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28 Feb 2014 (AFR) – Sharp spending drop stirs fears of ‘investment cliff’

(28 Feb 2014, AFR, p3, Jacob Greber Economics correspondent) ‘A nationwide business spending strike is hurtling the economy towards the sharpest investment retraction since the early 1990s recession.’ ‘Though the rapid pullback has been anticipated, official figures released on Thursday by the Australian Bureau of Statistics suggest it may be stronger than first thought – triggering … Continue reading

27 Feb 2014 (AFR) – Sydney subletting space dips as tenants move back

(27 Feb 2014, AFR, p40, Mercedes Ruehl) ‘Sublease space in Sydney’s CBD has dropped below the historic average for the first time in more than a decade.’ ‘New subleasing deals are not the key reason for the small decrease, which is actually due, in large part, to space being given back to landlords directly in … Continue reading

26 Feb 2014 (AFR) – How animal spirits drive the market

[COMMENT: Very interesting article about the emotions and psychology of investing in the financial markets. It explains that the source of instability in risky behaviour is somewhat dependant on underlying physiology, and hormones, amongst other things.] (26 Feb 2014, AFR, p38, Jill Margo Health editor) ‘When John Maynard Keynes famously said that “animal spirits” drive … Continue reading

26 Feb 2014 (AFR) – Heat coming off home price growth, latest figures show

(26 Feb 2014, AFR, p3, Rebecca Thistleton) ‘The price momentum which propelled home values in 2013 has shown signs of flat-lining. The daily and weekly housing indexes from RP Data-Rismark have weakened after climbing consistently last year. This could mean capital growth has run out of steam, or a recent drop in consumer sentiment due … Continue reading

26 Feb 2014 (TheAge, SMH) – Iron ore price plunges below $120 on Chinese lending fears

(26 Feb 2014, The Age, BusinessDay, p39, Max Mason) ‘The price of iron ore has fallen below the level of $US120 a tonne for the first time since July last year, raising fears the bulk commodity could fall further. Overnight on Monday, the spot price of iron ore slipped another 2 per cent to $US119.90 … Continue reading

24 Feb 2014 (AFR) – Dairy farms can’t get buyers like processors can

(24 Feb 2014, AFR, p40, Matthew Cranston) ‘At least $300 million worth of dairy farms across Australia have failed to sell or bring in capital partners after more than a year on the market, despite appetite for dairy processing assets. The Chinese Investment Corporation, which had regularly been cited as a potential capital partner for Australia’s … Continue reading

24 Feb 2014 (AFR) – Auction clearances hit record

(24 Feb 2014, AFR, p5, Michael Bleby) ‘Clearance rates rose to record highs over the weekend and the number of auctions in capital cities increased by more than 70 per cent to 2847 from a week earlier. The national clearance figure of 82 per cent was driven by a record 85.2 per cent in Sydney and a rate … Continue reading

22 Feb 2014 (AFR) – No privacy for users who hand over free information: Google

[COMMENT: This news article is nothing to do with the economy, or business, or finances; but it is very worthy of recording it for future reference. All web surfers take note!! Use the link below to view YOUR own interests based on Google’s snooping and spying of your activities.] (22 Feb 2014, AFR, p4, James … Continue reading

22 Feb 2014 (AFR) – All signs point to recovering earnings

(22 Feb 2014, AFR, p34, David Bassanese) ‘When it comes to the latest round of corporate earnings reports, no news is good news as far as investors are concerned. And if the “no news” continues, investors might be surprised to know this bodes quite well for the local equity market. How so? It’s because…’ Read more … Continue reading

22 Feb 2014 (AFR) – Abenomics’ J-curve puzzle

(22 Feb 2014, AFR, p13, Andy Sharp) ‘Japan’s record trade deficit adds to sinking consumer confidence and an April sales tax increase, ­threatening to undermine Prime ­Minister Shinzo Abe’s bid to engineer a sustained recovery. Credit Suisse this week lowered its 2014 economic growth forecast for Japan to 1.6 per cent from 2.2 per cent after the … Continue reading

21 Feb 2014 (AFR) – China manufacturing activity slows further – factory output 7-month low

(21 Feb 2014, AFR, p29, Lisa Murray AFR correspondent) ‘China’s economy is off to a rocky start in 2014 as a new business ­survey showed conditions across the manufacturing sector were at their worst in seven months. The news triggered a sharp fall in regional sharemarkets and the Australian dollar amid fears the world’s second-biggest … Continue reading

