Tag Archives: Energy

article 3 months old

The Monday Report

By Greg Peel

No Bottom Yet

The benign close on Bridge Street on Friday is not much worth analysing, given all that has transpired in the meantime. Suffice to say industrials and telcos posted 1% falls and the resource sectors lost 0.6%, but the banks were slightly positive and a bit of green elsewhere resulted in a close of down 8 points for the ASX200.

Of more significance is the reality that a bottom is clearly not yet nigh for crude oil prices, despite what appeared to be some bottom-picking activity last week. West Texas crude fell US$1.25 or 3.4% on Friday night to US$35.48/bbl, representing a seven-year low. Brent fell US$1.84 or 4.6% to US$37.90/bbl.

Renewed selling was triggered by a report from the International Energy Agency which downplayed any expectation for a recovery in oil prices in 2016. The IEA is pessimistic about any easing in global oversupply ahead of a ramp-up of Iranian production once sanctions are lifted. The Agency was particularly critical of OPEC, blaming the bloc’s “freewheeling” supply policy.

OPEC’s total output in November was 900,000 barrels per day more than the estimated demand rate for OPEC crude in 2016.

The oil price fall proved another kick in the teeth for Wall Street, which is struggling to put together any sort of traditional late-year rally. The US stock indices posted their biggest one day falls since August, led down by the energy sector. The Dow closed down 309 points or 1.8% while the S&P lost 1.9% to 2012 and the Nasdaq fell 2.2%.

But it was not just the price of oil, per se, which spooked Wall Street.

I have warned in this Report recently of the flow-on risk into the US financial sector of junior shale oil producer defaults and bankruptcies due to persistent low oil prices. Many an oil producer has funded costs through high-yield junk bond issues and the potential for default is putting a lot of pressure on the junk bond market.

So much pressure that the high-yield Third Avenue Focused Credit Fund announced on Friday night a freeze on investor redemptions. Third Avenue is concerned the rush to redeem would lead to a fire sale of the fund’s assets at destructive prices. The freeze will allow Third Avenue to liquidate the fund in an orderly fashion. It hopes.  

The last time frozen redemptions were front page news on Wall Street was in 2008. And it is not going to help junk bond markets that the Fed is expected to make its first rate hike this week.

Despite that expectation, the US ten-year Treasury yield fell 10 basis points on Friday night to 2.14% as investors rushed to withdraw their investments in high-risk, high-yield instruments and  transfer into safe haven government bonds. Heightened fear was also apparent in the VIX volatility index, which jumped 27% to 24.6, taking it into nervousness territory.

Trade War

And it was not just the price of oil, or junk bond issues, that spooked Wall Street on Friday night.

In the wake of the inclusion of the Chinese renminbi in the IMF’s basket of global reserve currencies, the PBoC announced on Friday it was planning to loosen the currency’s peg against the US dollar and instead switch to a peg to a basket of global currencies – potentially 12 to 13 in total. The central bank is yet to provide details on currency weightings, or just how the switch will come into effect.

But it was not lost on markets on Friday night that the move amounts to a further devaluation of the renminbi. The fear is that in trying to revive its flagging export sector, China is orchestrating a trade war. The peg announcement on Friday follows an announcement from Beijing earlier in the week that export taxes on steel, pig iron and other products would be reduced, potentially leading to further dumping of cheap steel on global markets.

What Beijing should really be doing is addressing China’s steel production overcapacity, and indeed overcapacity in the refining of a range of metals. But to do so too aggressively would bring about the sort of social backlash Beijing forever fears, given the implicit loss of jobs. Capacity reduction will thus be a very long process, one presumes.

The whole point of the ECB’s beefed up QE policy is to lower the euro to ensure Europe’s export-led economy can recover. Japanese QE has a similar goal. With the PBoC now becoming aggressive in its own currency devaluation attempts, one wonders just where the “race to the bottom” and subsequent trade war potential can end.

And all the while, the Fed is set to raise.

The impact of the PboC announcement on Friday was evident in moves on European stock markets on Friday night. A 2.2% fall in London is understandable given the weighting of energy stocks in the FTSE, and renewed oil price weakness. But oil weakness is good for energy-importing European countries, yet the German stock market fell 2.4% on Friday night and France 1.8%.

But on the other side of the coin, the world in general is desperate to see the Chinese economy stabilise. Beijing might be ready to fight a battle in export markets, but for other export economies, China is critical as a customer. This means everything from US iPhones to German heavy machinery, French wine and Australian iron ore.

In this front there was actually good news over the weekend. Beijing provided China’s November “data dump” on Saturday.

Industrial production rose to 6.2% year on year growth, beating forecasts of 5.7%. Retail sales posted the strongest reading of 2015 with a gain of 11.2%. And at 10.2%, year to date fixed asset investment also proved to be better than expected.

The numbers suggest Beijing’s many and various stimulus efforts over the year may finally be starting to gain some traction. This is good news, but in the context of all else that’s happening in China, and of falling oil prices, the impact will no doubt still be lost as markets enter the new week.

Other Commodities

Iron ore fell another US50c to US$37.00/t on Friday night.

The US dollar index fell 0.4% to 97.57 (the renminbi is not in the index basket) which should have provided some support for commodities, but clearly not for oil or iron ore. But there were at least some positive moves for base metals prices in London.

