Australia without mining
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- Miles Foster
- 5 years ago
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1 AUSTRALIA What would happen if iron ore spot prices remained at current levels? USD/tonne Iron ore Spot Price 5 Aug-9 Oct-1 Dec-11 Feb-13 Source; ABS, Macquarie Research, September 1 What happens when investment falls? Event Iron ore prices have fallen by % in the past month and are likely to remain volatile. While our commodity team expect prices to recover eventually, this note examines the consequences for the economy and financial markets, if they don t improve. Impact Sharp falls in commodity prices undermine mining company cash flow, which could prompt firms to divest assets and cut capex budgets. With mining investment the mainstay of Australian growth in recent years, were mining investment to fall in 13, the economy could shrink. This possibility would trigger further aggressive monetary policy easing from the Reserve Bank of Australia (RBA), while the combination of lower commodity prices, and a narrowing interest rate differential would remove support from the A$. Furthermore, the combination of reduced mining company profits and weaker economic growth would place severe strains on government revenue and lead to a large budget deficit. That may also undermine foreign investor appetite for Australian government bonds which has also supported the A$. Outlook In a recent note, Pressures rise as prices fall, 31 August 1, our iron ore research analysts undertook some scenario work on what might happen to the three big iron ore operators if in contrast to their base expectation prices don t bounce back from current levels. From an economic perspective, their key conclusion is that Rio could almost halve its anticipated capex budget over the next 1 months while BHP could defer 5% of sustaining capex and exploration. This is obviously a sharp fall, but what would it mean for overall business investment? Assuming that investment spending on coal-seam gas projects remains resilient, this would likely mean that overall business investment in 13CY would fall by 1%. The Consensus Economics mean forecast for business investment in 13 is +11.7%, so this would equate to a % downgrade relative to expectations. With business investment accounting for almost % of GDP this downgrade would directly cut ppts from Domestic Final Demand growth. But some of this will be reflected in weaker imports, rather than domestic production, so the direct net impact on GDP growth would be closer to ppts. 3 September 1 Macquarie Securities (Australia) Limited Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website
2 Fig 1 Mining investment has fallen sharply before Fig Total investment would fall by 1% in 13CY % YoY % YoY Total Investment Mining Investment Jun-97 Jun- Jun-3 Jun-6 Jun-9 Jun-1 Source: ABS, Macquarie Research, September 1 Source: ABS, Macquarie Research, September % YoY Total Investment Total Investment Mining Investment Mining Investment -6 Jan-8 Jan-1 Jan-1 Jan-1 But this is only part of the story. In a speech given last year, the head of the Commonwealth Treasury s Macroeconomic Group, David Gruen, cited research which indicated that while the mining sector itself was a little more than 1% of the economy, mining-related sectors accounted for 9% of the economy (see: The macroeconomic and structural implications of a once-in-alifetime boom in the terms of trade ). So if we allow for some multiplier effects of the fall in mining investment, the total impact on GDP growth could be easily 3ppts. This would essentially mean that the Australian economy would be headed for recession. Fig 3 The total impact on GDP growth could easily be 3ppts % annual average GDP Growth % annual average GDP 1-1 Mar-8 Mar-9 Mar-1 Mar-11 Mar-1 Mar-13 Mar-1 Source: ABS, Macquarie Research, September 1-1 Faced with this scenario, policymakers wouldn t stand idly by and watch (we would hope). And certainly the RBA has been prepared to cut rates aggressively when it thinks the growth outlook is at risk. So how much further could interest rates fall? To answer this question we refer to a Research Discussion Paper from the RBA, entitled A Sectoral Model of the Australian Economy (RBA RDP 8-1 by Jeremy Lawson and Daniel Rees). It suggests that a 5bps cut in the cash rate would boost growth by.ppts. While these estimates only provide rough rules of thumb, they suggest that if the RBA did cut rates by bps from current levels, it might boost growth by about 1½ppts. In our view, this is the minimum that the RBA would be hoping for. 3 September 1
