Iron Ore: Is the price about to roll?

Chris Watling

Chinese steel consumption is the most significant variable in determining the iron ore price. China consumes over half of the world’s iron ore each year. As such, and while supply themes play a role, cycles of Chinese credit growth and housing activity are the key factors in determining iron ore... Show More

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You better run, you better take cover

Brett Gillespie

September 27th, 1983. What comes to mind? What if I include the quote from Bob Hawke? “Any boss who sacks a worker for not turning up today is a bum”. If you are over 45, you will know straight away. It was the day the yacht Australia II won the... Show More

Dividend Imputation Should Change

Gareth Brown

This will be short and likely controversial. There’s a lot of vitriol about dividend imputation these days. Much of it is misguided. However widely practised around the globe, double taxation of corporate earnings is unfair. Most countries acknowledge that fact indirectly by having low tax rates on dividends. Our dividend... Show More

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Highlights from OECD's Australia report

Alex Cowie

While recent headlines have focused on the OECD’s passing comments on housing-debt risks in their recent 47-pager on Australia, the real meat and spuds in this great report is the analysis on, and recommendations for, Australia’s slipping productivity, innovation and inequality. We’ve pulled out some of the highlights and key... Show More

Australia property economics oecd macro risks

Reporting Season Highlights - Imdex, Lovisa, Isentia

Glennon Capital

Last week marked the busiest week of the current reporting season. With most of the smaller companies reporting there was no shortage of stocks to profile. We take a look at three of these businesses, how they have fared during the reporting period and what this means for the businesses... Show More

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Saul Eslake: Ten things to watch in 2017

Angus Coote

This time last year, JCB Advisory Board Economist, Saul Eslake warned of the risks of a Yuan devaluation: “A large devaluation of the Yuan would add renewed impetus to the deflationary pressures that policymakers in advanced economies are hoping will ebb this year.” This proved prescient as markets saw a sharp... Show More

Beware of manipulated utopias

Schroders Australia

As a fan of dystopian classics such as Huxley’s ‘Brave New World’ and Orwell’s ‘1984’, Martin Conlon, Schroders’ Head of Australian equites, finds their insights into the perils of searching for a manipulated utopia alarmingly relevant to today’s financial world. As a rationalist, he suggests the benefits of manipulating asset... Show More

A massive understatement about Australia’s economic outlook

Schroders Australia

Recessions are capitalism’s ways of correcting the imbalances that expanding economies ferment. Australia’s 25-year expansion has allowed two debt-based distortions to fest. These debt blowouts will be paramount in deciding how Australia’s economy performs in coming years. The threat posed by these imbalances, however, is contentious. One way to express... Show More

Australia economy Michael Collins

Oh, inverted world

Schroders Australia

‘Oh, Inverted World’ is the title of the 2001 album of the US indie band The Shins. It's a good description of todays’ topsy turvey world created by loose monetary policy. One big distortion in the anomaly we see in stock pricing tied to business duration. Much-used discounted-cash flow analysis... Show More

Domestic Shares – Keeping the public employed and happy is getting tougher

Schroders Australia

The surprise 'Brexit' vote result towards quarter end served as a stark reminder of increasingly tenuous linkage between the financial economy and the real economy. Politicians and those connected to the financial economy were almost universally in favour of remaining part of the EU. Warnings of the consequences of exiting... Show More

Australia equities shares ASX:CWN Martin Conlon ASX:MYX

Domestic Shares - Buying at high multiples is a dangerous game, even for good companies that grow earnings

Schroders Australia

Bubbles, by definition, exaggerate the span of multiples paid for cashflow streams in equity markets, as in squeezing up the favoured they tend to emaciate the orphans. In early to mid-2000, Computershare was the most favoured poster child for technology stocks listed in Australia. In current terms, its share price... Show More

Australia equities shares ASX:CPU Andrew Fleming

The Risks to Australia's Economic Miracle

James Marlay

The Australian Economy has now delivered 99 consecutive quarters without a recession. Australia is enjoying the longest economic expansion in the developed world — 24 years and counting. However, other commodity led economies are starting to falter. The Wall Street Journal have produced a great resource that looks at the... Show More

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Domestic Shares - price vs value, a dangerous game

Schroders Australia

The interaction between valuation, sentiment as calibrated through price momentum, and policy is key. Differences in the valuation of cyclical stocks relative to defensive industrial stocks has only through the past quarter moved slightly away from hitherto unseen extreme levels. Sentiment, as ever, has followed this move, as measured through... Show More

Australia equities shares ASX:CPU Andrew Fleming

Aussie icons for sale

Intelligent Investor

It will be a shame to lose another iconic brand but you can’t blame Pacific Brands shareholders if they accept HanesBrands takeover offer. Show More

Domestic Shares – Do you have enough inflation protection in your portfolio?

Schroders Australia

We believe expectations of ongoing deflationary conditions (which are spurious in any case, as they depend on the particular prices on which one chooses to focus) are, like the prevailing investment methodologies, anchored in extrapolation rather than logic. Added to bond portfolios which have rarely been larger or more ludicrously... Show More

Australia equities video shares Martin Conlon

Domestic Shares – Resources look better value

Schroders Australia

Last month I interviewed Head of Australian Equities, Martin Conlon, on the current positioning of the Schroder Australian Equity Fund and our views as we look forward. More recently we have seen a turnaround in the market leaders, with the Fund benefiting from Resources and Energy outperforming the interest rate... Show More

Domestic Shares – Banks – volume growth has been the game

Schroders Australia

Australian Banks have enjoyed a generational “stronger for longer” that dwarfs anything the resources market enjoyed before the consequent fall. BHP this year will make the same ebit it made a decade ago; CBA made $5b pre tax a decade ago and will make $13b this year. The driver for... Show More

Domestic Shares – Excess leverage is the financial drug of choice for corporate manic depressives

Schroders Australia

Nothing propels the highs, higher, nor the lows, lower. Consider the oil sensitives - Qantas as a winner and Origin Energy as a loser. Woodside has of course underperformed because it shares a reliance upon the oil price for its economics, but its underperformance has been half of Origin’s. Part... Show More

Australia equities shares ASX:CBA ASX:ORG ASX:QAN Taking Stock Andrew Fleming

Domestic Shares – Intellectually vacuous, but at last some diversity

Schroders Australia

At last, some diversity. The March quarter for the ASX saw a myriad of stocks and sectors lead and lag in performance. A motley lot – South32, Medibank Private, Newcrest, Vicinity, Santos and Transurban – were the best performers, whereas Macquarie, Incitec, the major banks, Computershare, Woolworths and Caltex were... Show More

AUDUSD appears to have found a support level at 0.75

Saxo Capital Markets Australia

After five consecutive days of positive gains, the US dollar index (DX) fell and the AUDUSD appears to have found the support level at 0.75 handle. Saxo’s Sydney-based traders expect the AUDUSD to trade below the resistance level 0.76 handle given the lack of economic data this week, until Friday’s... Show More