Shares are vulnerable to a short-term consolidation or pullback. But if we are right, and April was the low in economic conditions, then shares are likely to be higher on a 6 to 12-month horizon.
Read MoreShane Oliver takes a look at the medium to longer-term implications from the coronavirus shock of relevance to investors. Some of these will constrain economic growth but the faster embrace of technology is positive for growth.
Read MoreThis note looks at our own projections for the budget deficit, the impact on Australia’s net public debt and whether it’s affordable.
Read MoreThree things suggest Australia looks likely to come through this period of global misery relatively well compared to many other countries.
Read MoreAs we’ve seen recently growth assets like shares have periods of bad short-term performance versus bonds & cash. But they provide superior long-term returns which is essential to grow retirement savings. It makes sense for superannuation to have a high exposure to them.
Read MoreThe blanket coverage of coronavirus and its impact on the economy can lead to a lot of confusion right now. Some reports are hopeful of anti-viral drugs, others say a vaccine is at least a year away. There is talk of curve flattening but still rising cases and deaths. There is news of an easing in lockdowns but also worries about “second waves”. All this against a backdrop of collapsing economic data and surging unemployment.
Read MoreThis note looks at what QE is and how it entails printing money, why it’s being used and what the risks are.
Read MoreShane Oliver provides some insight as to what investors should look for in terms of when we can expect a bottom or be at least somewhat confident that the bottom has been reached.
Read MoreAlong with the horrible human consequences, the coronavirus pandemic is having a huge impact on the way we live and as a result investment markets. Shane Oliver provides a simple Q&A for most of the main issues from an economic & investment perspective. To the extent simple answers are possible in this environment!
Read MoreThe bottom line is that while we may see the biggest hit to global and Australian GDP since the 1930s thanks to the shutdowns, there are big differences compared to the Depression suggesting that a long drawn out global downturn is not inevitable.
Read MoreThe coronavirus pandemic & associated shutdowns to economic activity now poses a significant threat to the outlook for property prices. The question is how big the threat is?
Read MoreWhile we haven’t seen a pandemic driven bear market before the basic principles of investing have not changed. Shane Oliver revisits five charts particularly useful in times of stress.
Read MoreGiven the extreme uncertainty in all of this Shane Oliver looks at various scenarios in relation to global and Australian economic growth and what signposts to look at in relation to how it may unfold.
Read MoreSharp market falls with headlines screaming that billions of dollars have been wiped off the share market are stressful for investors. The current situation is doubly stressful because of fears for our own and others’ health – particularly for the elderly. However, several things are worth bearing in mind.
Read MoreThe hit to economic activity is deepening & the risks around Covid-19 becoming a pandemic have risen leaving shares vulnerable to more near term falls. The key for most investors though is to recognise that periodic share market falls are inevitable & hard to time & so it’s best to take a long-term approach to investing.
Read MoreWith inflation low, and as long as recession is not imminent, it makes sense that traditional valuations like PEs are higher than their long-term average. Similarly, it makes sense that property yields are lower than normal, but the fall in Australian housing yields has been extreme relative to commercial property & shares.
Read MoreOur natural inclination to zoom in on negative news combined with a massive ramp-up in the availability of information is arguably making us worse investors: more fearful, more jittery, more short-term.
Read MoreThe China coronavirus outbreak has led to concerns of a global pandemic triggering an economic downturn. Our base case is that the outbreak will be contained allowing share markets and bond yields to rebound.
Read MoreOur high-level investment view for this year is that a combination of improving global growth-boosting profits and still easy monetary conditions will help drive reasonable investment returns, albeit more modest than the very strong gains of 2019. This note revisits five charts we see as critical to the outlook.
Read MoreDespite ongoing bouts of volatility, 2020 is likely to provide solid returns, albeit slower than seen in 2019. Watch US trade wars, the US election, the US/Iran conflict, global business conditions indicators, and monetary versus fiscal stimulus in Australia.
