Weekend Links 28-29 November, 2015

Port Phillip Heads China It’s Open Season on China’s Securities Firms as Probes Intensify – Bloomberg ‘Malicious short selling’ used as a weapon to attack metal short sellers – SCMP Mystery of the missing chairman: Guotai Junan case makes Western firms wary of Chinese bosses’ connections – SCMP Banks’ Total Value of Bad Loans Rises

Latest posts


ASX at the close

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets The big drop in Chinese industrial profits plus the weakest CNY mid-point fix since 31 August appear to have set off a wave of selling in equity markets across Asia. The bigger concern is certainly the potential for China to steadily devalue the CNY.


Big iron pauses in great crash

Big iron is taking a breather today in its great decline but it does not look strong. BHP is up a lousy 1.2%, RIO an even more mean 0.5% and still within spitting distance of a post-GFC low. FMG is down 1% and threatening further retracement from its recent bounce: Dalian is down 1% today


2016 is Census Year. But why do we bother?

By Ross Elliott, author of The Pulse: Every five years Australia holds a census of its people and housing and next year it’s our turn again. The five yearly interval was introduced back in 1961 and it has over time become the essential reference point for demographers, economists, researchers, planners, governments and industry. The last


Aussies more educated than ever before

By Leith van Onselen The ABS today released its annual Education and Work survey, which provides information on participation in education, highest educational attainment, transition from education to work and current labour force and demographic characteristics for the civilian population aged 15-74 years. According to the ABS, Aussies are more educated than ever before, with


Population ponzi drives up water costs

By Leith van Onselen Yesterday, the ABS released its annual Water Account for 2013-14, which revealed that average yearly household expenditure on water rose 12 per cent to $584 per household in 2013-14, despite only a 1% increase in water use: “In 2013-14 Australian households spent more than $5 billion dollars on water, paying an


JPM slashes BHP

From Fairfax: JPMorgan is the first of the analysts covered by Bloomberg to capitulate from the optimistic hold and buy ratings since questions about the company’s ability to maintain its progressive dividend policy emerged amid sharp falls in its share price this year, made worse by the tailings dam disaster at its joint venture mine in Brazil. In cutting its rating from


Secret bid to save Holden SA?

From Motoring.com.au: A Belgian automotive entrepreneur with ties to General Motors is behind a secret plan to acquire GM Holden’s Elizabeth assembly plant and continue to build the current generation Commodore beyond the scheduled closure date in late 2017. The plan has been brewing quietly behind the scenes for two years since GM announced it


Another ripping year for dollar-exposed industrials

From UBS: US$ Earners – Reduced But Still Overweight A key portfolio theme for us has been our overweight to stocks that benefit from a weaker Australian dollar. In Australia’s case these are mostly overseas domiciled translation exposures with the US$ the dominant (and our most preferred) exposure. We concede that this is a popular trade among portfolio


Turnbull readies for superannuation reform

By Leith van Onselen With the Abbottalypse’s “captain’s call” not to change superannuation taxes dead and buried, the Turnbull Government is moving forward with superannuation reform, with Treasurer Scott Morrison vowing to wind-back concessions because they are “a cost to government” that is increasing fast. As reported in The AFR today, Treasurer Morrison will use


Spruikers blow gasket in panic bubble defence

By Leith van Onselen As expected, yesterday’s report by LF Economics, “Parental Guidance Not Recommended”, which argued that today’s first home buyers (FHBs) face far greater obstacles to home ownership than previous generations, received a harsh rebuke from Australia’s property commentators. The Daily Telegraph rubbished the report’s claim that the loans underpinning Australian housing values


Weekly RP Data Australian house price update (the big stall)

By Leith van Onselen In the week ended 26 November 2015, the Core Logic-RP Data 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.61% – the sixth consecutive weekly fall (see next chart). Values fell across all major markets except Brisbane: So far in November, home values have


A funny thing happened to capex on the way to BS

The newly minted economic coverage at Business Spectator went through something of a trial yesterday with the awful capex data. Erstwhile but still employed bearish economist Callam Pickering was nowhere to be seen and instead we got this from Victoria Thieberger: Actual new capital spending in the September quarter showed a depressing fall of 9.2 per


Maurice declares war on Western weakness

Old loon ponders don’t die they just join a militia, from The Australian: This stark reality presented most recently in Paris when terrorists killed 130 innocent civilians. Around the Western world, the response was “sensible” and “measured”. There was talk of standing “shoulder to shoulder” with the French people. How we shared their pain. Our


Charting the impact of global peak debt

Here it is from from Macquarie: The only area of further leverage  is in lower income global categories where both leverage is low and correspondingly velocity of money is high. Whilst some of these countries are relatively large (such as India and Indonesia), the group (~80 countries) mostly consists of small countries in Africa, Middle


JPM: Worse ahead for metals

From JPM: …we have constructed a Chinese metals demand indicator based on the average z-scores of year-over-year changes for 25 metals-specific Chinese flow indicators. We have selected the data to represent the broad base metals complex and have included real estate indicators (e.g., residential starts, real estate FAI), construction indicators (e.g., output of crude steel,


China’s surplus property grows

Beijing, we have a problem, from Investing in Chinese stocks: Although first-tier and in demand cities are experiencing drops in inventory, the overall national inventory of new housing has climbed more than 100 million square meters, to more than 686 million square meters. “Data from January to September has shown, the national housing new construction