US-based Freeport-McMoRan is now among those global resource sector companies announcing planned production curtailments. While Beijing may be moving very slowly on addressing overcapacity in China, Chinese metal smelters are themselves taking a more active stance in addressing their own oversupply issues. There is thus a glimmer of optimism returning to beaten-down base metal markets.

On Friday night copper jumped 1.9% and nickel 1.7%, while lead rose 1.1% and zinc 0.8%. Only tin and aluminium remained subdued.

Gold was US$5.00 higher at US$1077.30/oz.

The Aussie dollar fell a full 1.4% to be at US$0.7188 on Saturday morning, thanks to oil and iron ore prices, but has rebounded somewhat this morning to US$0.7203 thanks to the positive Chinese data released over the weekend.

The SPI Overnight nevertheless closed down 73 points or 1.5% on Saturday morning.

The Week Ahead

It’s the big one on Wednesday night. You may have heard about it. The Fed will hold a policy meeting and provide quarterly forecast updates, and Janet Yellen will hold a quarterly press conference.

It is not expected that any US data release ahead of that meeting will affect the Fed’s decision. This week’s releases include the CPI, housing sentiment and the Empire State activity index on Tuesday, housing starts and industrial production along with the Fed statement on Wednesday, and leading economic indicators and the Philadelphia Fed activity index on Thursday.

Friday is the quarterly quadruple witching derivatives expiry in the US, which itself often provides for heightened volatility, and being so soon after the Fed decision one presumes this may well be the case.

Japan and the eurozone will release trade and industrial production data this week and both the ZEW and IFO surveys will be closely watched in Europe.

New Zealand will release its September quarter GDP result on Thursday.

Australian data releases are thin on the ground this week, other than house prices and vehicle sales tomorrow. Tomorrow also sees the release of the minutes of the RBA’s December meeting and the government will deliver the mid-year budget update. An RBA Bulletin will be released on Thursday.

On the local stock front there is a trickle of AGMs this week including those of both ANZ Bank ((ANZ)) and National Australia Bank ((NAB)) on Thursday.

The ASX sees its own form of “quadruple witching” expiry on Thursday, and on Friday the recently announced changes to S&P/ASX index constituents come into effect.

Rudi is now off on his annual break and thus will not be making any media appearances until the new year.


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article 3 months old

Material Matters: China, Aluminium, Steel, Commodity Signals And Australian Energy Stocks

-China's emphasis turns to living standards
-Aluminium supply reductions are happening
-Steel set for long period of oversupply
-US rates, dollar key signal for recovery
-MS stacks up Oz energy stocks
 

By Eva Brocklehurst

China

After touring major cities in China, UBS suspects a normalisation in commodity demand is even further away. Expectations for a sequential acceleration in infrastructure build up do not align with the insights the broker gained on the ground. Emphasis has shifted to quality of growth and living standards.

This presents a challenging outlook for commodity demand, the broker maintains. UBS prefers copper for its exposure to electrification, uranium longer term as nuclear building accelerates and aluminium as the light metal continues to capture market share. The outlook for Chinese coal demand appears grim.

Aluminium

Quiet may have settled on China's aluminium industry, with no news of any joint reductions to production at smelters but Macquarie believes otherwise. The broker suspects cuts are continuing but this is being done in an asset-by-asset manner and remains low profile.

Macquarie identifies 1.48m in production cuts from the smelters since mid October. The fast drop in aluminium prices from mid October has hurt those smelters at the higher end of the cost curve. The broker notes the divergence in smelter profitability could make the industry more difficult to assess in terms of co-ordinated production reductions compared with other metals.

The broker believes the decline in visible inventory has helped improve the market balance. Aluminium outperformed other base metals in November after the fall in October. Still, much of this related to a shift in fund selling into other funds, Macquarie suspects. The broker still expects a further cut to power tariffs in China. Power industry reform has the potential to lower costs for aluminium smelters and lead  to lower domestic prices in China.

Steel

Painful adjustments continue in the steel industry and Macquarie doubts a quick cure is nigh. Utilisation rates are set to remain below 80% in the foreseeable future. The broker suspects sustained price upside will require a number of events taking place, all of which appear improbable.

As a result, the broker downgrades steel price forecasts by 10-15% through to 2020. Despite prices being at a level which not only discourages new supply but also causes substantial capacity to exit the market, the unique factors in the steel equation mean the broker does not envisage demand will grow enough at any point. This means the volume of supply adjustment needs to be significantly larger.

Commodity Signals

Morgans believes the implications of the substantial re-structure announcement from the world's fourth largest miner, Anglo American, are dire, noting the intention to suspend dividends and close, mothball and sell any cash-negative asset.

The market remains fearful, the broker notes, regarding measures other miners may take to shore up their balance sheets. The signals required to build back confidence in commodity prices include specific near-term lifting in US interest rates and a topping out of US dollar strength in 2016 as well as an abatement in volatility and a relief rally in oil.

Positive signals already under way include reductions in capex and capacity. Key supply remains uneconomic for seaborne coal and large segments of global nickel and aluminium, the broker believes. The strain on marginal producers in LNG and iron ore is also increasing. The broker observes further production cuts are needed to bring these markets back to balance.

Australian Energy

Morgan Stanley expects an oil price recovery will occur towards the end of 2016. While not necessarily forecasting such, the broker highlights a sensitive point in the oil price at US$40/bbl and reviews what this would mean for Australian energy stocks if it held out for the next two years.