21 Feb 2014 (AFR) – Ripples from mining slowdown spread beyond resources

(21 Feb 2014, AFR, p23, James Thomson) ‘The end of the mining boom is casting a long shadow over the interim profit reporting season – but it’s not just miners and mining services firms that are feeling the pain. On Thursday morning, retailer Super Retail Group revealed that the resources slowdown has buffeted its BCF … Continue reading

21 Feb 2014 (AFR) – Earnings trigger profit upgrades

(21 Feb 2014, AFR, p1, Sally Rose, Bianca Hartge-Hazelman, Vesna Poljak and Simon Evans) ‘Deep cost-cutting, low bad debts and embryonic signs that construction is rebounding have triggered modest profit upgrades for the sharemarket. At the start of profit reporting season several weeks ago, analysts expected earnings to grow about 13 per cent this financial year. After … Continue reading

20 Feb 2014 (AFR) – Solid earnings and bigger dividends lift ASX

(20 Feb 2014, AFR, p20, Sally Rose) ‘A slew of strong half-year company results and the news that some of Australia’s largest companies have raised their dividends drove shares higher, despite disappointing domestic wages growth data and lingering concerns about China. The benchmark S&P/ASX 200 Index rose 15.4 points, or 0.3 per cent on Wednesday to … Continue reading

20 Feb 2014 (AFR) – Sensis says plan to cut 800 workers ‘not about greed’

(20 Feb 2014, AFR, p25, David Ramli and Paul Smith) ‘Sensis managing director John Allan has defended the company’s decision to outsource 800 local jobs across Australia as being vital for the company’s survival and refused to rule out further losses.’ Read more at AFR.com (might need AFR login access)

19 Feb 2014 (AFR) – Car markers’ exit hits Ansell – Manufacturing decline hits Ansell

(19 Feb 2014, AFR, p29, Max Mason) ‘The fit, it seems, isn’t right for Ansell investors, who were less than impressed with the glove maker’s weak organic revenue growth of just 1 per cent in the first half. Ansell chief executive Magnus ­Nicolin said the trickle-down effect of car manufacturers Holden, Ford and Toyota preparing to … Continue reading

19 Feb 2014 (TheAge) – Earnings season’s mildly good start includes a few surprises – OK start to earnings season

(19 Feb 2014, The Age, BusinessDay, p35, Max Mason) ‘Keenly awaited profit results are trickling in with early evidence suggesting businesses have seen the bottom of the earnings cycle, but it hasn’t been all rosy for Australian companies. Earnings season is off to a relatively positive start, after about 30 per cent of companies have … Continue reading

19 Feb 2014 (TheAge) – Alcoa closure to weigh on Victorian economy

(19 Feb 2014, The Age, BusinessDay, p25, Brian Robins) ‘Victoria has been hit with another heavy round of job losses, with Alcoa on Tuesday pulling the plug on the ageing Point Henry aluminium smelter and associated rolling works at Geelong. Another rolling mill and recycling unit at Yennora, in Sydney, will close. In total, 980 … Continue reading

19 Feb 2014 (TheAge, SMH) – Geelong optimistic about jobs despite factory closures

(19 Feb 2014, The Age, p4, Clay Lucas) ‘It is an exodus on a scale not seen before in Victoria’s second city: Ford, Qantas, Alcoa and perhaps Shell will all soon be gone. Ford’s pull-out will see 510 manufacturing jobs go in late 2016 (although hundreds of design jobs with Ford will stay). About 300 … Continue reading

18 Feb 2014 (AFR, NYTimes) – Japan’s Growth Slows, Raising Concerns About Obstacles That Lie Ahead

(18 Feb 2014, AFR, p13, Hiroko Tabuchi, and New York Times) ‘TOKYO — The Japanese economy grew at a tepid rate of 1.0 percent in the final quarter of 2013, falling short of analyst expectations and heightening concerns that Japan’s recovery may not be strong enough to weather further challenges expected this year. Forty-one economists … Continue reading

