Australian Shares


Investing in Grains

Most commentators and analysts focus on the hard commodity story for Australia: iron ore, coking coal and metals like copper and aluminium. International pricing forces, driven by demand in China and India and exarcebated by easy monetary policy across the developed and emerging world is having a similar affect on the so-called soft commodities driving


Shorting the banks

About a year ago, the major banks were concerned enough about hedge funds shorting their shares to investigate privately whether it was occurring. They concluded, at least publicly, that it was not. But as the wedging of Australian banks gets stronger — weakening housing on the one side, harder offshore borrowing conditions on the other


Trading Day: the correction continues

The S&P/ASX 200 is down 22 points or 0.5% at midday, continuing the broad correction since mid-April. Asian markets are mixed, with the Nikkei down 0.1%, the Hang Seng down 0.2 and Singapore steady, on the back of news that Goldman Sachs has downgraded Chinese GDP growth. The AUD is back above 1.05 after dipping


Brokers Fortesmiscue

Fortescue Metals has done something very difficult, even laudable (although not always in the most laudable fashion). It has successfully challenged the iron ore cartel in Australia of BHP and Rio. That may make it good for competition in the sector, but does it make it a good investment? It is certainly down from some


Correlated risk is off

Stock markets around the world are either in full flight correction (Australia) beginning, or wobbling along. Yesterday we had the Asian stock markets, with the ASX200 down 1.88%, Japan (Nikkei 225) down 1.52%, Hong Kong (Hang Seng) over 2.11% and Singapore 1.83%. This action was continued through to Europe, with the German DAX down 2%,


Trading Day – Monday

The S&P/ASX 200 is down over 80 points or 1.5% at midday, reversing all of last week’s gains. Fear is gripping the Asian markets as well, with the Nikkei down 1.3%, the Hang Seng down 1.55% and Singapore over 1%. The AUD is down below 1.06 at 1.0585 against the USD, whilst gold is above


The Twilight Zone

It is not just the MSM (which I assume stands for the Mainstream Meeja), that has rushed to see the good side of the downgrade of the banks. Brokers are acting as apologists, too. Which is to be expected considering how large the banking sector is as a proportion of the All Ords. If about


Trading Day – 20th May

The S&P/ASX 200 is down 22 points or 0.4% at midday, pausing from its rebound rally since Tuesday, mainly from weakness in BHP, RIO and bank stocks (i.e most of the index). Asian markets are up generally, with the Nikkei up 0.3%, the Hang Seng up 0.2% and Singapore steady. The AUD is steady at


Trading Day 19th May – risk back on?

The S&P/ASX 200 is up almost 60 points or 1.3% at midday, clawing back some of the losses of the near month long correction. Asian markets however are mixed on the back of the Japanese GDP shrinking, with the Nikkei down slightly, the Hang Seng up 0.4% and Singapore up 0.5%. The AUD is up


Dollar the destroyer

The full impact of Dutch disease is being tracked by analysts mainly by their looking at the effect of the higher $A on earnings. Deutsche Bank has issued a currency review that tells a mixed tale. Wesfarmers, Sims, Bluescope, OneSteel, CSR, the materials sector, the gaming industry are all “negatively impacted”. Companies with significant off shore


Equities Spotlight: BHP

This is the first of a regular equities analysis post we’ll be introducing to MacroBusiness.  In the posts we’ll be taking a single company and analysing its business and financials from the perspective of a fundamental/value investor.   In a continuation of this week’s earlier post on BHP and the AUD, today we  look at BHP Billiton. The Business BHP


Fund managers rotate

  There are growing signs of pessimism amongst fund managers globally, a point that has already been well covered on MacroBusiness. How is this affecting trading strategies and asset allocations? Merrill Lynch’s May fund managers survey sheds some light. It says that investors are questionnig global growth prospects. Only 10% expect stronger global growth in


Trading Day – 18th May

The S&P/ASX 200 is up over 20 points at midday, slowing down amidst a correction that began in early April (down over 7% or 250 points). Asian markets are all up, the Nikkei 0.6%, the Hang Seng 0.29% and Singapore steady. The AUD is up slightly to 1.0609 against the USD, whilst gold is falling


Radioactive Paladin

  If there is a one way bet in the world economy, it is energy. Each year, China adds the equivalent of Britain’s entire annual energy supply and there is little sign of this slowing. So uranium should, as they say, be “part of the mix”. Which should mean that Paladin remains a nice little


Trading Day – 17th May

The S&P/ASX 200 is steady this afternoon, pausing in the second leg of a correction that began in early April (down over 7% or 300 points). Asian markets are also down, the Nikkei down 0.44%, the Hang Seng 0.45% and Singapore 0.86%. The AUD is up slightly to 1.0562 against the USD, whilst gold is