Obviously, it would significantly reduce earnings and dividends for the companies involved. Woodside Petroleum ((WPL)) would be loss making under this oil price and no dividends would be paid, in the broker's calculation, but the company would be cash-flow positive in FY17 once current spending on Wheatstone is completed.

Oil Search ((OSH)) would be slightly negative in cash flow, assuming such an oil price, amid due debt repayments but the broker observes it does have US$1.6bn in liquidity which could be used to manage a prolonged downturn. Dividends would be negligible.

Santos ((STO)) has a small number of debt maturities in 2016, with its major one being in 2017. At US$40/bbl there would be no earnings or dividends, in Morgan Stanley's estimates.

Origin Energy ((ORG)) which has a defensive income stream from power and energy retailing, but believes it can service its 20c dividend from these activities without cash flow from APLNG. After paying APLNG debt and interest, Morgan Stanley calculates the break-even on cash flow for Origin is US$38-42/bbl.
 

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article 3 months old

Weekly Broker Wrap: Aged Care, Consumer Electronics, Housing, Tourism And El Nino

-Short-term funding risk in aged care
-Dick Smith woes unlikely to spread
-House building firm despite affordability decline
-Bright outlook for tourism with AUD decline
-Extreme weather supporting electricity demand
 

By Eva Brocklehurst

Aged Care

Operating conditions appear sound in aged care, featuring high occupancy and rising bond inflows supported by a buoyant property market, in Deutsche Bank's observation. Still, funding reforms overshadow the sector. The broker believes the over-run relative to budget estimates makes it a priority for the government to address the issue.

Hence despite other attractive elements in the sector, the broker has downgraded Estia Health ((EHE)) and Regis Healthcare ((REG)) to Hold from Buy and Japara Healthcare ((JHC)) to Sell from Hold. The reflects adjustments to forecasts to allow for the impact of a freeze on aged care funding indexation from early 2016.

UBS also observes the short-term funding risk for residential aged care but suspects the impact on earnings will be contained to 2-3% at the bottom line. The broker believes if the government were to freeze indexation, currently at 1.3%, that would go some way towards addressing the gap. The government's Mid Year Economic and Fiscal Outlook (MYEFO) due next week may present a possible timetable for any changes.

Consumer Electronics

The efforts to clear excess inventory began in earnest late last week at Dick Smith ((DSH)). Deutsche Bank conducted a number of store visits to get some idea of what was being moved and the depth of discounting.

The majority of products were private label accessories, particularly under the MOVE brand. A large amount is aged with the majority of promotions on accessories to suit superseded hardware. The broker has also observed the depth of discounting is more aggressive in New Zealand.

UBS observes a difficult few months in store for Dick Smith but suspects the risks for the sector are overplayed. An irrational competitor with a 6.0% share does create a risk, nevertheless, and UBS suspects a 30 basis point impact to gross margins for JB Hi-Fi ((JBH)) and Harvey Norman ((HVN)), which would translate to a 3.0% and 1.0% negative impact on first half earnings respectively.

The issue highlights the strength of the JB Hi-Fi and Harvey Norman brands which suggests to UBS a significant opportunity exists over time to take market share from Dick Smith. The broker retains a Buy rating on Harvey Norman and upgrades JB Hi-Fi to Buy from Neutral.

Housing

Deutsche Bank expects growth in FY16 housing starts of around 6.0%, with NSW and Victoria being the drivers partly offset by weaker conditions in Western Australia. Investor finance now represents 73% of total loan values in Australia versus the historical average of 47%, the broker observes.

In contrast first home buyers represent 12%, down from the peak of 29% in October 2009 and from the historical average of 19%. The broker notes some investors may be first home buyers but this is difficult to quantify with certainty.

Nevertheless, home affordability remains below historical averages for all states except Western Australia and Queensland, although the broker does not believe this is at trough levels in any capital city. Housing is expected to remain robust over 2016, with no change to the official cash rate until December next year.

Beneficiaries of this robust environment, in the broker's view, include CSR ((CSR)), although aluminium is a detractor for the stock, Fletcher Building ((FBU)), given its exposure to robust markets in both New Zealand and Australia and Boral ((BLD)), in a strong position given 30% of its sales relate to Australia housing. Deutsche Bank retains Buy ratings on all three stocks.

Tourism

The Australian dollar depreciation has marked an end to cheap overseas holidays, UBS notes, with international travel prices at a record high. While the level of departures is still 25% above arrivals, net arrivals are the best since 2000, which provides some support to consumption, UBS observes. The broker expects, in a subdued economy tourism, at 6.0% of GDP, is likely to become a bright area in 2016.

UBS also expects the Australian dollar to fall to US68c in 2016 as the US Federal Reserve hikes rates and commodity prices remain soft. A lower Australian dollar is expected to underpin strong growth in tourist arrivals, supported by scheduled increase in international airline capacity of 8-10%.

El Nino

Morgan Stanley's El Nino update suggests, thus far, there is an impact on average electricity pool prices. Year-to-date average pool prices are higher in both NSW and Victoria. AGL Energy ((AGL)) is the most leveraged to pool prices, the broker notes.

That company has argued a structural rather than a cyclical view on prices, based on re-pricing of coal and gas supply contracts. Morgan Stanley, however, suspects a cyclical impact. Low rainfall has curtailed Tasmanian hydro production and hotter southern weather means lower demand-coincident wind production in South Australia.

