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ASX at the close

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets China leads on stimulus hope Apart from the ASX 200, Asia has got off to a positive start to the week, with China leading the region. Comments by PBOC Governor Zhou from the weekend have set the tone for Chinese equities with stimulus expectations

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CS: Santos is buggered

From The Australian: Oil and gas company Santos “simply must raise capital” in the face of slumping oil prices or it risks failing to break even on a cash-flow basis, says investment bank Credit Suisse. Credit Suisse, in a research note today, said Santos needed an oil price of at least $US83 a barrel to have

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Deposits levy a sound idea

By Leith van Onselen As revealed over the weekend, Treasurer Joe Hockey has suggested the Government will implement Labor’s planned deposits levy of five basis as part of the May Budget, which could raise up to $500 million a year. From The AFR: The bank tax, as proposed by Labor ahead of the 2013 election,

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Japan to control Australian LNG?

As Australia flirts with disaster in the Pilbara with growing Chinese ownership, the AFR reports of similar dynamics ahead for LNG and Japan: Ms Sekiguchi, KPMG’s Tokyo-based head of energy and natural resources in Asia Pacific, said Asian utilities, trading houses and national oil companies, particularly from Japan, were enthusiastic about using their minority positions

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Iron ore equity takes a bath

Big iron ore taking it in the team today with both RIO and BHP down 2% and FMG down 3.5%. To the index:   The equity index is falling but not as fast the iron ore price so the idiocy spreads keep on widening:   Damn its going to hurt when they close!  The dead

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Hockey repeats negative gearing rents myth

By Leith van Onselen Treasurer Joe Hockey has once again all but repeated the tired myth that the temporary abolition of negative gearing between 1985 and 1987 drove-up rents. From The AFR: Mr Hockey said negative gearing on housing was “part of the conversation” but played down one argument against the popular tax concession, saying

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Goldman sees April rate cut

From Tim Toohey and Andrew Boak: Economic momentum disappoints into late 2014… Economic momentum continues to struggle against the headwinds from ongoing terms of trade decline, weak income growth, fiscal consolidation, and declining business investment. The 4Q2014 National Accounts were a testament to this tension as domestic demand growth slowed to +0.4% (6- mth annl.) and nominal income decelerated

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Capital Group still buying Fortescue

From The Australian: US fund management giant The Capital Group has taken advantage of this month’s slide in the share price of Fortescue Metals Group to add to its stake in Australia’s third-biggest iron ore miner. Capital increased its stake in Fortescue to 7.08 per cent from 6.05 per cent previously, buying nearly 32 million

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Dad’s Army: “Impossible” for house prices to fall

From Dad’s Army’s Gotti today: …it is almost impossible for dwellings to go down significantly while the existing [policy] chain remains in place. To negative gearing and capital gains concessions are added…Australia’s population is rising but in most centres, the supply of housing land and building approvals restricts the amount of new dwellings available…Secondly, the

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IMF humiliates Aussie macroprudential

By Leith van Onselen The…ahem…shortsightedness of Glenn Stevens’ comments last year that macro-prudential controls on high risk mortgage lending were “dreaded” and the “latest fad” has, once again, been exposed with a new working paper from the International Monetary Fund (IMF) which evaluates evidence from 119 countries over the 2000-13 period and finds that macro-prudential policies

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Aussie weakens after bonfire of the shorts

Not much need to do a long Aussie piece today but I’ll note quickly that last week’s Commitment of Trader’s report showed shorts still being squeezed in the currency:   Short positioning is now way back to Oct 2014 levels, offering plenty of room to shift the market down. The Battler was hit hard Friday

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Gittins re-writes mining boom history

By Leith van Onselen Fairfax’s Ross Gittins has written a spirited post today chastising economists for not questioning the wisdom of the once-in-a-century mining boom, which drove-up the exchange rate and has now guttered other trade-exposed industries: Now we’re in the final throes of the decade-long mining resources boom, it’s a good time to reflect

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Will Fortescue destroy big iron?

Among the piles of media surrounding Fortescue Metals Group today one stands out. The AFR’s junket queen, Jenifer Hewitt, has delivered a worthwhile insight from her FMG sponsored trip to the Boao Forum on the weekend: Andrew Forrest was one of the few world business leaders to have meetings with China’s Xi Jinping at the Boao

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Daily LNG price update (retracement)

The Brent oil price gave up much of the Yemen gains on Friday down 5% to $56.19. The war is not pretty but will not be regional and the US ‘s Camp Lemonnier is nicely positioned on the Mandab Strait should it become maritime. It’s a minor issue for the oil market. Bigger is the Iran deal and

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Chinese developers build into bust

From the FT: Most listed mainland homebuilders recorded a steady rise in revenue last year, but sharp declines in profit for many are a symptom of aggressive price-cutting designed to shift stock and generate much-needed cash in the debt-laden sector. …“With the downward pressure on the economy, the real estate industry will continue to undergo

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This time it’s different for Chinese stocks!

From Bocom International Holdings Co. via FTAlphaville on the ye auld Chinese share surge: Currently, the yield gap shown in our chart [ showing earnings yield minus bond yield in China versus the Shanghai Comp] is plunging nearing its historical extreme. If bond yield can continue to fall to the 3% range due to slowdown and

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Choked land supply forces buyers to camp-out

By Leith van Onselen In his maiden Parliamentary speech, Family First senator, Bob Day (a former home builder), made the following comments in relation to Australia’s constipated land supply system [my emphasis]: The single most important factor affecting housing affordability has been land. In no other area of the economy has the interference of government