3 It is important to note, however, that even this sort of aggressive easing would probably not avert recession, because of timing issues. That is, the positive impact of rate cuts will only become fully apparent after 1-18 months, while the fall in mining investment is likely to be concentrated within the first 6 months. Fig The RBA will cut interest rates aggressively to support growth % 1 % Standard Variable Mortgage Rate RBA Cash Rate Cash Rate SVMR Aug- Aug- Aug- Aug-6 Aug-8 Aug-1 Aug-1 Source: RBA, Macquarie Research, September 1 Sharp falls in interest rates combined with much lower commodity prices and a bleak growth outlook would also remove many of the supports for the Australian dollar. Our simple model of the A$ suggests that this could see the currency fall from its current level above parity down to around US 85 cents. Of course, foreign exchange markets are well known for their tendency to overshoot, and so it is distinctly possible that the currency could fall much further than this. Fig 5 Lower commodity prices and a narrowing interest rate differential will put pressure on the Australian Dollar AUD/USD Australian Dollar AUD/USD Jan-8 Jan-9 Jan-1 Jan-11 Jan-1 Jan-13 Source: Datastream, Macquarie Research, September 1.6 One factor that could add to negative momentum for the currency would be concerns about the fiscal outlook. While we don t believe that Australia is at risk of losing its AAA rating any time soon, the Australian Financial Review reported that Kyran Curry, S&P s director of sovereign ratings said an extended delay in returning the budget to surplus would be inconsistent with Australia s present rating. 3 September 1 3
4 We have already shown how the current low level of commodity prices makes it much more difficult for the government to return the budget to surplus in 1-13 (see Budget Update: How is the surplus forecast faring?, 1 August 1). But when this is overlayed with falling growth and the inevitable calls for fiscal stimulus, it is quite likely that there would be an extended delay in returning the budget to surplus. Even speculation that Australia could lose its AAA status a few years down the track could be sufficient to deter those offshore investors which have been big buyers of Commonwealth Government Securities in recent years and which have also provided support for the A$. Of course, the weaker A$ will also provide support for the economy as it boosts the competitiveness of exporters (and import competing firms such as manufacturing) and prompts consumers to switch away from overseas goods towards local alternatives (such as taking a holiday in the Blue Mountains rather than the Rocky Mountains). But again we would note that this positive impact will only occur with a lag. And so even if the currency falls quickly, it will take at least 6-1 months for the improved competitive position of firms to translate through into stronger orders, production levels and employment and investment plans. Finally, we consider the potential impact on employment. A crude version of Okun s Law (which relates GDP growth to changes in the unemployment rate) suggests that if economic growth is 3ppts lower than potential, the unemployment rate would rise by 1.ppts, or a rise in the unemployment rate from 5¼% to 6½%. Of course, growth would remain below trend in the following year -- or two -- as well, which suggests that the unemployment rate would eventually rise towards 8%. This deterioration in the labour market would also give fresh impetus to all those claims that the Australian economy is on the edge of a precipice. With unemployment rising, there would be renewed fears about the bad debt cycle and the health of the banks. That would fan fears that bank funding would come under renewed threat, or that they wouldn t be able to fully pass on the RBA rate cuts to borrowers, which would weaken the transmission of RBA rate cuts through to the economy. Fig 6 Okun s Law suggests that the unemployment rate could rise by 3ppts Fig 7 Employment in the resource rich states will be at risk % % Unemployment Rate Dec-89 Dec-9 Dec-99 Dec- Dec-9 Dec-1 Source: ABS, Macquarie Research, September 1 Source: ABS, Macquarie Research, September Change in employment since Mar 11, s WA Rest of Australia -5 Mar-11 Jun-11 Sep-11 Dec-11 Mar-1 Jun-1 Conclusion Our base case is that commodity prices do improve from current levels as the Chinese destocking cycle eventually comes to an end. But even if the present period does not signal an early end to the mining investment boom, it might be a foretaste of things to come at a later stage. This note has presented a scenario taking as our starting point the potential impact on mining investment that would occur as mining companies cut spending in response to reduced cash flows. 3 September 1