Extreme weather tends to support electricity demand although, longer term, the analysts envisage declining demand and a dampening of prices amid new entrant renewables.
 

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article 3 months old

The Overnight Report: Respite

By Greg Peel

The Dow closed up 82 points or 0.5% while the S&P gained 0.2% to 2052 and the Nasdaq added 0.4%.

Good News is Bad News

Economists were bracing themselves yesterday for a weak local jobs report. Not because they believe Australia’s economy is in trouble and unemployment is mounting – indeed, quite the opposite – but simply because when last month’s report suggested 56,100 new jobs were added, they all fell about in hysterics.

As if!

While suspicion has been mounting for some time that the ABS dart board had well and truly fallen off its hook, economists were at least prepared to be polite last month and suggest the October result probably was a case of statistical noise. The series is volatile, they acknowledged, and hence the November numbers would probably see a correction back to a more realistic result, while maintaining an underlying positive trend.

Yesterday’s number suggested 71,400 new jobs added.

This time there were just looks of exasperation. Struggling to remain polite, CBA’s economists summed up the mood in saying “There will be many doubters”. Still, various other employment indicators have been quite positive, CBA admits, such as the ANZ job ads series, and the underlying trend is a more believable 25,000 new jobs per month.

The November result, fantasy or not, was not well received by the stock market yesterday. In a week dominated by ever-falling commodity prices, for once it was not the resource sectors that led the index down. Energy fell 0.4% but materials was up 0.7%, while the banks fell 1.5%, the telco 1.1% and utilities 0.8%. If the October jobs report suggested the possibility the RBA would not be cutting its cash rate any further, the November report has killed off any thought of another cut altogether. As the Fed prepares to raise, goodbye yield.

The ASX200 was down around 40 points in the morning yesterday on further commodity price and Wall Street weakness, and when the jobs number came out, fell another 40. That took us, for about the umpteenth time this year, back down through 5000. Then the technical trade came into play, and late buyers pushed the index back to a more respectable loss of 42 points on the day, well clear of the 5000 mark.

Forex traders have given up all hope of another RBA cut, as is evident in a 0.9% rally in the Aussie to US$0.7291 despite the US dollar index being up 0.6% at 97.93, but they could well change their minds again tomorrow.

Love That Bottom

WTI crude fell again last night, by another 1.7%, and now Brent has joined the sub-40 club. Crude prices themselves have thus yet not quite bottomed but Wall Street clearly believes a bottom is in sight. For the second session in a row, energy stocks were most sought after. The S&P energy sector rose 1.2% last night following Wednesday night’s 1.3% gain, and after four down-days in a row, Wall Street finally managed a rally all round.

Despite those four down-days, Wall Street’s bounce off the September lows has meant the 50-day moving average on the S&P500 is now very close to crossing over the 200-day, which is called a “Golden Cross” and signals peace, love, harmony and bullishness for all evermore thereafter.

It’s all a complete load of crap of course, but some people do like to hold onto to these little fantasies. Don’t they Santa?

The Golden Cross will be triggered, it is assumed, next week when the Fed announces a rate hike and Wall Street takes off. Tonight sees the release of PPI and retail sales data, and next week sees CPI and housing sentiment ahead of the Fed meeting, but the market is convinced the Fed has already made its decision. As to being convinced the market will then rally is another matter, because everyone is assuming that will be the case.

Indeed, the Dow was actually up 200 points around 3pm before fading quickly away at the close.

Commodities

West Texas crude is down US64c to US$36.73/bbl and Brent is down US64c to US$39.74/bbl.

The pickers were out in the local materials sector yesterday, it would seem by the aforementioned 0.7% rally against the general index trend. But iron ore is down another US80c overnight to US$37.50/t.

Aluminium producer China Hongqiao yesterday announced the immediate curtailment of 250,000t of production, but still couldn’t manage to ignite the aluminium price on the LME, which closed flat. All base metals closed flat except for nickel which fell 1.5%. It seems in the run-up to year-end, nothing is going to excite world weary metals traders at the moment. We can only hope China Hongqiao’s capitulation is a sign of more to come from China.

The rally in the US dollar helped gold down US$4.50 to US$1072.30/oz.

Today

Despite a rally on Wall Street, the SPI Overnight closed down 11 points or 0.2%.

US November retail sales data will be the hot topic of conversation tonight, given the numbers will account for the Thanksgiving weekend shopping spree. The PPI and consumer sentiment numbers are also due.

Tomorrow brings China’s data dump for November, featuring industrial production, retail sales and fixed asset investment numbers.

Westpac ((WBC)) will hold its AGM today.
 

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article 3 months old

Relief As Woodside Pulls Out

-PNG govt rejection likely final straw
-Where will Woodside find growth?
-Macquarie, MS buoyed by PNG prospects
 

By Eva Brocklehurst

Confirmation of what many expected has occurred. Woodside Petroleum ((WPL)) has formally abandoned its pursuit of Oil Search ((OSH)).

Most brokers are relieved because Woodside was considered a careful manager of its capital and making a play for Oil Search was a major risk, even with the prospect's value damped down by a weak oil price. Any raising of the bid price would have been value destructive, in Credit Suisse's view.

The Oil Search board rejected the bid out of hand back when it was launched in September and the intervening period has seen analysts attempting to fathom the ifs, whys and maybes of such a deal progressing. Any raising of the bid price would have been value destructive, in Credit Suisse's view.