Read MoreThe bushfires are expected to result in around a 0.4% hit to GDP mainly in the March quarter followed by a rebuilding boost. The drag on economic activity has increased the pressure for more monetary and fiscal stimulus.
Read More2020 is likely to see global growth pick up with monetary policy remaining easy. Expect the RBA to cut the cash rate to 0.25% and to undertake quantitative easing.
Read MoreThere is good reason to believe we may be close to the low in the $A (or have already seen it): it has already had a large fall; it is just below fair value; the global economic cycle is likely to turn up next year; sentiment towards the $A is very negative; and the current account is in surplus.
Read MoreWhile growth assets like shares go through bouts of short-term underperformance versus bonds & cash, they provide superior long-term returns. It makes sense that superannuation has a high exposure to them.
Read MoreThere is no denying concerns about global debt, seemingly never-ending QE, more debt trading on negative interest rates, inequality & geopolitical threats. However, some of these concerns are exaggerated and there are five reasons why I am not so fussed about the global outlook.
Read MoreThe world of investing can be confusing and scary at times. But fortunately, the basics of investing are timeless and some investors (often the best) have a knack of encapsulating these in a sentence or two that is insightful and easy to understand. In recent years I’ve written several insights highlighting investment quotes I find particularly useful. Here are some more.
Read MoreThese five great charts help illuminate key aspects of investing for income (or cash flow): there are alternatives to bank deposits for income; the gap between yields on different assets provides a guide to relative value; shares can provide stronger growth in income with less volatility than bank deposits; a high and sustainable income yield from an investment provides security; and yield is a guide to future returns.
Read MoreA per capita recession on its own is not the same as a real recession, and the three seen over the last 28 years do not compare to the recessions of the early 1980s and early 1990s in terms of their impact on jobs, economic welfare and confidence.
Read MoreThe ongoing slide in investment yields across major asset classes points to a more constrained medium-term return outlook. For a diversified mix of assets, this has now fallen to around 5.6% pa on our projections.
Read MoreThe choke point for global growth from higher oil prices is normally a doubling in prices. We are a long way from that but key to watch will be how long the supply disruption lasts and whether there are more attacks from Saudi Arabia or the US.
Read MoreThe combination of rate cuts, the election and a modest regulatory relaxation have helped turn property prices back up, but the upswing is likely to be constrained.
Read MoreHowever, while the risks have gone up, recession remains unlikely: tax cuts should help growth in the current half year; the threat from falling property prices has receded; infrastructure spending is booming; the low $A is helping growth; the drag from falling mining investment is over; the current account is in surplus; there is scope for extra fiscal stimulus; population growth remains strong; and cyclical spending is low.
Read MoreUnconventional monetary policy measures could help the economy, but negative interest rates are unlikely and quantitative easing would be most effective and fairest if combined with fiscal stimulus.
Read MoreWorries about the US trade wars and global growth are continuing to cause volatility in investment markets. While the risks have increased, we remain of the view that recession is unlikely.
Read MoreShare markets may need to fall further in the short term to remind both sides of the need for a deal and get them talking again. However, we regard the fall in share markets as another correction rather than the start of a major bear market.
Read MoreWe expect another one or two 0.25% cuts with the next in September but with US recession unlikely this rate-cutting cycle is likely to be limited. Fed and global monetary easing generally should help boost global growth into next year.
Read MoreWhile the Australian share market is at risk of a short-term pullback it’s likely to be higher on a 6-12 month horizon and its period of relative underperformance compared to global shares is likely at or close to an end.
Read MoreWhile the yield curve is flashing warning signs and issues around trade and Iran could cause short-term volatility, the excesses that normally precede US recessions – a spending boom, surging private debt and/or rising inflation/tight monetary policy – are absent.
Read More2018-19 saw solid returns for diversified investors, helped by a sharp rise in share markets in the last six months & solid returns from most assets, except cash.