5 In our view, three points quickly emerge. First, that the impact of a rapid decline in mining investment would be severe on the economy. Second, that one should not take too much consolation from the fact that there are still many investment plans on the books: if cash flows evaporate, investment will be cut back. Third, that the current level of iron ore prices is not consistent with the current level of the A$. In the past we have argued that the A$ is not solely driven by commodity prices, but that interest-rate differentials and Australia s AAA credit rating have become increasingly important factors. But as we have argued in this note, if iron ore prices were to remain at current levels, that would have a material impact on those other factors that are currently supporting the A$. In our view, the relative resilience of the A$ suggests that most investors believe that iron ore prices will recover over the next few months. But if they don t then this could be the Wile E. Coyote moment for the A$. What we are referring to here is the well-known cartoon character who, when he's chasing the Road Runner, frequently runs off the edge of a cliff. But, initially at least, he doesn t fall. His legs are still running as if he is on land and he remains suspended in mid air. But then he looks down, and realises that there is nothing supporting him, and it is only then that he succumbs to the forces of gravity and plunges towards the valley floor. 3 September 1 5
6 Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 1 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie First South - South Africa Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3 index return Neutral (Hold) return within 5% of Russell 3 index return Underperform (Sell) return >5% below Russell 3 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down 6 1% in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 6% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 3 % in a year. Low medium stock should be expected to move up or down at least 5 3% in a year. Low stock should be expected to move up or down at least 15 5% in a year. * Applicable to Australian/NZ/Canada stocks only Recommendations 1 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 3 June 1 AU/NZ Asia RSA USA CA EUR Outperform 55.67% 61.% 53.3%.58% 69.3% 6.6% (for US coverage by MCUSA, 9.5% of stocks followed are investment banking clients) Neutral 3.5%.11% 36.99% 5.1% 8.% 33.69% (for US coverage by MCUSA, 8.1% of stocks followed are investment banking clients) Underperform 13.83% 16.89% 9.59% 5.1%.75% 19.71% (for US coverage by MCUSA,.5% of stocks covered are investment banking clients) Company Specific Disclosures: Important disclosure information regarding the subject companies covered in this report is available at Analyst Certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN , AFSL No. 3186) ( MGL ) and its related entities (the Macquarie Group ) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General Disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN , AFSL No. 3897) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN , AFSL No. 375) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN , AFSL No. 375) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return and delete the document. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at 3 September 1 6
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CBA CBA CBA CBA AUSTRALIA Changes to lending rates (bps) bps Owner Occupier Investor P&I IO P&I IO 0 20 25 36 CBA 3 25 24 26 7 7 25 25 3 8 23 28 BEN 0 0 25 25 Source: Company data, Macquarie research,
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AUSTRALIA COH AU Price (at 06:47, 26 May 2015 GMT) Outperform A$88.66 Valuation A$ 81.19 - DCF (WACC 8.0%, beta 1.0, ERP 5.0%, RFR 3.8%, TGR 3.0%) 12-month target A$ 95.00 12-month TSR % +9.8 Volatility
More informationSeek. Progresses Zhaopin privatisation A$16.33 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SEK AU Price (at 06:33, 07 Apr 2017 GMT) Outperform A$16.33 Valuation - Sum of Parts A$ 16.77 12-month target A$ 16.50 12-month TSR % +3.9 Volatility Index Low/Medium GICS sector Commercial &
More informationCoca-Cola Amatil. Not as fizzy as it looks A$8.78 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA CCL AU Price (at CLOSE#, 21 Aug 2015) Underperform A$8.78 Valuation A$ 8.47 - DCF (WACC 8.7%, beta 1.0, ERP 5.0%, RFR 3.8%, TGR 1.9%) 12-month target A$ 8.99 12-month TSR % +7.3 Volatility Index
More informationOz Minerals. On track to meet guidance A$6.51 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA OZL AU Price (at 08:20, 22 Jul 2016 GMT) Underperform A$6.51 Valuation A$ - DCF (WACC 9.0%, beta 1.4, ERP 5.0%, RFR 3.3%) 4.31 12-month target A$ 5.00 12-month TSR % -21.4 Volatility Index High
More informationGenworth Mortgage Insurance Australia
AUSTRALIA GMA AU Price (at 07:29, 05 Aug 2015 GMT) Outperform A$3.50 Valuation A$ - DCF (WACC 12.0%, beta 1.6, ERP 5.0%, RFR 4.5%) 3.52 12-month target A$ 3.47 12-month TSR % +9.2 Volatility Index Medium
More informationNuplex Industries. Should benefit from a weak Kiwi NZ$4.55 NEW ZEALAND. Event. Impact. Earnings and target price revision.
