My fellow blogger, Houses and Holes, has magisterially, even regally, detailed how private debt has come to matter in Canberra circles since the global financial crisis. It seems Australia’s largest companies agree. The game of pass the parcel – private business gets the profits and ideological smugness; governments get the losses, debt problems and blame
What are companies going to do with their abundant capital? The answer to that question will determine much about the medium term future of global stock markets. Much has been made of the two speed global economy, with the developed world struggling and the developing world growing fast. But there is another two speed system,
With the US stock market on one of the greatest tears that this blogger can recall and the NASDAQ just 50 points shy of its post-bust high, it’s time we took a step back and looked at the bigger picture. Above is the most amazing chart in modern finance: 25 years of the S&P500 graphed
Two exalted members of Australia’s cartels are in town and telling very different stories. Telstra lobbed a 36% profit fall, albeit accompanied by bullish forecasts about the company’s glorious transformation. Rio Tinto reported a massive US$14 billion full year profit and a 20 per cent jump in its dividend. It is hard to imagine two
What exactly was normal about a global debauch with inflated asset prices, the proliferation of eye watering levels of debt, the invention of multiple layers of new forms of securitisation and derivatives that imperilled the entire monetary system, circular risk management practices and a Wall Street and City of London-driven kleptocracy whose greed ultimately led
OK, Australian mining’s booming. But the stock market is not reflecting it. A report by Deutsche Bank ranks equity market returns in local currency since the beginning of last year. Australia comes second last, with only Brazil doing worse. Both countries are beneficiaries of the commodities boom and China’s rise, which tells you something about
The news that Qantas is looking at an alliance with a large Asian carrier may be too little too late. Will Qantas have much of a brand to bring to the table? Its heavy focus on the domestic market has not done its brand any favours, indeed it has done damage. In order to have a
Analysts’ forecasts for the reporting season are showing just how biased the Australian economy is becoming towards the mining sector. UBS is estimating earnings per share growth for this financial year to be 14.4 per cent. Resources are predicted to be up 43 per cent, the rest of the market up only 4.5 per cent.
Here’s the latest idea in the market. Dividend payments from mining companies (yes, some mining companies pay dividends). The long term commodity boom, which is dominated by a global oligopoly, may be triggering a change in the way mining companies are evaluated, away from capital gains and towards dividend. Analysts are trying to ride the sentiment; probably as a
Today’s report by UBS on global equity market performance in last December highlights the value of buying after bad news. The best performing market was … Greece. Presumably after the announcements that Japan and China would pitch into help the Eurozone debt auctions. Those who bought during the Greece crisis will have done well. Of course China will help the Euro; it is positioning to take
Will the uprising in Egypt be an influence on the Woolworths share price? The interconnection of the global economy can be exaggerated, of course. The news that Coles is rapidly catching up will be exciting more investment attention in the short term. Coles’ food and liquor sales grew by 6.3%in the latest half compared with 3.5%
OK, the stock’s a dog. But might it be a counter cyclical punt? The announcement by Downer EDI that it would make a further $250 million provision for its Waratah project saw the shares fall by about a fifth. “Problems are compounding with no end in sight” Morningstar warns. “Here we go again” Macquarie Equities
There is the sound of distant murmuring as concerns rise in the media and amongst economists that inflation is on the rise, raising the prospect that the Reserve Bank will raise rates further. Australia, it seems, is different and that has consequences for investment. It already has comparatively high interest rates compared with most of the developed
The news that Village Roadshow is looking to sell its 52% stake in its radio investment Austereo has led to speculation amongst the chatterazzi that Village is looking to privatise. Maybe. Although if the chatterazzi are predicting it surely that is unlikely to be the real motive. More probable is that Village needs the cash.
The chatterazzi are indulging in hand wringing over Woolworths’ first profit downgrade since the company re-listed 19 years ago. “Strange days indeed” says one broker. “Myriad factors” are “laying siege to the fortunes and future of our major retailers” says The Age. Have to keep a watchful eye on those “myriad factors” at all times
Australia’s corporate sector, having resoundingly failed the test of globalisation, is now unerringly positioning itself to become part of the global food chain. Many ASX listed companies are likely to be swallowed up by global players that possess the managerial skill so lacking in Australia’s cartels. Just imagine how much more they will be worth if they are