Q Continuum

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A tale of two construction sectors

After my bit on ABC’s “The Business” last week (linked on the MacroTV sidebar) I decided to give a run-down on forces influencing construction.  In a nutshell, the Australian construction sector is a tale of two economies – Mining and The Rest. Mining and Infrastructure As the RBA, Treasury, the federal government and every other financial commentator has

32

How to fix executive pay

Since the GFC, there has been a renewed focus on executive remuneration for publically listed companies.  In particular the size and structure of bonus schemes came to the fore after ludicrous payments were made to US banks executives, despite their companies being bailed out by taxpayer funds.  Australia was not immune to this disease, with

25

The mining boom is big

I was doing a little ABARE report reading recently and came across these two images which show just how big the Australian mining boom is and how much pace it is gathering. The first is a graphical showing the major development projects in Australia as of October 2010 (full report here). The second image is

11

Origin floating rate notes

In today’s Bonds Spotlight we take a look at the recently-released Origin floating rate notes.  The $900million in debt was raised primarily to fund Origins contribution to the Australia Pacific LNG project. The Key Details Security type Floating rate note Coupon rate: 90 day BBSW + 4.0% Face value: $100 Payment schedule: Quarterly, in arrears

15

Billabong rides a wave down

In this week’s spotlight, we take a look at the very well-known Australian surf wear company Billabong (Billabong Group, BBG).  Gnarly. The Business Billabong (BBG) started out as a humble board shorts maker, with founder Gordon Merchant designing and stitching his wares in a Gold Coast kitchen in 1973.  From those humble beginnings Billabong has

29

Another retail marriage?

As the summer of discontent continues for our retailers, so too the woes for JB Hi Fi’s (JBH) share price.  Whilst the recent drop has created a lot of unsightly red in share portfolios (yours truly included), big price shifts can also create big opportunities.  Given the depressed price of JBH, it’s time to consider

6

Macquarie takes Note

In today’s bond’s spotlight, we follow up our recent “Mysterious Millionaires Factory” article on Macquarie Group (MQG) to take a look at their floating rate note.  The note started life as a Macquarie Bank Limited (MBL) security, hence it’s ASX code.  MBL was subsequently incorporated into Macquarie Group.  As such, I will refer to MQG

4

Cochlear – brazing for a comeback

Cochlear released the following update on the recent recall of its core product, the Nucleus 5 implant, yesterday: The results of our investigation to date point to a loss of hermeticity from unexpected variations in the brazing process during manufacturing. Brazing is the process that joins the feedthrough to the titanium chassis. Variations in the

11

The mysterious millionaires factory

It’s been raining Macquaire (MQG) blogs at MB this week and last, so I’m going to add my two cents worth in this week’s equities spotlight article.  Next week, I’ll be followng up with a Bonds Spotlight article on the Macquarie Note MBLHB. The Business Macquarie is a global financial services company with over 15,000 employers, just

39

Revenge of the super profits tax

Peter Martin has a bit of a scoop this morning from a Canberra tax conference where apparently it has been revealed that: A WORKING group set up by the Treasurer, Wayne Swan, is planning a shake-up that would see most companies pay no corporate tax and a smaller number pay a much higher rate of

13

Bonds Spotlight: AFIC Convertible Note

In our first Bonds Spotlight article, we take a look at the $200 million in convertible notes to be issued by Australian Foundation Investment Company (AFIC, ASX code AFI), announced on 14 November 2011.  Given The Prince’s excellent (but sobering) assessment of Australian superannuation share performances, AFICs fixed-income offering should genetrate a lot of interest.

7

Equities Spotlight: Australian Foundation Investment Company

In this week’s equity spotlight, we take a look at listed investment company Australian Foundation Investment Company (AFIC).  Later this week, we’ll also take a look AFIC’s recently-announced convertible note. The Business AFIC is a listed investment company that has been investing in Australian equities for over 80 years.  They are Australia’s largest listed investment

15

Bond, corporate bond

Australians (particularly their fund managers) have traditionally had a love affair with equities – in fact we have the largest portion of our superannuation wealth invested in them than any other comparable country, as shown in this graph (h/t to The Prince). However the GFC ,combined with the last 6 months of Euro-trashed share prices, has

10

Equities Spotlight: Virgin Blue Holdings Ltd

This week’s equities spotlight almost didn’t happen thanks to Qantas, but luckily my wife had the foresight (luck) to book the home leg of our Newcastle-Brisbane trip with Jetstar.  Nonetheless, Brisbane Airport was not a happy place to walk through on Sunday evening – the expressions of people milling around the lounge bars were rather

7

Noting Woolworth’s Notes

Tomorrow is the open date for Woolworth’s latest round of corporate bonds, called Notes II (Notes I having been redeemed in September of this year).  It’s not often we see corporate bonds being offered to the retail investing masses (Australian’s tend to have a love for equities over bonds) so I thought I’d give a