NEW ZEALAND NPX NZ Price (at 05:00, 31 Jul 2015 GMT) Outperform NZ$4.55 Valuation NZ$ 4.40 - DCF (WACC 12.5%, beta 1.4, ERP 7.0%, RFR 4.5%, TGR 2.0%) 12-month target NZ$ 4.75 12-month TSR % +10.6 Volatility
More informationMeridian Energy. On tax depreciation NZ$2.08 NEW ZEALAND. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
NEW ZEALAND MEL NZ Price (at 05:00, 13 Jul 2015 GMT) Outperform NZ$2.08 Valuation NZ$ 2.50 - DCF (WACC 7.8%, beta 0.6, ERP 7.0%, RFR 3.6%, TGR 2.0%) 12-month target NZ$ 2.60 12-month TSR % +31.7 Volatility
More informationAustal. Retail take up 62% Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA ASB AU Price (at 01:41, 02 Jan 2013 GMT) A$0.58 Volatility index Medium GICS sector Capital Goods Market cap A$m 201 30-day avg turnover A$m 0.3 Number shares on issue m 346.0 Investment fundamentals
More informationOrigin Energy. 4Q Production. ORG reported its 4 th quarter production report, following on ConocoPhilips quarterly result.
AUSTRALIA ORG AU Price (at 06:11, 30 Jul 2015 GMT) Neutral A$11.35 Valuation A$ 12.79 - DCF (WACC 10.3%, beta 1.3, ERP 5.0%, RFR 3.8%, TGR 2.0%) 12-month target A$ 12.89 12-month TSR % +18.1 Volatility
More informationKingsgate Consolidated
AUSTRALIA KCN AU Price (at 6:11, 31 Jul 215 GMT) Underperform A$.67 Valuation A$ - DCF (WACC 12.%, beta 1.6, ERP 5.%, RFR 3.8%).3 12-month target A$.3 12-month TSR % -54.9 Volatility Index Very High GICS
More informationOz Minerals. Solid start to the year A$5.62 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA OZL AU Price (at 6:24, 21 Apr 216 GMT) Underperform A$5.62 Valuation A$ - DCF (WACC 1%, beta 1.4, ERP 5.%, RFR 3.8%) 4.61 12-month target A$ 4.6 12-month TSR % -15.5 Volatility Index High GICS
More informationTelstra Corporation. Vodafone better, but far from good A$6.43 AUSTRALIA. Event. Impact. Earnings and target price revision.
AUSTRALIA TLS AU Price (at 11:23, 21 Jul 2015 GMT) Neutral A$6.43 Valuation A$ 6.37 - DCF (WACC 6.8%, beta 0.8, ERP 5.0%, RFR 3.8%, TGR 1.2%) 12-month target A$ 6.30 12-month TSR % +3.3 Volatility Index
More informationBillabong International
AUSTRALIA BBG AU Price (at 06:10, 27 Aug 2012 GMT) A$1.35 Volatility index Very High GICS sector Consumer Durables & Apparel Market cap A$m 644 30-day avg turnover A$m 4.4 Number shares on issue m 478.9
More informationFortescue Metals Group
AUSTRALIA FMG AU Price (at 5:1, 5 Mar 215 GMT) Neutral A$2.29 Valuation A$ 2.6 - DCF (WACC 1.%, beta 1.4, ERP 5.%, RFR 3.8%, TGR 2.6%) 12-month target A$ 2.6 12-month TSR % +16. Volatility Index High GICS
More informationSirtex Medical. Healthy dose sales. Earnings and target price revision. Price catalyst. Catalyst: FY16 result on the 24th of August
AUSTRALIA SRX AU Price (at CLOSE#, 11 Jul 2016) Outperform A$27.88 Valuation A$ 37.93 - DCF (WACC 9.0%, beta 1.2, ERP 5.0%, RFR 3.3%, TGR 1.5%) 12-month target A$ 38.00 12-month TSR % +37.4 Volatility