18 Feb 2014 (TheAge, SMH) – Fears of looming China credit crunch spark new gold rush

(18 Feb 2014, The Age, BusinessDay, p28, Andrew Critchlow) ‘China’s “unfolding credit crunch” is having an unforeseen and dramatic impact on gold prices as investors urgently stock up on the precious metal as a form of financial protection against a sharp correction in the world’s second-largest economy. This is the main reason why gold prices … Continue reading

18 Feb 2014 (TheAge, SMH) – Record coal exports to China boost Aurizon’s forecast

(18 Feb 2014, The Age, BusinessDay, p23, Jenny Wiggins, and SMH) ‘Aurizon chief executive Lance Hockridge signalled cost cutting by mining customers was paying off as the rail operator hauled record amounts of coal in the first half of the year and raised 2014 forecasts. The weakening Australian dollar and extensive cost cutting by key … Continue reading

17 Feb 2014 (TheAge, SMH) – Charterhill collapse a salutory lesson for investors and SMSF trustees

(17 Feb 2014, The Age, BusinessDay, p28, Max Newnham, and SMH) ‘The recent collapse of the Charterhill group, an accountancy firm that specialised in property investment through self-managed super funds, should provide some valuable lessons for investors and SMSF trustees. As a result of the collapse, approximately 160 investors and SMSFs stand to lose $7million.’ … Continue reading

17 Feb 2014 (TheAge, SMH) – Volumes surge as (property) buyers hit market – Two Super Saturday auction days on the way

(17 Feb 2014, The Age, BusinessDay, p28, Nicole Lindsay, and SMH) ‘The property market has cranked into gear early with two Super Saturdays looming before the Labour Day long weekend. Next weekend the REIV is expecting about 1320 auctions and a similar volume is scheduled for March 1. RP Data spokesman Robert Larocca said…’ Read … Continue reading

17 Feb 2014 (TheAge, SMH) – Wattly / Valspar paints a brighter picture in its outlook for 2014

(17 Feb 2014, The Age, BusinessDay, p26, Eli Greenblat) ‘Global paints giant Valspar, owner of Wattyl, the No.2 paint brand in Australia, has turned bullish on the local paint market after a sluggish 2013 as armies of weekend do-it-yourself shoppers excited by reality TV shows flood hardware stores armed with colour swatches and renovation dreams. … Continue reading

15 Feb 2014 (AFR) – Acquisitions, integration and the fall of Forge Group

(15 Feb 2014, AFR, p35, Joyce Moullakis and Brian Robins) ‘The collapse of Forge Group this week entangled a host of Australia’s biggest names, who were left wondering how the mining services and contracting company’s numbers were so wrong. Lender ANZ Banking Group, billionaire Gina Rinehart, insurer QBE and big name money manager BlackRock were among … Continue reading

15 Feb 2014 (AFR) – Chinese factories face weak demand

(15 Feb 2014, AFR, p12, Angus Grigg AFR correspondent) ‘China’s factory gate prices tumbled for a 23rd straight month in January, prompting calls for the government to lower its economic growth target for this year to a more realistic 7 per cent in order to bolster the case for speedier structural reforms. Producer prices declined 1.6 per … Continue reading

15 Feb 2014 (AFR) – Dividend outpouring reaches $53bn

(15 Feb 2014, AFR, p1, Vesna Poljak) ‘Australia’s biggest companies are answering the call from investors for cash by filling their pockets with $53.7 billion in dividends. Despite mixed signals from the economy and almost universal caution from the executives who have released profit results, dividends have risen 6.1 per cent to $53.7 billion over the past … Continue reading

14 Feb 2014 (AFR) – Rising jobless the ‘Achilles heel’ of economic recovery

(14 Feb 2014, AFR, p22, Glenda Kwek) ‘The weaker than expected jobs market has raised questions about whether the Reserve Bank of Australia has injected enough stimulus into the economy to support growth in non-mining sectors. The immediate reaction from investors was clear – the Australian dollar fell by 1¢ to US89.31¢, while yields on … Continue reading

14 Feb 2014 (AFR) – Forge Group shareholders threaten legal action

[COMMENT: This situation is a good warning to all those investors who continue to have faith in a company when there are signals that the market has lost faith. A faltering and falling share price is one just warning. We don’t lend our hard-earned money to companies so they can make it disappear – we … Continue reading