Read MoreWhile the risks are higher this time around, my inclination is still to see the current period as just another global growth scare like those in 2011-12 and 2015-16 which will give way to somewhat stronger growth globally and higher share markets on a six to 12 month view.
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DOWNLOAD RESEARCH REPORTSecures binding contract with Tier-1 OEMUS based anode active project gathers momentumMagnis Energy Technologies (MNS.ASX) – MNS is planning an anode active facility in the US and recently announced a binding, yet conditional, contract for the supply of anode active with Tesla. The contract is for a minimum 17.5kt/year with an option to purchase another 17.5t/year. Conditions precedent carry a tight development timeframe, with first production scheduled for February 2025. Site selection is underway and co-locating with an OEM on a brownfields site makes sense. Long lead items have been ordered and detailed engineering and design is expected to commence soon. |
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December Quarterly Report: Q2 FY2023Looking past the rain – there’s a rainbow.TerraCom released their operating results for the December quarter FY2023 with operating metrics being in line with our forecasts. Unseasonal rains in both Australia and South Africa contributed to operational and logistical issues across all mines, however guidance for annual production at Blair Athol is unaffected and highlights the quality of TerraCom’s skills in operational management. We continue to like the stable operating metrics around the company’s Australian operations and see potential for the South African operations to benefit from increased management focus given the rationalisation of operations following the closure of the Ubuntu mine. Corporate Connects overall financials remain unchanged as does our target price of $1.35 share. We maintain our forecast for a fully franked quarterly dividend of 7.5c/share to be paid in the March and June quarters of FY2023. |
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DOWNLOAD RESEARCH REPORTHigh performance synthetic anode & cathode materials Building a US based materials supply chainNOVONIX (ASX:NVX) – is scaling a synthetic anode materials plant in the US and piloting nickel rich cathode material in Canada. Why? China is dominant and growing – 100% of global natural anode and 68% of synthetic anode is refined in China. In short, China controls the global midstream battery chain by controlling 60% of chemical refining, 87% of anode manufacturing, 61% of cathode manufacturing and 73% of battery manufacturing. It is global battery supply and price domination at scale. |
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DOWNLOAD RESEARCH REPORTAntisense Therapeutics (ANP) Taking a Quick Approach to Long COVIDThis report looks at the results of a collaborative study Antisense undertook which looked at the largest protein expression database in Long COVID-19 patients who experienced neurologic symptoms well after the primary or acute SARS-CoV-2 infection was considered over (Groups 1 & 2, with 48 subjects Group 2 comprising a single patient from a different clinical site). The symptoms and others experienced by such patients result in a highly significant amount of illness, possibly more than all primary SARS-CoV-2 infections i.e COVID-19. |
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DOWNLOAD RESEARCH REPORT4Q reveals more focus on profit and cash flow• LBY’s 4Q FY22 quarterly activities update showed continued solid growth in top line metrics, albeit slowing, with GMV of NZ$203m (+26% on pcp) and income of NZ$12.1m (+23% on pcp).
• Net Transaction Margin (NTM) disappointed at -0.5%, due to further increase in credit losses from 4.0% to 4.9% of GMV. However, new fraud and credit risk management tools have seen losses recover materially with NTM back to 1.2% in March and LBY is confident of further recovery in coming months.