More informationCommodities Comment. PGM cost curve another difficult year for S. African miners GLOBAL. Feature article. Latest news
GLOBAL LME cash price % change US$/tonne day on day Aluminium 1,921-0.4 Copper 5,737-0.7 Lead 2,285-2.5 Nickel 9,703-1.1 Tin 19,520-1.8 Zinc 2,742-2.5 Cobalt 53,750 0.0 Molybdenum 14,899 0.0 Other prices
More informationSenex Energy Production and revenue unsurprised, cash builds on lower capex
26 April 2018 Australia EQUITIES SXY AU Price (at 06:10, 26 Apr 2018 GMT) Outperform A$0.42 Valuation A$ 0.49 - DCF (WACC 9.1%, beta 1.5, ERP 4.0%, RFR 4.3%) 12-month target A$ 0.50 12-month TSR % +19.0
More informationNEW ZEALAND Price Valuation NZ$ 1.74 Event 12-month target NZ$ month TSR % -10.1
NEW ZEALAND GNE NZ Price (at 05:06, 24 Feb 2015 GMT) Underperform NZ$2.20 Valuation NZ$ 1.74 - DCF (WACC 8.1%, beta 0.6, ERP 7.0%, RFR 3.6%, TGR 2.1%) 12-month target NZ$ 1.82 12-month TSR % -10.1 Volatility
More informationCommodities Comment. Xiongan A new city with new metals demand GLOBAL. Feature article. Latest news
GLOBAL LME cash price % change US$/tonne day on day Aluminium 1,940-0.4 Copper 5,827-0.7 Lead 2,285-0.7 Nickel 10,019-2.1 Tin 20,368 1.1 Zinc 2,701-1.8 Cobalt 55,750-0.9 Molybdenum 14,900 0.0 Other prices
More informationAventus Retail Property Fund
AUSTRALIA AVN AU Price (at 06:10, 29 Apr 2016 GMT) A$2.16 Volatility Index Low GICS sector Real Estate Market cap A$m 741 30-day avg turnover A$m 0.7 Number shares on issue m 343.2 Investment fundamentals
More informationSpotless Group Holdings
AUSTRALIA SPO AU Price (at 05:45, 31 Jan 2017 GMT) Neutral A$0.94 Valuation - Peer multiples A$ 1.02 12-month target A$ 1.02 12-month TSR % +18.3 Volatility Index High GICS sector Commercial & Professional
More informationIron Mountain. US$10 worth Recalling at investor day US$31.83 UNITED STATES. Event. Impact. Earnings and target price revision.
UNITED STATES IRM US Price (at 20:03, 07 Oct 2015 GMT) Outperform US$31.83 Valuation - DCF (WACC 6.1%) US$ 40.00 12-month target US$ 40.00 12-month TSR % +31.6 GICS sector Real Estate Market cap US$m 6,711
More informationJB Hi-Fi & Harvey Norman
AUSTRALIA HVN AU Price (at 06:10, 09 Sep 2015 GMT) Underperform A$3.96 Valuation - EV/EBIT A$ 4.16-4.56 12-month target A$ 4.36 12-month TSR % +12.0 Volatility Index Low Market cap A$m 4,523 30-day avg
More informationPanAust. Larger impairment and dividend cut A$1.35 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA PNA AU Price (at 7:6, 19 Feb 215 GMT) Outperform A$1.35 Valuation A$ - DCF (WACC 11.%, beta 1.7, ERP 5.%, RFR 3.8%) 1.73 12-month target A$ 1.7 12-month TSR % +25.9 Volatility Index High GICS
More informationAged Care. Propco sale & lease back A$2.71 A$5.75 A$6.15 AUSTRALIA. Event. Impact. Outlook