4

Cochlear after the recall

Back in September,  I posted on the recall of Cochlear’s Nucleus 5 implant – COH’s primary device which makes up the lion’s share of Cochlear’s revenues (see full article here).  Since the recall there has been no other information released by Cochlear, who promised to give an update at the AGM.  Well, the AGM was held

12

Chart of the Day: R&D in the OECD

Today’s chart of the day comes courtesy of an ABS report on the R&D expenditure by countries within the OECD.   Below are the R&D expenditures as a % of GDP for a selection of countries from the OECD: Australia ranks 14th amongst the 34 countreis in the OECD.  Israel tops out the list by a full

1

Chart of the Day: US currency moves

Todays’ chart comes courtesy of WSJ blogs.  Below we can see the change in several major currencies against the $US since 2005.  The Yuan has gone up 30%, which is probably more than most trade-enraged US citizens would think. Give some thought to the poor Swiss.  Their exporters are paying the price for the country’s safe-haven status. 

1

Equities Spotlight: Metcash (MTS)

In this week’s equities spotlight, we examine an emerging force in the Australian food retail space – Metcash Ltd. The Business Metcash (MTS) is Australia’s leading wholesale distribution and marketing company specialising in grocery, fresh produce, liquor and hardware.  The wholesale distribution networks supplies IGA retailers, various liquor stores and Campbells – a distributor of

13

Chart of the Day: Qantas’ real problem

Qantas (QAN) has been making headlines recently through industrial disputes with their engineering workforce.  Shareholders may be concerned the dispute will impact QAN’s image or maybe even its profits through future strike action. Well, investors can rest assured that strike action won’t have much of an impact on QAN’s future. As we can see from

4

Chart of the Day: Eurobanks get worse

In today’s chart we have the results of the Euro Banking Association stress tests on 21 major European banks (courtesy of Zero Hedge).  As we can see from the chart below, only 7 of the 21 banks have better tier 1 capital ratios now than they did in 2010. In total, the tier one capital

6

Chart of the Day: Pay dirt in AUD

The Prince is on hiatus for a week, so I’ll be filling his Chart of the Day shoes. Today’s chart shows iron ore and thermal coal prices in Australian dollars.  They are typically quoted in USD however our big miners pay their Oz operations in Oz dollars, so these graphs are important. Iron ore’s recovery from the GFC

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Value investing in volatile times

Several MacroBusiness bloggers have talked about the possibility of share markets entering a period dubbed the “Great Volatility”.  This is essentially a secular bear market where prices rise and fall 20‑50% within a year but give low growth (1-2%) on average over the long term.  This would be in contrast to the “Great Moderation” –

7

Equities Spotlight – Webjet (WEB)

In this weeks second equities spotlight (what a bonanza!), we take a look at online travel company Webjet (WEB). The Business According to the FY11 annual report, Webjet is an: ..an electronic manager, marketer and credit card merchant of travel and related services utilising the internet and other mediums. Webjet started out as a website-based service that

10

Equities Spotlight – Newscorp

With the recent News of the World scandal and the Australian media inquiry it has prompted, today we’ll take a look at the media empire at the centre of it all – Newscorp. The Business Newscorp is a global, diversified media company which operates in the following areas: Cable Network Programming, Filmed Entertainment Television Direct

11

Did you hear about Cochlear?

Cochlear (COH, previously covered at MB here) announced a voluntary recall of its Nucleus 5 implant products yesterday.  The share price was promptly massacred, closing down 20% to $57.50.  The main jist of the recall was as follows: COH is undertaking a voluntary recall of the unimplanted Nucleus CI500 cochlear implant range and is currently

4

Have AUD, will travel

As the readers of MacroBusiness would know, we’ve been banging on about Dutch disease in the Australian economy for some time.  Namely, the higher Australian dollar (that results from our commodities boom and the weakness of other nations currencies) is hampering our manufacturing and export sectors.  This viewpoint was reinforced by a recent round of

7

Seek, and you will find debt

Seek (SEK) released its 2011 results recently.  At Empire Seek has been one of our favourite stocks – a near-wonderful business with good ROE, great branding, total dominance in the Australian and NZ online employment market with a strategy for diversifying revenues through international acquisitions.  Only through lack of a deep competitive moat did it

3

Woolies versus Coles

Woolworths released their FY11 results last Thursday.  The analysts presentation headlined with a 5.1% NPAT increase, which was at the lower end of the 5-8% range given in the last earnings guidance, which was in turn below the 8-10% growth forecast at the start of the year.  As such, the share market reaction was harsh

6

Equity Spotlight – Infomedia Ltd (IFM)

Following on from Monday’s post on high-yield dividend stocks, today we take a quick look at Infomedia Ltd (IFM). Note: I haven’t done my usual job of thoroughly examining the last 5 years of financial data (time constraints of my full-time job), so I’ll be relying on equity, NPAT and assets figures from a proprietary,