government bonds. The bonds will mature in March 2047 and investors will receive a rate of 3.25 per cent. The yield on 10-year bonds is currently around 2.25 per cent. The volume and pricing of the 30-year bonds will be determined on 12 October 2016, but the issuance is believed to have attracted around $A7.5bn worth of bids from prospective investors.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, JAMIESONCOOTEBONDS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA

Surging coal puts pricing system in peril

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Original article by Matt Chambers
The Australian – Page: 17 & 18 : 10-Oct-16

The spot price of Australian coking coal has risen by 155 since early June 2016, to $US213 per tonne. This compares with a contract price of just $US92.50 per tonne for the September quarter. The spike in the spot price has prompted Japanese steel mills to delay the settlement of contract prices for the December quarter. Macquarie notes that there is a growing push to phase out the quarterly contract system in favour of index pricing, although Whitehaven Coal Paul Flynn says this is unlikely to occur in the near-term.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, WHITEHAVEN COAL LIMITED – ASX WHC, NIPPON STEEL AND SUMITOMO METAL CORPORATION, ANGLO AMERICAN PLC, THE STEEL INDEX LIMITED

International student numbers soaring again

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Original article by John Ross
The Australian – Page: 21 : 22-Sep-16

International students are again showing strong interest in Australian education, with enrolments rising 11 per cent in the first seven months of 2016. Vocational education and English language courses are particularly popular. Federal Education Minister Simon Birmingham expects even stronger growth to be stimulated by the National Strategy for International Education.

CORPORATES
AUSTRALIA. DEPT OF EDUCATION AND TRAINING, VOCATION LIMITED – ASX VET, AUSTRALIAN CAREERS NETWORK LIMITED – ASX ACO, ASHLEY SERVICES GROUP LIMITED – ASX ASH, UNIVERSITY OF NEW SOUTH WALES, INTERNATIONAL EDUCATION ASSOCIATION OF AUSTRALIA

Resource stocks in vogue again on back of China hopes

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Original article by Jessica Sier
The Australian Financial Review – Page: 16 : 19-Sep-16

The uncertain outlook for the Chinese economy weighed on both commodity prices and resources stocks earlier in 2016. However, Australia’s resources sector is back in favour with investors, amid growing optimism about the Chinese economy. Whitehaven Coal has gained 250 per cent in the year to date, while pure-play iron ore producer Fortescue Metals Group has risen by 164 per cent.

CORPORATES
WHITEHAVEN COAL LIMITED – ASX WHC, FORTESCUE METALS GROUP LIMITED – ASX FMG, SYRAH RESOURCES LIMITED – ASX SYR, OROCOBRE LIMITED – ASX ORE, GALAXY RESOURCES LIMITED – ASX GXY, CREDIT SUISSE (AUSTRALIA) LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD, REGAL FUNDS MANAGEMENT PTY LTD, BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32

Tighter supply means iron ore won’t fall to $US30: investors

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Original article by Peter Ker
The Australian Financial Review – Page: 21 : 15-Sep-16

Colonial First State Global Asset Management’s Todd Warren notes that a number of factors have contributed to lower-than-expected iron ore supply in 2016. However, he says the most bearish forecasts for the iron ore price are unlikely to be realised. The price of the steel input has retreated in recent weeks, although it has remained above $US50 per tonne for most of the last six months. Citigroup forecasts that the iron ore price will average $US45/tonne in 2017.

CORPORATES
COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, CITIGROUP PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, CLIFFS NATURAL RESOURCES INCORPORATED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, SAMARCO MINERACAO SA

Ore fears as China steel hits its peak

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Original article by Rowan Callick
The Australian – Page: 17 & 18 : 12-Sep-16

China Metallurgical Industry Planning & Research Institute president Li Xinchuang expects the iron ore price to remain within a range of $US50 to $US60 per tonne for some time. He also says steel production in China peaked in 2014, when output totalled 823 million tonnes. Steel production fell to 804 million tonnes in 2015. Meanwhile, China’s steel exports have risen in recent years while domestic consumption has declined, while Li has criticised the Australian Government’s recent stance on Chinese investment.

CORPORATES
CHINA METALLURGICAL INDUSTRY PLANNING AND RESEARCH INSTITUTE, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA

Dakota chief tips Tesla’s end within 10 years

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Original article by Tess Ingram
The Australian Financial Review – Page: 19 : 8-Sep-16

Dakota Minerals has bought a tenement package in Portugal in anticipation of a rise in demand for lithium in Europe. David Frances, the CEO of the Australian-listed lithium explorer, expects strong demand for lithium from European manufacturers of electric cars. In contrast, Frances is sceptical about the popularity of electric cars in the US, where buyers are likely to show limited interest in such cars.

CORPORATES
DAKOTA MINERALS LIMITED – ASX DKO, TESLA MOTORS INCORPORATED, MERCEDES-BENZ AG, VOLKSWAGEN AG, BENCHMARK MINERAL INTELLIGENCE

APLNG to sell gas on local market

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Original article by Matt Chambers
The Australian – Page: 24 : 7-Sep-16

Surplus gas from the Origin Energy and ConocoPhillips-led Australia Pacific LNG project will be made available to domestic users rather than exported. APA Group will operate a 50km pipeline on behalf of APLNG that will be used to supply the eastern states with coal-seam gas that is surplus to export requirements. The Shell-owned Queensland Curtis LNG project also supplies surplus gas to the domestic market, as prices are higher than in the spot market.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, CONOCO (UK) LIMITED, AUSTRALIA PACIFIC LNG LIMITED, APA GROUP – ASX APA, ROYAL DUTCH SHELL PLC, QUEENSLAND CURTIS LNG PTY LTD, SANTOS LIMITED – ASX STO, GLADSTONE LNG PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Demand rally seen as strong enough to withstand US rate rise

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Original article by Jessica Sier
The Australian Financial Review – Page: 27 : 7-Sep-16

Cadence Capital’s Karl Siegling argues that a rise in US interest rates is likely to have only a short-term impact on the recent rebound in commodity prices. James Gerrish of Shaw & Partners notes that while the gold price is likely to be the most affected by a rate rise, the iron ore price is primarily influenced by supply and demand considerations. Siegling adds that base metal producers will be the hardest hit by a rise in US interest rates.

CORPORATES
CADENCE CAPITAL LIMITED – ASX CDT, SHAW AND PARTNERS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, MACQUARIE WEALTH MANAGEMENT, INDEPENDENCE GROUP NL – ASX IGO