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31 Jan 2014 (AFR) – Spending up as confidence improves

(31 Jan 2014, AFR, p22, Clancy Yeates) ‘ANZ Bank says higher business confidence is finally prompting firms to increase their borrowing, a trend it expects to strengthen in 2014 as the ­economic recovery gathers pace. <snipped…> ‘‘We are seeing very good ­improvements in sales growth across pretty much the whole economy,’’ he said. ‘‘The low … Continue reading

31 Jan 2014 (AFR) – MINT versus the Fragile Five

(31 Jan 2014, AFR, p40, Landon Thomas) ‘The long-running boom in emerging markets came to be identified, if not propped up, by wide acceptance of the term BRIC, shorthand for the fast-growing countries Brazil, Russia, India and China.’ ‘Turmoil in these and similar markets has produced a rival expression: the Fragile Five. The new name, … Continue reading

31 Jan 2014 (AFR) – China regions reduce 2014 growth estimates – China manufacturing output slows, orders fall: HSBC

(31 Jan 2014, AFR, p37, Lisa Murray AFR correspondent) ‘China’s provincial governments have lowered their growth targets this year, faced with tougher economic conditions, and under instruction from Beijing to promote more sustainable development. The downgrades came as a new business survey showed manufacturers across the country had their worst performance in January in six … Continue reading

31 Jan 2014 (AFR) – Retail investors warned off BRICs – Why you shouldn’t be tempted by emerging market shares

[COMMENT: Now the basis of this article is very sound; but it highlights the methods of some investors large and small – buying something that is perceived to be cheap in the hope that it’s value will eventually increase. Many of us see that as speculation. We know that once a downward trending price (or … Continue reading

31 Jan 2014 (AFR) – US Fed to emerging markets: our taper, your problem

(31 Jan 2014, AFR, p27, Vesna Poljak) ‘The crisis playing out in emerging ­markets serves as a stark warning to new United States Federal Reserve chairman Janet Yellen that parts of the world will feel the full force of US policy and the process of unwinding stimulus is fraught with unintended consequences.’ ‘South Africa has become … Continue reading

31 Jan 2014 (AFR) – New home sales post first annual rise since 2008

(31 Jan 2014, AFR, p9, Samantha Hutchinson) ‘More activity in the housing market stoked demand at the construction level in 2013 as well as for existing properties, with new-home sales rising for the first time in five years. Sales of new residences jumped 14.4 per cent last year, according to the Housing Industry Association – the … Continue reading

31 Jan 2014 (TheAge,SMH) – Higher confidence filtering through to borrowing, ANZ says

(31 Jan 2014, The Age, BusinessDay, p22, Clancy Yeates) ‘ANZ says higher business confidence is finally prompting companies to increase borrowing, a trend it expects to strengthen as the economic recovery gathers pace. The bank’s head of corporate and commercial banking, Mark Whelan, said demand for credit had increased among small and large business customers, … Continue reading

30 Jan 2014 (AFR) – Greedy traders a problem for banks, financial system

(30 Jan 2014, AFR, p21, Karen Maley) ‘Australian authorities have now joined the long list of red-faced global regulators facing the belated realisation that they drastically under-estimated the risks lurking in the banks’ sprawling trading rooms.’ Read more at AFR.com (might need AFR login access)

30 Jan 2014 (AFR) – Asian buyers spur record Christie’s auction sales

(30 Jan 2014, AFR, p13, Josh Friedman) ‘A boom in purchases of contemporary art and demand from Asia has led to a 16 per cent rise in sales of art and ­collectibles for Christie’s. The auction house sold £4.54 billion ($8.55 billion) of art and collectibles in 2013, a record for the company for the fourth straight year, … Continue reading

30 Jan 2014 (AFR) – Emerging markets at centre of financial storm

(30 Jan 2014, AFR, p11, Ambrose Evans-Pritchard) ‘Turkey, India, Brazil and a string of emerging market countries are being forced to tighten monetary policy to halt capital flight despite crumbling growth, raising the risk of a vicious circle as debt problems mount. Turkey’s central bank on Tuesday night raised its benchmark one-week repo rate to … Continue reading

