Concerned that the nine-year bull run has overstayed its welcome, many strategists have highlighted the narrow leadership of the US stock market as it has bucked weakening trends elsewhere in the world. Through June, the so-called FAANG stocks had accounted for 75% of the S&P 500’s 2.64% total return, in... Show More

While the market is concerned with the housing cycle and the prospective entry of Amazon, we think that both of these concerns are overblown. In addition, Harvey Norman (HVN) also suffered from allegations of inappropriate accounting practices implying that reported earnings were questionable and became a target for shorting by... Show More

We often read that Abenomics continues to divide people as to whether it is working, and if this policy platform advocated strongly by Prime Minister Abe since his election in 2012 will ever achieve its objective of moving Japan’s economy forward. We believe that Abenomics is working, however we feel... Show More

During the 2016 December quarter, we witnessed the value style stage a partial recovery after having underperformed for at least two years or so. And then in the recent reporting season, the market started to adjust its earnings expectations to reflect the emerging signs of economic growth. Is this as... Show More

China started 2017 with real momentum, following the property driven debt-fuelled stimulus of last year, and the blue skies a result of Government directives to curb pollution during March’s Central Government meetings. However, with an expectation of lower steel intensity sectors driving growth this year, what will this mean for... Show More

The outlook for US construction looks positive, with housing continuing to move back towards mid-cycle levels, and commercial activity potentially increasing as business sentiment improves. There also appears to be a greater degree of certainty around infrastructure investment than there has been for some time. With finance headwinds having long... Show More

As commodity prices have risen, the Australian economy is set to benefit from these continuing gains. Australia’s improving terms of trade has led to a big increase in nominal GDP, which is now growing at 6.1% year-on-year. As commodity prices have moved higher in the first half of 2017, this... Show More

China has had a significant impact on the supply side in two key global commodities during 2016. Going forward, look out for further actions from China on the supply side of commodities. Show More

This year’s reporting season was brutal, with many market darlings confessing to their sins. Some 45% of ASX 200 companies beat their EPS estimates, while 33% missed, the highest since the GFC. The Australian market has seen quite a large rotation away from defensive and bond-sensitive stocks, towards the cyclical... Show More

In this report, William Low, Nikko’s Head of Global Equities, asks three key questions: 1) With global equities almost back to new highs, should we treat this as a sign of optimism, or a cause for concern in 2017; 2) Value investing appears to be back in fashion - How... Show More

LendLease’s net profit rose 12% for the half year ending 31 December 2016, underpinned by earnings growth in all its major operating segments. The development segment was driven by Australia while the construction segment was supported by improved performance in the Americas. The interim distribution announced was AUD 0.33 per... Show More

BlueScope Steel’s first-half earning was marginally ahead of its latest guidance, surging almost 80% compared to the prior corresponding period. The company increased its dividend, a fully franked AUD 0.04 per share, and announced an AUD 150 million share buyback. The company achieved earnings growth across all its operating regions,... Show More

Boral Limited’s half-year result to 31 December 2016 saw profits improve 12% on the back of improved earnings in its US and Asian divisions. Earnings growth was driven by the continued improvements in the US (due to housing) and the USG Boral division, a joint venture (JV) with USG Corp. Show More

Suncorp Group released their half year result to 31 December 2016 which was broadly in line with our expectations. The company delivered top line growth of 4.3% and net profit after tax of AUD537 million, up 1.3% from the prior corresponding period. The company also announced a 10% increase to... Show More

The defensive bull-market that saw the safe companies, and secular growth stocks, rally to unsustainable highs ended in August 2016. This rally appeared to be unprecedented in both magnitude and duration. Multiples of these stocks have compressed significantly since then, as rising interest rates and global growth outlook burst the... Show More

While China is clearly of great importance to the Australian economy, it may be tempting to downplay, or even overlook, the impact that President Trump’s agenda will have on Australia. Show More

Our recent research trip to Las Vegas found that the US gaming market remains in good shape, with gross gaming revenue at casinos growing at around 2-3% pa, which is within our expectations. Show More

Construction is booming in New Zealand, supported by a reasonable economy, strong net migration, tight supply and low interest rates. Show More

Following the US election, we have seen bond rates continuing to increase, a stronger US dollar, firmer commodity prices, and a US stock market at all-time highs. Show More

Brad Potter, Head of Australian Equities at Nikko AM Australia recently visited China, primarily to find out what has been driving recent increases in iron ore and coal prices and whether they can be sustained. It appears that supply side reforms are taking place in the materials sector and there... Show More