The final straw seems to have been cast by the PNG government, which appears not at all keen to pass up its 10% stake in Oil Search for what is perceived as a low-value offer. So, Woodside has walked. The company has confirmed it is not pursuing any alternative transactions to combine the businesses.

Deutsche Bank is not surprised, not being able to envisage a situation whereby the PNG government supported a takeover unless there was sufficient uplift on its $8.20/share investment. As a result Deutsche Bank lowers its target for Oil Search to $8.25 from $9.25 and maintains a Buy rating.

The proposal would have entailed Oil Search shareholders receiving one Woodside share for every four Oil Search shares they held, an offer which the board said grossly undervalued the company.

Woodside's CEO, Peter Coleman,suggested more than a month ago the proposal was already fully priced and a cash component would not be added and brokers suspected after that comment there was little prospect of a successful merger.

There was merit in combining the two, UBS contends, with Woodside's strong cash generation and Oil Search’s growth portfolio. Yet, the risk appetite of both companies and their major shareholders did not appear to converge. The broker envisages Woodside is the more stable and lower risk entity with a high pay-out ratio, attractive to value investors. Oil Search is higher risk but has high-margin growth projects.

Now this opportunity has been shelved, UBS questions what will occur with Woodside's Browse FLNG. As the oil price continues to trend lower more acquisition opportunities may develop and the market is expected to feature further speculation regarding Woodside's M&A capability, the broker suspects. UBS notes Wheatstone is fully priced at current oil prices while the company has now failed to acquire a position in Leviathan or acquire Oil Search.

Citi has chosen Woodside's departure to upgrade to Buy from Neutral on the stock, also upgrading Oil Search to Neutral from Sell. Credit Suisse recently decided to downgrade both Woodside and Oil Search to Neutral from Outperform, citing few positive catalysts for the latter from any growth assets on the horizon. The broker found this a hard call to make for Oil Search but concluded that while it is the highest quality offering in the sector in terms of producing and growth assets, the valuation no longer stacked up.

On the other hand, both Macquarie and Morgan Stanley returned more confident from a tour of Oil Search's PNG assets. Macquarie expects further production enhancements and progress with growth projects will underpin long-term value and retains an Outperform rating.

Morgan Stanley, too, believes the company’s operations were adding value to the base PNG LNG business but, as the development is long-dated, has an Equal-weight rating on the stock.

The database has three Buy and five Hold ratings for Oil Search. The consensus target is $8.00, signalling 26% upside to the last share price. Woodside has one Buy, six Hold and one Sell, with a consensus target of $31.45, suggesting 16.4% upside to the last share price. Woodside's dividend yield on 2015 and 2016 estimates is 5.4% and 4.6% respectively.

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article 3 months old

The Overnight Report: Not This Time

By Greg Peel

The Dow closed down 75 points or 0.4% while the S&P lost 0.8% to 2047 as the Nasdaq lost 1.5%.

Nice Bottom?

I suggested yesterday that perhaps the time was nigh for some bottom-picking in resource sector stocks, particularly in energy, given what appeared to be quite the capitulation trade in oil markets on Tuesday night. As it turned out, only three sectors finished in the green yesterday within a 0.5% fall in the index. One was utilities, up, 0.3%, while materials rose 0.1% and energy rose 0.4%.

But it appears someone had a red hot go at index bottom-picking in general at 11am yesterday. Having opened down 40 points and plateaued, the ASX200 suddenly shot back up to the flat line in a blink. It then began a slow drift down in the afternoon.

Momentum was probably deflated by yesterday’s local data releases.

Consumer confidence fell by 0.9% in Westpac’s December survey. That’s not really what retailers want to hear before Christmas. The two consumer sectors finished down 0.6% yesterday. However, the index remains on the optimistic side of the ledger, at 100.8, and is up from this time last year.

The fall in the index is mostly due to a lack of confidence in the economy going forward, out to five years, rather than right now, which remains fairly buoyant. There is thus no need to fear the Grinch. Household goods retailers, who have had a cracking couple of years, need also not cry into their egg nog, based on yesterday’s housing finance numbers.

The value of all housing loans fell 6.0% in October to slow to an annual pace of growth of 8.4%. Efforts by the regulator to cool runaway investment loans has clearly worked, given loans to investors fell by 6.1% and are now slowing at an annual rate of minus 9.2%. But, repricing of mortgage rates has not completely deterred owner-occupier borrowers, as o-o loans rose 0.1% to maintain a healthy growth rate of 21.1%.

Given it is the owner-occupiers and not the investors who will be buying all the furniture, spending on household goods should remain supported for now, and clearly there’s a lag effect. But builders and building materials providers will not be too thrilled that the investment housing boom has clearly now run its course. Industrials were the worst performer yesterday, down 0.9%. Falling loan numbers in general are not encouraging for the banks, which were down 0.8%, although the metrics of NAB’s UK demerger has not been met with great enthusiasm either.

Yesterday also saw the release of Chinese inflation data for November. A rise to 1.5% annual for the CPI, up from 1.3% in October, suggests Beijing’s stimulus measures might finally be having some effect. But industrial overcapacity remains rampant, as indicated by a 5.9% annualised fall in the PPI. That’s unchanged since October at least, but represents the 45th consecutive month of declines.

Too Soon?