AUSTRALIA JHC AU Price (at 06:10, 27 Apr 2015 GMT) Outperform A$2.71 Valuation A$ 2.97 - DCF (WACC 9.1%, beta 1.1, ERP 5.0%, RFR 4.5%, TGR 2.3%) 12-month target A$ 3.00 12-month TSR % +14.7 Volatility
More informationSouthern Cross Media. Streamlining ahead of reform? A$1.37 AUSTRALIA
AUSTRALIA SXL AU Price (at 05:10, 27 Mar 2017 GMT) Neutral A$1.37 Valuation A$ - DCF (WACC 8.0%, beta 1.2, ERP 5.0%, RFR 3.3%) 1.39 12-month target A$ 1.30 12-month TSR % +0.8 Volatility Index Medium GICS
More informationEuropean and UK economics
EUROPE/UNITED KINGDOM To all intents and purposes the Euro area is in recession QoQ % Euro area GDP QoQ (LHS) YoY % Euro area GDP YoY (RHS) 6 3 1-1 - - - -3 Jun Jun 3 Jun 6 Jun 9 Jun 1 Source: Eurostat,
More informationFisher & Paykel Healthcare
NEW ZEALAND FPH NZ Price (at 03:59, 16 Mar 2015 GMT) Outperform NZ$6.63 Valuation NZ$ 6.86 - DCF (WACC 8.8%, beta 0.9, ERP 7.0%, RFR 4.5%, TGR 2.0%) 12-month target NZ$ 7.25 12-month TSR % +11.6 Volatility
More informationCSL: Global plasma report
AUSTRALIA AU Price (at 10:49, 11 Apr 2013 GMT) Outperform A$59.35 Volatility index Low 12-month target A$ 63.85 12-month TSR % +9.6 Valuation A$ 59.84 - DCF (WACC 8.5%, beta 0.9, ERP 5.0%, RFR 5.0%, TGR
More informationPerseus Mining. Revised Sissingué plan A$0.31 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA PRU AU Price (at 5:1, 31 Mar 217 GMT) Neutral A$.31 Valuation A$ - DCF (WACC 1.%, beta.4, ERP 5.%, RFR 3.3%).35 12-month target A$.32 12-month TSR % +3.2 Volatility Index Very High GICS sector
More informationOrocobre. Upside exposure fading. Earnings and target price revision. Price catalyst. Catalyst: Update on projects or Q1 report
AUSTRALIA ORE AU Price (at 5:11, 28 Feb 217 GMT) Neutral A$3.8 Valuation - DCF (WACC 1.%) A$ 1.34 12-month target A$ 3.17 12-month TSR % +2.9 Volatility Index High GICS sector Materials Market cap A$m
More informationSuper Retail Group (SUL AU) Are we there yet?
25 October 2018 Australia EQUITIES SUL AU Price (at 09:01, 24 Oct 2018 GMT) Neutral A$8.33 Valuation A$ 8.30-9.50 - EV/EBITA 12-month target A$ 8.70 12-month TSR % +10.9 Volatility Index GICS sector Low/Medium
More informationRegis Resources. Strong 1H15 result A$1.29 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA RRL AU Price (at 7:29, 13 2 GMT) Outperform A$1.29 Valuation A$ - DCF (WACC 9.%, beta 1.5, ERP 5.%, RFR 3.8%) 1.68 12-month target A$ 1.7 12-month TSR % +37.2 Volatility Index High GICS sector
More informationCommodities Comment. China Copper Survey: Demand picking up, sentiment remains positive GLOBAL. Feature article. Latest news
GLOBAL LME cash price % change US$/tonne day on day Aluminium 1,914.2 Copper 5,748-1.8 Lead 2,27.2 Nickel,97 -.1 Tin 2,495. Zinc 2,89-1.2 Cobalt 52,75. Molybdenum 14,9. Other prices % change day on day
More informationANZ Bank. What execution risk? Earnings and target price revision. Price catalyst. Catalyst: 1Q17 Trading update, February 2017.
