Weekend Links, October 3-4, 2015

…more coming…  China Gaming revenue falls 33% on China slowdown, anti-corruption campaign – Nikkei Asian Review Slide in Manufacturing Continued in China Last Month – NY Times Hong Kong public expects property prices to fall in coming year – survey – SCMP Chinese property companies surge on PBOC cut to down payment requirement – SCMP

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ASX at the close

Chris Weston, Chief Market Strategist at IG Markets We’ve been pushing the idea that the market wants clarity before staging a rally of some sort. However, given the extent of all the moving parts, it has become clear it’s not that simple. Having recently heard speeches from key Federal Reserve members Yellen, Lacker, Dudley and


Are Australia’s universities under-funded?

Cross-posted from The Conversation: Since the 1990s, it is said, Australian universities have become ever more under-funded and over-reliant on fee income. Internationally we seem to lag our peers, as governments short-change the sector, our students and society. Some claim that in 2011 Australia’s public spending on universities “ranked thirty-third out of the thirty-four OECD


QLD electricity demand rockets on LNG

By Leith van Onselen The Australia Institute (TAI) has released its brand new Carbon Emissions Index (CEDEX) report, which is the benchmark indicator for Australia’s carbon emissions and provides an up to date snapshot of vital data from the energy sector, along with accurate figures for total renewable energy produced in Australia, including all wind


Just how buggered is Chinese steel and co?

Very. From Macquarie Bank comes a series of charts examining the relationship between debt and cash flow in corporate China which finds: …the percentage of EBIT-uncovered debt went up from 19.9% in 2013 to 23.6% last year, and the percentage of EBITDA-uncovered debt up from 5.3% to 7%. Therefore, there has been a further deterioration


Retail sales track the housing bubble

By Leith van Onselen The Australian Bureau of Statistics (ABS) has released retail sales figures for the month of August, which registered a 0.4% seasonally-adjusted rise in sales over the month with annual sales clocking in at a solid (but slowing) 4.5%: The below chart maps out seasonally-adjusted sales growth by segment on a monthly


“Where have all the Chinese buyers gone?”

By Leith van Onselen Could it be that the Chinese Government’s crackdown on capital flight and corruption, combined with the New Zealand Government’s new rules for property investors, are working to put the clamp on Chinese property investment? Because, as reported in Interest.co.nz today, Chinese buyers appear to have deserted the market: Where have all


Anger over big mortgage deposits

From the ABC: Mining communities on Tasmania’s west coast are disappointed they will be subject to tighter home lending requirements by a major bank. The NAB is demanding a 30 per cent deposit for residents in towns including Queenstown, Rosebery and Strahan. The west coast is facing economic challenges following a downturn in the mining


Australia’s “rampant” foreign labour exploitation

By Leith van Onselen National treasure, Fairfax’s Adele Ferguson, continues to shine a bright light on foreign worker exploitation, which she claims is “rampant” and destroying the economy: If the fallout of the 7-Eleven wage fraud scandal has taught the nation anything it is that the illegal payment of wages to workers on visas is


Bill Evans hedges his RBA hold bets

From Bill Evans: The Reserve Bank board meets next week on October 6. There is little chance that the Board will decide to change rates. Markets are giving a less than 10% probability to a move in October rising to a 25% probability by November and 50% by December. That pricing compares with market pricing,


Robb mulls back door TPP sell-out

By Leith van Onselen The last ditch negotiations for the Trans-Pacific Partnership (TPP) trade agreement, which got underway this week in Atlanta, have hit yet another road block, with negotiators failing to make headway on the sticking points of auto parts, dairy access and drug protections. Australia’s Trade Minister, Andrew Robb, has been quick to


Macro Morning (waiting on Fed)

By Chris Becker Its all about waiting for tonights US unemployment print as this will indicate the direction and magnitude of risk taking for the rest of the month, going into October 28’s Fed meeting. Oh and starting the quarter anew as well! Following the staid Chinese PMIs,  initial jobless claims and the ISM manufacturing PMI


PM Turnbull drives stake through politico-housing complex heart

By Leith van Onselen Change is in the air. With the Abbottalypse gone, and with it the ‘captain’s calls’ not to reform Australia’s giant and inequitable tax concessions, we have received the biggest indication yet that the holy trinity of superannuation concessions, the capital gains tax (CGT) discount, and negative gearing might finally be reformed.


Central banks pile into Australian dollars

The AFR would have you think that the Aussie dollar is on the verge of collapse owing to jittery central banks: And as China liquidates its almost $US4 trillion ($5.7 trillion) stockpile of reserves, the Australian dollar might come under more pressure than previously expected. The IMF’s quarterly update on foreign exchange reserves included a breakdown of China’s “representative portfolio”, which Royal


More again on the next QE

From Deutsche: Our thesis over the last few years has basically been that the global financial system/economic fundamentals are so bad that its good for financial assets given it forces central banks into extraordinary stimulus and for them to continue to buy assets in never before seen volumes. The system failed in 2008/09 and rather


Commodities crash accelerated in September

By Leith van Onselen The RBA has released its commodity price index for September, which registered another 1.0% decline in SDR (currency weighted) terms – the key determinant of the terms-of-trade – but a 2.7% rise in Australian dollar terms on account of the falling currency: Preliminary estimates for September indicate that the index fell


China home sales stall

Cross-posted from Investing in Chinese Stocks Centaline says home sales through September 27 were up a very slight 0.43% in its 54-city survey, while CREIS reports home prices increase 0.28% in its 100-city survey. In the 100-city survey, the price rise was down from a 0.95% rise in August. The largest ten cities saw average