30 Jan 2014 (AFR) – Restaurants ‘will go to the wall’ during rates row

(30 Jan 2014, AFR, p7, Joanna Mather) ‘The restaurant industry association is bracing for a protracted battle over penalty rates that could remain unresolved until 2016. Hospitality employers want penalty rates wound back, arguing high labour costs are forcing businesses to reduce their hours of opening and stay shut on public holidays. But the Fair … Continue reading

30 Jan 2014 (TheAge, SMH) – Turkey steps in to defend lira with interest rate rise

(30 Jan 2014, The Age, BusinessDay, p24, Ben Woodhead) ‘The Turkish central bank has announced a steep rise in the embattled nation’s overnight lending rate from 7.75 per cent to 12 per cent, as it moves to fend off a potential crisis that has rattled global financial markets in recent days.’ ‘The central bank announced … Continue reading

30 Jan 2014 (TheAge, SMH) – Third profit warning sees Forge effectively put on the market

(30 Jan 2014, The Age, BusinessDay, p21, Max Mason, James Eyers) ‘Mining services provider Forge Group has effectively put itself up for sale after issuing its third profit warning in two months. After blaming a faster than expected slowdown in the mining service ­market on Wednesday, Forge warned it would deliver a loss this year … Continue reading

29 Jan 2014 (TheAge) – Dividends unlikely to compensate for the pain if share prices tumble – Your next move when share prices tumble

[COMMENT: This is a very important consideration for all investors who ignore severe share price movements, and continue to hold their beloved shares with the view that they are holding for the dividend, and that the dividend will compensate for any capital loss as the share price falls. Well, we have some bad news for … Continue reading

29 Jan 2014 (AFR) – China Credit Trust averts disaster with high-yield trust product

[COMMENT: Very interesting article about shadow banking in China.] (29 Jan 2014, AFR, p31, Lisa Murray Shanghai) ‘It was never going to be great timing. Payment for the unfortunately named “Credit Equals Gold” trust product fell due on January 31, the first day of the Lunar New Year. As speculation mounted over the past few … Continue reading

29 Jan 2014 (AFR) – Lenders cut fixed mortgage rates

(29 Jan 2014, AFR, p14, George Liondis) ‘Home-loan lenders are cutting interest rates on new fixed-rate mortgages in a bid to draw in customers amid a growing belief that the next move in official rates by the Reserve Bank of Australia will be up. The Greater Building Society and Citi­bank are the latest to lower … Continue reading

29 Jan 2014 (TheAge, SMH) – Risks in the rout of emerging markets have experts differing – Bad apples emerge as free money heads home

(29 Jan 2014, The Age, BusinessDay, p26, Vesna Poljak) ‘With the supply of easy money being dried by the US Fed’s stimulus tapering, the bad apples among emerging markets are being shown up.’ ‘Emerging markets experts disagree that the rout playing out in some economies right now points to a repeat of the 1997 crisis … Continue reading

29 Jan 2014 (TheAge, SMH) – Business upbeat over sales, trading – conditions improve as lower dollar kicks in

(29 Jan 2014, The Age, BusinessDay, p21, Glenda Kwek) ‘Business conditions have soared to a 2½-year high as sales and profits in some industries rise sharply amid low interest rates, higher share and house prices and a weaker exchange rate. The jump in conditions for December to 4 points from minus 3 in November brought … Continue reading

29 Jan 2014 (TheAge) – ASIC reprimands BNP Paribas over bank bill swap rate misconduct

[COMMENT: It seems as though the finance industry professionals are not 100 percent squeaky clean – so we need to take a little care.] (29 Jan 2014, The Age, BusinessDay, p20, Georgia Wilkins) ‘BNP Paribas has been forced to put $1 million towards financial literacy projects and review operations after staff tried to rig the … Continue reading

29 Jan 2014 (TheAge) – JB Hi-Fi defies trend to boost profit – shares jump after solid result

(29 Jan 2014, The Age, BusinessDay, p19, Sue Mitchell) ‘JB Hi-Fi shares posted their biggest gains for almost a year, rising 11 per cent after the consumer electronics retailer maintained its full year sales guidance and confirmed that December-half net profit was expected to rise 10 per cent.’ ‘JB Hi-Fi chief executive Terry Smart released … Continue reading