Bears come out to play

Brokers have caught on. They must be reading MacroBusines. Much of the Australian economy is not in good health, Dutch disease is fast becoming Australian disease, and earnings forecasts in many sectors may be pretty dodgy. As more bearish sentiment starts to grip the market, the question it raises is: is it time to buy


Trading Day – 16th May

The S&P/ASX 200 is down over 1% this afternoon, continuing the second leg of a correction that began in early April (down over 7%). Asian markets are also down, with the Nikkei down 0.6%, the Hang Seng 1% and Singapore 0.7%. The AUD is down to 1.05 against the USD, and 85 against the Yen


BHP and the buck

As most of us will have heard, we’re a blessed country entering a second mining boom that is starting up after the first one was doused by the GFC in 2007.  This second boom will be longer and stronger than all before it, improving our terms of trade beyond anything this sunburnt country has experienced


Trading Day – Friday the 13th

The S&P/ASX 200 is down slightly this afternoon, with some intra-day buying support similar to US markets recovery last night. Asian markets are down, with the Nikkei down 0.25%, the Hang Seng 0.4% but Singapore up over 0.46%. The AUD is back to 1.06 against the USD, and 86 against the Yen (which is highly


Trading Day – 12th May

The S&P/ASX 200 is down over 1.4% this afternoon, after digesting the slump in commodity prices and US/Euro markets overnight. Asian markets are all down, with the Nikkei down 0.8%, the Hang Seng almost 1% and Singapore just over 0.6%. The AUD has slumped to just above 1.06 against the USD, with a midday update


Grantham calls the top

For those of you with a memory longer than a few days, it was Jeremy Grantham of GMO who famously called the bottom in the great GFC equity rout. Whilst I never put anyone on a pedestal, Granthan is one of the few equity strategists that sees the way markets actually work these days. Overnight


Trading Day – 11th May

The S&P/ASX 200 is up almost 1% this afternoon, after digesting last night’s Budget. Asian markets are up generally, with the Nikkei up 0.5%, the Hang Seng steady and Singapore up slightly. The AUD is rising past 1.085 again against the USD and 87 against the Yen (which is highly correlated with the ASX200) Local


Budget buy bye

The budget does not seem to have spooked equity analysts, but it has not excited them, either. Perhaps, as Delusional Economics suggests, it is about the best that can be done in the circumstances — that is, not much. Balance the books, hope China continues to do well, nibble at the marging on skills shortage


Trading Day – 10th May

The S&P/ASX 200 is down slightly at midday, with strong intra-day selling pressure. Asian markets are mixed, with the Nikkei down a little but Hang Seng and Singapore up. The AUD is steady at 1.07 against the USD and 86.5 against the Yen (which is highly correlated with the ASX200) Short term price action as


Lilliput Inc.

Australia’s bigger companies, with a few exceptions such as BHP, Rio and News Corporation, are awful at globalisation. This is becoming obvious with the Australian dollar at such high levels. Global companies adapt to high currencies by relocating production elsewhere, acquiring offshore, manipulating their cross border value chains. That way they can at least respond,


Low flying birds

I am not sure exactly why people invest in Australian airlines. Qantas is busy cannibalising itself with Jetstar. This was always a danger for a member of a protected duopoly, that it would go for the low cost solution and get a low cost result. Virgin Blue, sorry, Virgin Australia, is not expected to pay a dividend and


Trading Day – 9th May

The S&P/ASX 200 is up 1% at almost 4800 points after finding a bottom late last week. Other Asian markets are mixed, with the Nikkei down a little but Hang Seng up, Singapore steady after their weekend election results. Short term price action as illustrated last week showed a decelerating correction – it looks like


Trading Day – 6th May

The S&P/ASX 200 is down but slowly recovering at 4740 points after last nights shock fall in commodity markets (oil down 10% alone, AUD/USD down to 1.05) Short term price action resembles a decelerating downtrend (note red curve under low points in last week on chart below). The index (XJO) is hovering above its 260


Sell in May – a repeat of 2010?

Regular readers may remember that each morning I peruse my bearish sounding “Crashlist” before starting the day trading the Australian equity markets. This list comprises the major currencies crosses, indices, gold, 10 year US T-Note and the US Dollar Index. A well deserved dip in “risk” markets across the world has been transpiring for most


Hating Telstra

The market’s scepticism about Telstra is one of the most sustained negative critiques of a big Australian corporate yet seen. It makes an interesting comparison to the euphoria about telcos in the first half of last decade. The scepticism may be partly attributable to the after effects of that era. The stock is on a