The bottom-pickers were indeed poised for action on oil markets last night. When weekly US crude inventory data showed an unexpected drop in stocks, WTI shot up to US$39/bbl. Given the US oil and stock markets are currently attached at the hip, the Dow shot up 200 points as a result.

But then reality interfered.

Corresponding heating oil inventory data showed an unexpected rise, even as the US heads into winter. And while crude inventory levels may have fallen in one week, there’s no getting past the fact they are still as high as they have been in 80 years of data. The rapid WTI bounce quickly ran out of steam, reversing to a slight fall in price on the session.

The Dow subsequently closed down 75 points. It was not the day.

Commodities

West Texas crude is down US20c at US$37.37/bbl, while Brent has managed a slight gain of US17c to US$40.38/bbl.

Global divergence was apparent in a 1.1% fall for the US dollar index to 97.35 as the euro rallied. Weak oil prices are bad for the US market, but good for a European market that imports all its energy. The irony is that it is the US about to raise interest rates, while eurozone has just cut. But the fall in the greenback provided little support for commodity prices.

Base metal prices were all slightly higher last night, other than nickel which was flat, but no metal managed a 1% gain.

If we’re on the lookout for bottoms, there no sign of such yet in iron ore. It’s down another US50c at US$38.30/t.

Gold has managed to gain US$3.00 to US$1076.80/oz, while the Aussie is up 0.3% to US$0.7229.

Today

The SPI Overnight closed down 23 points or 0.5%.

Australia’s November jobs numbers are out today. Always good for a giggle.

Market darling CSL ((CSL)) will hold its annual R&D day today.

Rudi will make his final TV appearance for 2015 today at noon, on Sky Business' Lunch Money.
 

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article 3 months old

The Overnight Report: All About The Oil

By Greg Peel

The Dow closed down 162 points or 0.9% while the S&P lost 0.7% to 2063 and the Nasdaq fell 0.1%.

Capitulation?

In depth analysis is not required to figure out why the ASX200 closed down 0.9% yesterday. Energy was down 6.4% and materials 3.4%, as both benchmark prices for oil and iron ore are now under the psychological US$40 mark. All other sectors traded off gains and losses of around a half a percent.

The big fall in the energy sector was compounded by Woodside Petroleum’s ((WPL)) announced withdrawal of its bid for Oil Search ((OSH)), thus removing a takeover premium from the Oil Search price. To explain the big fall in BHP Billiton ((BHP)), again, one must remember that while BHP is mostly thought of as an iron ore producer, it also has a large energy division.

The unfortunate reality for the market in general is that while recent falls can be squarely blamed on the resources sectors, as opposed to market-wide concerns, a lot of technical damage is being inflicted on the index. The 5100 level is considered support which, if breached, suggests another move down towards 4900. However, if investors can take anything away from the performance of Australian stocks in 2015, it is that index-tracking has been a disastrous strategy this year. Stock-picking has ruled, particularly outside of the large caps, with only one or two exceptions (CSL comes to mind).

It was probably never going to make much difference what China’s November trade numbers, released yesterday, looked like. It was not a day to be brave when playing the resources. Weak numbers would have been met with a “Yeah, well there you go,” and strong numbers would have been trampled in the stampede anyway.

As it was, the numbers offered a balance of sorts. They were weak, but not as weak as expected. Exports fell 3.7% year on year in November compared to 3.6% in October, but that was not as bad as expected, and imports fell only 5.6% following a 16.0% fall in October. Forecasts had suggested another double digit fall.

It is interesting to note the impact of China’s August currency devaluation. In USD terms, exports fell 6.8%, better than 6.9% a month ago, and imports fell 8.7%, better than the previous 18.8%. The numbers look worse in dollars, but is there a trend of stability emerging?

That’s a big question for 2016. Meanwhile, more immediately, have we seen the bottom for oil and iron ore prices? Monday night’s 6% trashing of oil had a hint of capitulation trade about it. Iron ore’s decline has been rather more orderly, so it is difficult to tell when that might stop. Iron ore is also beholden to Beijing’s efforts to reduce excess steel capacity – a slow process – while Beijing has no control over oil markets. That’s all down to US shale producers and OPEC.

Overnight WTI initially fell again, but found some support under the US$37/bbl level before closing only slightly lower on the session. It would be a brave trader who would suggest we’ve definitely now seen a bottom, and bottom-pickers who moved in too soon mid-year have been taken out on stretchers. But with all the talk of which US oil companies are now set to go to the wall, implying reduced supply, it may be time to look at those companies that can survive and maintain dividends. If you are stout of heart, that is. At least, that’s the call from some stout-of-heart US fund managers right now.

Wider Implications

WTI crude fell initially in last night’s session by about another dollar before finding support and rallying to be up slightly. It is currently down slightly on the session. The Dow fell 245 points in the morning before rallying back to be down 160 points. It was all about oil.

Traders were clearly hiding in the big tech space while the oil story played out. Hence we see the Nasdaq flat on the session. The S&P split the difference.

It might be all about oil, but wider implications threaten the US financial sector. Billions had been lent to mostly smaller shale oil companies by mostly smaller regional banks in the US at pervading low interest rates, against hedged barrels. Those hedges have now rolled off, the Fed is about to begin a tightening cycle, and many a shale producer was already burning cash under US$60/bbl, let alone under 40.