28 Jan 2014 (AFR) – Commercial, residential jobs pick up

(28 Jan 2014, AFR, p33, Michael Bleby) ‘Employment and remuneration levels in property and construction are on the rise. Online recruitment site SEEK reported an 11 per cent rise in the packages offered to valuers in 2013. Recruitment firm Hays had a 40 per cent improvement in its property business last year.’ Read more at AFR.com (might … Continue reading

28 Jan 2014 (AFR) – Tough years over for Gold Coast property – bargain hunters hit the Gold Coast

(28 Jan 2014, AFR, p3, Rebecca Thistleton) ‘Waterfront apartments on Queensland’s Gold Coast sold for as low as $178,000 at auction on Monday and, while this level was described as “conservative”, it was seen as signalling a slow rise from bottom prices after “a tough few years” for vendors. More than 100 residential properties were put … Continue reading

28 Jan 2014 (AFR) – Holiday costs forcing businesses to close their doors

(28 Jan 2014, AFR, p6, Marianna Papadakis) ‘More businesses are reportedly shutting on public holidays, including this past Australia Day long weekend, because of the high cost of penalty rates, leaving tourists with a bad impression of Australia. Restaurant and Catering Association chief executive John Hart said more than half of businesses in NSW, Victoria, … Continue reading

28 Jan 2014 (The Age, Bloomberg) – Slowdown in China and Fed tapering fuel volatility in emerging economies

(28 Jan 2014, The Age, BusinessDay, p22, Nikolaj Gammeltoft and Callie Bost and Bloomberg, Washington Post) Emerging-Market VIX Surges Most in Two Years on Selloff: Options ‘Equity volatility from India to Brazil and Turkey jumped the most in two years as turmoil spread across global markets after a selloff in emerging-market currencies and growing concern … Continue reading

28 Jan 2014 (TheAustn) – Japan logs record annual trade deficit

(28 Jan 2014, The Australian, p19, MITSURU OBE, The Wall Street Journal) ‘JAPAN has logged a record trade deficit for all of 2013, the third straight year of red ink, as Prime Minister Shinzo Abe’s efforts to lift exports and reverse a longstanding trend toward greater overseas production have so far failed to make much … Continue reading

28 Jan 2014 (The Austn) – Markets brace for rough ride as Fed taper move looms

(28 Jan 2014, The Australian, p15, Adam Creighton) ‘LOCAL markets face a rocky week ahead of the Reserve Bank board’s first meeting of the year, as developing nations brace for further capital flight amid concerns about the Japanese economy. ‘ Read more at TheAustralian.com.au

27 Jan 2014 (TheAge, SMH) – Russian courier rules herald difficult times for package delivery

[COMMENT: A very interesting article about the difficulties delivering online purchases in some countries…] (27 Jan 2014, The Age, BusinessDay, p23, Andrew Kramer) ‘Russia has never been an easy country in which to deliver packages because of its vast size. The government just made it a lot harder for anyone buying things online. Russian customs … Continue reading

25 Jan 2014 (AFR) – Corporate cash stash at record high

(25 Jan 2014, AFR, p41, Philip Baker) ‘ “Money makes the world go around’’, the line from the Cabaret goes. If it’s true then maybe that’s the reason why the global economy isn’t powering along at full pace right now. Everyone seems to be sitting on whatever cash they have rather than spending it and seeing … Continue reading

25 Jan 2014 (AFR) – A-REITS produce steady income but returns are down

(25 Jan 2014, AFR, p39, Larry Schlesinger) ‘Australian Real Estate Investment Trusts have delivered steady, reliable and, in some cases, growing ­distributions for mum-and-dad ­investors in the first half of 2014. The Australian Financial Review analysis of the interim distribution statements of the 18 stocks that make up the S&P/ASX 200 A-REIT index revealed that … Continue reading

25 Jan 2014 (AFR) – Investors reject Reject Shop after sales drop – Reject Shop reconsiders mall stores after share plunge

(25 Jan 2014, AFR, p36, Max Mason and James Thomson) ‘Shares in The Reject Shop plunged more than 30 per cent after the ­company blamed a poor pre-Christmas trading period and heavier than expected discounting for flat sales in the first half.’ <snipped…> ‘Gross margins were also well below the company’s expectations due to higher-than-expected discounting … Continue reading