Worries 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.
Read MoreSeveral positives suggest recession is unlikely: the current account deficit has collapsed; the $A helps stabilise the economy; the drag from falling mining investment is over; there is scope for extra fiscal stimulus; infrastructure spending is booming; there has been no sign of panic property selling; economic policy remains sensible; population growth remains strong; and the RBA can still do more.
Read MoreGiven the downside risks for the $A and that being short the $A is a good hedge against threats to the global outlook it still makes sense for Australian investors to maintain a decent exposure to foreign currency via un-hedged global investments.
Read MoreMy nine most important lessons from investing over the past 35 years are that: there is always a cycle; the crowd gets it wrong at extremes; what you pay for an investment matters a lot; getting markets right is not as easy as you think; investment markets don’t learn; compound interest applied to investments is like magic; it pays to be optimistic; keep it simple; and you need to know yourself to succeed at investing.
Read MoreThe RBA’s latest rate cut is aimed at heading off a further slowing in growth which would threaten higher unemployment and lower for longer inflation. For investors, it means low-interest rates for even longer.
Read MoreThe election outcome removed a key threat, but several other factors also suggest that property prices could be nearing a bottom. In this note, Shane Oliver looks at the key issues.
Read MoreAfter taking a back seat over the last six months as negotiations appeared to make progress the US/China trade war is back on with the President Trump – “tariff man” – ramping up tariffs on Chinese imports again and threatening more and China moving to retaliate. This note takes a simple Q & A approach to the key issues.
Read MoreSeasonal patterns have long been observed in equity markets. Yet, despite the potential they provide for astute investors to profit from them – and in so doing arbitrage them away – they seem to persist.
Read MoreSurprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates. But what’s driving low inflation? Is it really that bad? Why not just lower the inflation target? Will rate cuts help? And what does it mean for investors?
Read MoreLabor’s higher tax and regulation agenda may be a negative for Australian assets, but this could be partly offset in the short term by more targeted fiscal stimulus.
Read MoreThe 2019-20 Budget has a sensible focus on providing support to households at the same time as returning the budget to surplus. However, the actual fiscal stimulus is pretty modest – particularly for a pre-election budget – and comes with greater than normal uncertainty given the upcoming election.
Read MoreThe rebound in share markets since December has left them vulnerable to a short term pullback. Worries about global growth as evident in plunging bond yields and the flat/inverting US yield curve (and risks around trade) could provide the trigger.
Read MoreGrowing support for higher taxes on the rich and greater government intervention in the economy suggest median voters have shifted to the left. Support for economic rationalist policies has fallen.
Read MoreAustralian growth slowed even more in the December quarter. Growth may bounce back a bit this year, but the housing downturn will likely constrain it to around 2- 2.5%.
Read MoreDividends are great for investors. They augur well for earnings growth, provide a degree of security in uncertain times, are likely to comprise a relatively high proportion of returns going forward and provide a relatively stable source of income.
Read MoreFive key global charts to watch as to whether this will be the case are: global business conditions PMIs; global inflation; the US yield curve; the US dollar; and global trade growth.
Read MoreThese five great charts focus on critical aspects of investing: the power of compound interest; the investment cycle; the roller coaster of investor emotion; the wall of worry; & time is on your side when investing.
Read MoreA sharp slowdown in China would be a double whammy for the Australian economy coming at the same time as the housing downturn. But while it’s a risk it’s not our base case. Rather our outlook for China’s economy to stabilise and growth to pick up a bit in the second half implies a reasonable – but not spectacular – outlook for commodity prices
Read MoreA Q&A on the Australian housing downturn: what’s driving home prices down; how far will they fall; what’s the impact on the economy.
Read MoreDespite continued volatility, 2019 is likely to be better for diversified investors than 2018 was. Watch the US trade war, the Fed, global business conditions indicators, Chinese growth, politics and the Sydney and Melbourne property markets.
Read MoreA more cautious Fed should provide some support for markets although more falls are possible into early next year before markets bottom and head higher as investors realise the US/global economy is not going into recession soon.
Read MoreAustralian growth has slowed again and while local shares are still great for income, global shares are likely to remain outperformers for capital growth in 2019.
Read MoreAfter the turmoil of 2018, the outlook for 2019 comes with greater than normal uncertainty. Here are the main things to keep an eye on in the year ahead.
Read MoreGetting your personal finances right can be a challenge. Here are 13 tips that may be of use.
Read MoreIt’s still too early to be sure that last month’s pullback in shares is over but we remain of the view that it was not the start of a deep bear market and that the trend in shares remains up.
Read MoreDeveloped market shares are not dirt cheap (and haven’t been for several years) but on most measures they are not at overvalued extremes. US shares are most at risk, but other markets are reasonable.
Read MorePrices are likely to perform a lot better in Adelaide, Brisbane, Canberra & Hobart as they have not seen anything like the boom in Sydney & Melbourne.
Read MoreShares may still have more downside, but we are of the view that it’s just another correction.
Read MoreA surge in financial information and opinion combined with our inclination to focus on negative news risks making us worse investors: more fearful, more jittery, more reactive, less reflective & more short term. This is potentially harmful to our long-term financial health.
Read MoreFive key global charts to watch in getting a handle on whether a major downturn is on the way are: global business conditions PMIs; global inflation; the US yield curve; the US dollar; and global trade growth.
Read MoreThe key lessons for investors from the Global Financial Crisis (GFC) are that: there is always a cycle; while each cycle is different, markets are pushed to extremes of valuation and sentiment; high returns come with higher risk; be sceptical of financial engineering or hard-to-understand products; avoid too much gearing or gearing of the wrong sort; the importance of proper diversification; and the importance of asset allocation.
Read MoreWhile recession remains very unlikely, the combination of a slowing housing cycle, constraints on consumer spending and still subdued business investment will likely see growth slow going forward to around 2.5-3%.
Read MoreThe key for investors is to have realistic return expectations; allow that inflation is also low so real returns aren’t down as much; and focus on assets with decent and sustainable income.
Read MoreThis note looks at outlook for the $A and why it makes sense for Australian-based investors to hold a decent exposure to foreign exchange.
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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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