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DOWNLOAD RESEARCH REPORTSigns MOU with Ford Company – Kachi is now sold out!Lake Resources (LKE. ASX) – LKE has signed two non-binding MOU’s in the space of 10 days. Ford Company (Ford) has signed an MOU for ~25,000t/year and last week Hanwa, a Japanese commodity trader signed a MOU for up to 25,000t/year. Subject to execution, this is an amazing feat as Ford and Hanwa are prepared to enter into longer-term strategic partnerships with LKE. Commercial negotiations are still ongoing but are expected, especially if Ford & Hanwa inject new equity into LKE, to further de-risk the project financing & thus ensure LKE and Kachi are fully funded. |
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DOWNLOAD RESEARCH REPORTStrategic Vanadium-battery growth with Titanium & Iron earnings resiliencyTNG Ltd is an ASX-listed technology owner and developer of the world-class Mount Peake near-surface vanadiferous titanomagnetite deposit. To unlock value, TNG will concentrate ore from its central Northern Territory mine for processing through its patented TIVAN® process produce three premium quality revenue streams: hi-purity vanadium pentoxide (V2O5) for steel alloys and Vanadium Redox Flow batteries, a quality titanium pigment for paints and a premium steel input with >64%Fe iron ore fines. |
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Promising exploration and development update while SOP prices continue to riseTwo recent gravity surveys have considerably exceeded expectations and revealed potential for extensions to the existing MRE at Lake Throssell, plus a material growth opportunity at Lake Yeo. This reinforces the potential for a multi-decade, Tier-1 SOP production hub based around Lake Throssell. TMG is currently completing work towards the PFS due early 2023, including drilling to start in Q3 2022, evaporation trials and permitting activities. Results from these programs will support the PFS and any future resource upgrade. Benchmark SOP prices have risen to ~US$940/t due to recent geopolitical developments. The Oct 2021 Scoping Study assumed a SOP price of US$550/t and contained a sensitivity analysis showing every 10% increase in price drives a +$144m increase in the project NPV of $364m. The c.70% increase above the Scoping Study thus implies a project NPV of ~$1.4bn. |
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DOWNLOAD RESEARCH REPORTIncreasing our TargetDespite the lower realised oil and gas price, which fell by 5.4% and 19.7% respectively in August, Calima managed to show improvement in its key business metrics. We expect higher production in November due to the contribution by the new Thorsby wells which will be drilled in August/September which will see Calima meet its 2021 production guidance of 4,500 boe/d. |
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DOWNLOAD RESEARCH REPORTEmerging Financial Wealth Advisory GroupWT Financial Group Limited (WTL) is a growing diversified financial services company, founded in 2010 and listed on the Australian Stock Exchange (ASX) in 2015. Its advice and product offerings are delivered primarily through a group of independent financial advisers operating as authorised representatives of WTL under its Wealth Today Pty Ltd (Wealth Today) and Sentry Group Pty Ltd (Sentry Group) dealer group operations. It has around 275 advisers across more than 200 financial advice practices Australia-wide. It also operates a direct-to-consumer operation under its Spring Financial Group brand. |
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DOWNLOAD RESEARCH REPORTImmutep Taking the Fight to CancerIn May 2021, Corporate Connect analyst Marc Sinatra published a comprehensive research report on ASX-listed biotech Immutep Ltd (ASX: IMM). So impressed was he with IMM that Corporate Connect felt it imperative that a follow-up report be released placing a valuation on the company, because the market was not seeing the vast potential of eftilagimod alpha (efti). This follow-up report has been released today. Using comparables, after adding cash back to their EV estimate and dividing by the total number of issued shares, Corporate Connect now places the fair value of an Immutep share at $A2.20. |
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DOWNLOAD RESEARCH REPORTMarket leading lifelong learning platform technology company in Australia and SE AsiaPayGroup (PYG) delivers multi-country BPO services and cloud SaaS HCM solutions, assisting companies to manage employees in multiple, complex jurisdictions. The company has many growth opportunities, including new clients, new jurisdictions, new products, partner expansion, and new revenue sources. PYG’s scalable business model allows operating leverage and with savings from in-housing third party technology, support margin expansion. |
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DOWNLOAD RESEARCH REPORTMarket leading lifelong learning platform technology company in Australia and SE AsiaOpenLearning (OLL) is a higher education technology company that operates a scalable online learning platform through a software-as-a-service (SaaS) business model and provides a global marketplace of high quality courses for learners of all levels. Its primary customers are education providers based in Australia and South-East Asia (primarily Malaysia). OLL started operations in Australia in 2012 and expanded to Malaysia in 2015, Singapore in 2018, and recently also Indonesia. |
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