Wall Street is thus nervous about the flow-on effect into the financial sector. This is not the case in Australia. Outside of BHP, Australia’s Big Oil names are heavily exposed to LNG rather than crude, and the big LNG projects are financed mostly through pre-organised offtake agreements and, as is the case recently for Santos for example, fresh equity. Australia’s banks are negligible lenders to the energy sector.

Until oil can find a bottom, or at least some stability, the spectre of energy sector defaults and bankruptcies will worry Wall Street. The irony is, of course, that the more oil companies go bankrupt, or at least throw in the towel, the more likely the oil price is to stabilise on reduced production.

Commodities

West Texas is down US5c to US$37.57/bbl and Brent is down US45c to US$40.21/bbl.

In Australia, the focus is as much on iron ore as it is on oil, whereas in the US, oil is the far more dominant stock market sector of the two. Iron ore has not seen 6% overnight plunges and is not prone to such volatility, being more of a China-dominated rather than global market place and trading nothing even remotely close to the volumes that go through the oil market each day.

There is no doubt concern, nevertheless, that as the iron ore price continues to quietly slide – it’s down another US10c to US$38.80/t – there appears no reason for a bottom-picking cavalry to suddenly appear for a short-covering scramble to hint at possible consolidation. Thus junior Australian iron ore miners who are burning cash are facing heightened financial risk. But again, Australia’s banks are not in the business of lending vast sums to junior miners.

On the LME, activity has almost ground to a halt. Traders suggest end-of-year blues and next week’s Fed meeting are keeping the punters away at the moment. Last night saw mixed and smallish moves among the base metals, with the highlights being one percent falls for nickel and tin and a one percent rally for lead.

The commodity price issue has taken further toll on the Aussie dollar, which is down another 0.8% at US$0.7208. The US dollar index is also down, by 0.2% to 98.44, and gold is relatively steady at US$1073.80/oz.

Today

The SPI Overnight closed down 23 points or 0.5%. A breach of 5100 threatens for the ASX200.

Yesterday’s NAB business confidence survey was fairly benign, but today we’ll see Westpac’s consumer equivalent which has particular importance at this time of the year. We’ll also see housing finance data, which is also a strong focus of attention at present.

Beijing will release Chinese inflation data today.

 

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article 3 months old

Material Matters: Bleak Outlook For Commodity Prices In 2016

-Less commodity-intensive growth in China
-Cement, glass, aluminium, steel oversupply
-Base metals pricing relatively better positioned
-Bulks likely to remain weak over 2016
-Titanium dioxide feedstock outlook soft
-Temporary sharp sell off in PGMs
 

By Eva Brocklehurst

Commodity Outlook

It may be tempting to look for a bottom for commodity prices next year but Citi suspects there may be more softness ahead. The issue is whether the supply/demand fundamentals are shifting closer to balance for many commodities.

The core of the problem, in the broker's view, is the damping down of expectations in China and a shift to less commodity-intensive growth, plus a slowdown in other emerging markets. The rising US dollar is expected to be an ongoing headwind in general, ranging from most beneficial to gold prices on a tactical basis to meaningless for soybeans.

Citi expects higher prices by the end of 2016 for US natural gas, crude oil, base metals – especially copper and nickel – as well as platinum and palladium. A mild price recovery is expected in cereals while bulk minerals are expected to remain weak. The broker does expect price recoveries to be more persistent in 2017 for oil and base metals and possibly agriculture.

Commonwealth Bank analysts believe China has re-emerged as the key downside risk for prices. A deterioration in tier one and three cities in October has renewed the potential for the property sector to tank again.

Meanwhile China's secondary sector, dominated by manufacturing of finished goods, continues to slow. Electricity output and loan growth to heavy and light industries confirm this is the case, the analysts maintain.

Overcapacity continues to hinder the economy with a number of industries in chronic oversupply, particularly cement, glass, aluminium and steel. Reductions by major Chinese metal producers do bode well for base metal prices but the analysts are cautious, believing aluminium, alumina, steel and zinc are the best positioned for a price increase if supply does ease.

National Australia Bank analysts add their weight to the bearish tone. Declines in prices are expected to be a little more modest in 2016, with iron ore the main drag on the sector. US dollar strength will help to partly offset price declines in Australian dollar terms. Overall, the Australian terms of trade is expected to trend lower but at a slower pace.

The analysts expect iron ore spot price will stabilise at an average US$42/tonne in 2016 while hard coking (metallurgical) coal will average US$83.50/tonne. Their forecast for thermal (steaming) coal for the 2016 Japanese fiscal year is unchanged at US$62/tonne.

To account for further upside risks to OPEC (Organisation of Petroleum Exporting Countries) production in coming months, despite a fall in US production, the analysts have revised near-term forecasts marginally lower.

Oil prices are now expected to stay around the high US$40 to low US$50 per barrel in the first half of 2016 and improve slowly towards US$60/bbl by early 2017. Higher global LNG supply is weighing on prices but the analysts note prices have flattened out since March in Australian dollar terms.

Meanwhile, the NAB analysts expect gold price movements will be largely determined by the US Federal Reserve's policy tightening. A hike is expected this month in the Fed Funds rate but the analysts believe the tightening will be gradual next year before accelerating in 2017. Gold prices are expected to maintain a modest downward trend, reaching below US$1000/oz by the second half of 2016.

Goldman Sachs, in marking to market, has highlighted the broad downward move this year across a raft of prices, particularly for iron ore (13%), nickel (9%), zinc (8%), alumina (7%) and steel (3%). Changes to commodity price forecasts have a material impact on the broker's earnings forecasts for those stocks exposed to these metals.