AUSTRALIA ANZ AU Price (at 09:15, 18 Jan 2017 GMT) Neutral A$30.11 Valuation A$ 30.69- - Sum of Parts/GG 31.47 12-month target A$ 31.00 12-month TSR % +8.4 Volatility Index Low/Medium GICS sector Banks
More informationThe quiet achiever. Earnings and target price revision. Price catalyst. Catalyst: July building approvals 30 August. Action and recommendation
AUSTRALIA ABC AU Price (at 08:02, 16 Aug 2012 GMT) Outperform A$2.90 Volatility index Low/Medium 12-month target A$ 3.10 12-month TSR % +13.0 Valuation A$ 3.18 - DCF (WACC 10.0%, beta 1.2, ERP 4.5%, RFR
More informationBendigo and Adelaide Bank
AUSTRALIA BEN AU Price (at CLOSE#, 17 Aug 2012) Neutral A$8.69 Volatility index Low 12-month target A$ 9.28 12-month TSR % +14.0 Valuation - DCF (WACC 12.1%) A$ 8.28 GICS sector Banks Market cap A$m 3,447
More informationFund Managers. Aust. Fund managers review & rank AUSTRALIA. Event. Stock Views
AUSTRALIA 4 February 2016 Macquarie Securities (Australia) Limited Aust. Fund managers review & rank Event We review and rank the listed Australian under Macquarie Securities coverage, assessing fund performance,
More informationKaroon Gas. What a difference a day makes A$1.63 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA KAR AU Price (at 05:10, 16 Mar 2017 GMT) Outperform A$1.63 Valuation A$ - DCF (WACC 11.1%, beta 1.7, ERP 5.0%, RFR 3.3%) 2.79 12-month target A$ 2.40 12-month TSR % +47.7 Volatility Index High
More informationCommodities Comment. Chinese steel sentiment extremely positive ahead of peak season GLOBAL. Feature article. Latest news
GLOBAL LME cash price % change US$/tonne day on day Aluminium 1,875 -.7 Copper 6,46 -.2 Lead 2,256-2. Nickel,799-2.7 Tin 19,756 -.5 Zinc 2,873 -.5 Cobalt 47,7. Molybdenum 14,898. Other prices % change
More informationCarsales.com. Motoring along nicely A$10.23 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA CRZ AU Price (at 9:48, 18 Feb 15 GMT) Outperform A$1.23 Valuation A$ 12.59 - DCF (WACC 8.1%, beta 1.2, ERP 5., RFR 3.8%, TGR 3.) 12-month target A$ 12.3 12-month TSR % +24.1 Volatility Index
More informationTatts Group. Earnings and target price revision. Price catalyst. Action and recommendation. Maintain Underperform on valuation grounds.
AUSTRALIA TTS AU Price (at 8:37, 23 Aug 212 GMT) Underperform A$2.79 Volatility index Low 12-month target A$ 2.45 12-month TSR % -6.8 Valuation - Sum of Parts A$ 2.4-2.47 GICS sector Consumer Services
More informationSandfire Resources. Swings to net cash A$5.34 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SFR AU Price (at 6:11, 7 Jul 216 GMT) Outperform A$5.34 Valuation A$ - DCF (WACC 9.%, beta 1.4, ERP 5.%, RFR 3.3%) 5.82 12-month target A$ 6.1 12-month TSR % +18.3 Volatility Index Medium GICS
More informationDowner EDI Two out of three ain t bad Event
AUSTRALIA DOW AU Price (at 06:26, 01 Dec 2016 GMT) Outperform A$6.08 Valuation - Sum of Parts A$ 5.69-6.38 12-month target A$ 6.40 12-month TSR % +9.6 Volatility Index Medium GICS sector Commercial & Professional
More informationCommodities Comment. China copper survey: demand remains robust GLOBAL. Feature article. Latest news
GLOBAL LME cash price % change US$/tonne day on day Aluminium 1,661 2.3 Copper 4,722 2.2 Lead 2,39 1.5 Nickel 1,189 1.2 Tin 2,535 1.7 Zinc 2,356 2.4 Cobalt 28,648.5 Molybdenum 14,828. Other prices % change
More informationPilbara Minerals (PLS AU) Ramp-up gaining traction
17 January 219 Australia EQUITIES PLS AU Price (at 5:1, 16 Jan 219 GMT) Outperform A$.7 Valuation A$ 1.11 - DCF (WACC 1.%, beta 1.6, ERP 5.%, RFR 3.8%) 12-month target A$ 1.2 12-month TSR % +72.7 Volatility
More informationSingTel. Optus rises A$3.98 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA SGT AU Price (at 05:10, 12 Feb 2015 GMT) Outperform A$3.98 Valuation - Sum of Parts A$ 4.64-4.73 12-month target A$ 4.69 12-month TSR % +22.4 Volatility Index Low GICS sector Telecommunication
More informationCIMIC Group. Earnings and target price revision. No change. Price catalyst. Catalyst: Q1 earnings 13 April. Action and recommendation
AUSTRALIA CIM AU Price (at 05:10, 31 Mar 2017 GMT) Outperform A$35.93 Valuation A$ 42.69 - DCF (WACC 8.5%, beta 1.4, ERP 5.0%, RFR 3.3%, TGR 2.0%) 12-month target A$ 42.50 12-month TSR % +22.0 Volatility
More informationRamsay Health Care (RHC AU) RHC UK on the mend?
17 October 2018 Australia EQUITIES RHC AU Price (at 05:48, 17 Oct 2018 GMT) Outperform A$54.18 Valuation A$ 68.50 - DCF (WACC 7.4%, beta 0.9, ERP 5.0%, RFR 3.7%, TGR 3.7%) 12-month target A$ 68.50 12-month
More informationGeneration Healthcare REIT All about spread Event
AUSTRALIA GHC AU Price (at 04:51, 14 Feb 2015 GMT) Neutral A$1.60 Valuation - Sum of Parts A$ 1.18-1.26 12-month target A$ 1.59 12-month TSR % +5.1 Volatility Index Low GICS sector Real Estate Market cap
More informationKiwi Property Group. Land banking for the future NZ$1.43 NEW ZEALAND. Event. Impact. Earnings and target price revision.
NEW ZEALAND KPG NZ Price (at 08:19, 07 Apr 2017 GMT) Outperform NZ$1.43 Valuation NZ$ 1.53 - DCF (WACC 6.9%, beta 0.6, ERP 7.0%, RFR 3.5%, TGR 2.0%) 12-month target NZ$ 1.53 12-month TSR % +11.8 Volatility
More informationOrigin Energy & Santos S&P moving the goal posts
AUSTRALIA Origin Energy funding picture Source: Macquarie Research, November 2012 Santos funding picture Source: Macquarie Research, November 2012 6 November 2012 Macquarie Securities (Australia) Limited
More informationEarnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA TLS AU Price (at 13:07, 19 Apr 2012 GMT) Outperform A$3.39 Volatility index Low 12-month target A$ 3.55 12-month TSR % +13.0 Valuation A$ - DCF (WACC 9.6%, beta 0.9, ERP 6.0%, TGR 1.0%) 3.55
More informationOz Minerals. Raises copper production outlook A$9.08 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst
AUSTRALIA OZL AU Price (at 7:28, 3 Jan 27 GMT) Neutral A$9.8 Valuation A$ - DCF (WACC 9.%, beta.4, ERP 5.%, RFR 3.3%) 8.48 2-month target A$ 9.3 2-month TSR % +4.6 Volatility Index High GICS sector Materials
More informationGenesis Energy. A 9% FCF yield and you call underperform? NZ$1.71 NEW ZEALAND. Event. Impact. Earnings and target price revision.
NEW ZEALAND GNE NZ Price (at 06:49, 29 Jul 2015 GMT) Underperform NZ$1.71 Valuation NZ$ 1.60 - DCF (WACC 8.0%, beta 0.6, ERP 7.0%, RFR 3.5%, TGR 2.1%) 12-month target NZ$ 1.65 12-month TSR % +6.1 Volatility
More informationAsaleo Care. NZ$ pulped. We review the outlook for Asaleo. Earnings and target price revision. Price catalyst. Catalyst: CY15 results.
AUSTRALIA AHY AU Price (at 06:10, 16 Jul 2015 GMT) Outperform A$1.80 Valuation - EV/EBITA A$ 1.90-2.00 12-month target A$ 2.00 12-month TSR % +16.8 Volatility Index Low GICS sector Household & Personal
More informationSilver Lake Resources
AUSTRALIA SLR AU Price (at 12:42, 27 Jan 215 GMT) Neutral A$.25 Valuation - DCF (WACC 1.%) A$.23 12-month target A$.23 12-month TSR % -8. Volatility Index Very High GICS sector Materials Market cap A$m
More informationAustralian Mid-cap Iron-Ore
AUSTRALIA Recommendation changes None BC Iron Outperform Price $0.23 Market Cap A$45m Target Price $0.35 TSR 52% Mt Gibson Iron Neutral Price $0.18 Market Cap A$196m Target Price $0.25 TSR 39% Grange Resources
More informationAdelaide Brighton. Overcoming headwinds A$5.45 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation
AUSTRALIA ABC AU Price (at 09:22, 23 Feb 2017 GMT) Outperform A$5.45 Valuation A$ 6.40 - DCF (WACC 7.8%, beta 1.2, ERP 5.0%, RFR 3.3%, TGR 2.0%) 12-month target A$ 6.30 12-month TSR % +2 Volatility Index
More information