The broker's major changes include a 10% downgrade for South32 ((S32)), Fortescue Metals ((FMG)) and OZ Minerals ((OZL)) earnings. The gold price has been significantly weaker than Goldman expected over October and November and this has had a negative impact on earnings estimates for Newcrest Mining ((NCM)), Regis Resources ((RRL)) and Northern Star Resources ((NST)). The broker upgrades Independence Group ((IGO)) to Neutral from Sell on valuation grounds.

Mineral Sands

The titanium dioxide feedstock market continues to weaken. Ord Minnett expects prices, particularly for ilmenite, will remain weak over the near term. Additional volumes from Africa are entering the market, taking share in the Chinese market from higher cost producers in Vietnam.

Meanwhile, capacity reductions are occurring across the pigment industry. Ord Minnett believes the curtailments in the pigment industry are not yet complete and, amid lower Chinese growth estimates, are likely to flow through to lower feedstock demand. The broker reduces feedstock price forecasts by 10-20% for the next two years.

Platinum Group

Large outflows in both platinum and palladium exchange traded funds have occurred over recent months. Macquarie observes most of the moves in these funds have emanated from South Africa.

The broker suspects investors are losing patience with these metals after the prices fell substantially over the year. The timing is of interest. Macquarie surmises the appeal of platinum, particularly, may have been hurt by the VW diesel scandal with investors deciding it was a good time to exit. In any case the broker is not losing sleep over it, noting the selling has eased.
 

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article 3 months old

The Overnight Report: Wasted Energy

By Greg Peel

The Dow closed down 117 points or 0.7% while the S&P fell 0.7% to 2077 and the Nasdaq lost 0.8%.

The Bad Oil

One year ago the world assumed that the regular December OPEC meeting would bring about announced production cuts to stem the tide of the falling oil price, as that’s what OPEC had always done in the past. The WTI crude price had fallen from above US$100/bbl to US$60 at that time. But OPEC did not cut.

Instead, as it turns out, OPEC, and Saudi Arabia in particular, increased oil sales at whatever price obtainable in order to protect market share, leaving it to the US shale producers to provide the production cuts given it was they who had brought about global oversupply. In late January WTI hit US$45.

Signs of apparent US production reduction, via lower rig counts, took oil back to US$60 in June but supply volumes just kept going up. WTI almost went through US$40 in August before stabilising, but overnight, in the wake of another OPEC meeting featuring no announced production cuts, West Texas has fallen US$2.43 or 6% to US$37.62/bbl – its lowest level since 2009.

This seems a delayed reaction. The OPEC meeting was held on Friday night and oil markets traded only slightly lower on the session, probably because no one really expected OPEC to cut anyway. Maybe Wall Street needed the weekend to think about it, away from the euphoric fog of Friday’s jobs number and Mario Draghi’s reassured commitment to QE. OPEC is backing a combination of US shale reduction and growing global demand to stabilise prices in 2016. But right now, US crude supply continues to grow and global demand, particularly that from China, is sluggish.

This scenario was apparently not lost on one or more investors who decided to slam Australian oil stocks yesterday. The ASX200 opened up 78 points, erasing the previous session’s “Draghi Disappointment” falls, in concert with the big rally on Wall Street. But in moved the energy sector sellers, and by lunchtime the index was flat, where it remained for the rest of the session. The telcos were the only other sector to see notable selling, down 1.9%. Otherwise all sector moves were negligible bar energy, which fell 4.6%.

It was smart selling, in retrospect. Oil prices did not start the tumble that has taken WTI well below 40 and Brent knocking on the door until after the local close yesterday.

Rock and Roll

It’s been a wild ride for Wall Street these past three sessions. Dow down 250 points on Thursday night on Draghi disappointment, up 350 points on Friday night on jobs and Draghi back-tracking, down 100 points last night on the oil price slide. The Dow was down 200 points at one stage last night, so at least there are some prepared to buy.

Oil did not impact upon European markets last night, as one might expect given Europe is an oil & gas importer, whereas Australia is an exporter and the US is a self-sufficient producer (if we bring along Canada and Mexico). Responding to US jobs and Draghi at the first opportunity last night, the German stock market jumped 1.3% and France 0.9%. There are oil names listed in London, but the FTSE only fell 0.2%.

The flow-on issue for Wall Street with regard falling oil prices is credit defaults. US business television has already been publishing lists of oil companies deemed most likely to go bankrupt were oil to fall below 40, but before bankruptcy comes default. US banks, many of the smaller regional variety, previously lent money to shale oil aspirants on the basis they hedge their production at the time. Those hedges, which would have been placed anywhere up to US$100/bbl, have been rolling off this year and rollover values at US$40/bbl mean an incapacity to service loans.

Having experienced a GFC in silly home loans, a still nervous Wall Street is always on the lookout for new GFCs in the making. There has been much concern that surging US auto sales these past few years are the result of cheap finance and “subprime” car loans, but it turns out car dealers have actually been quite tight with their finance criteria. For a while now oil loans in a low interest rate environment have been a source of angst. The jury is still out on whether a wave of oil company defaults will set in train a wave of bank failures, and whether that will reach to the high end.

The Fed is set to commence raising interest rates next week.

Commodities

As noted, West Texas crude is down US$2.43 or 6% at US$37.62/bbl. Brent is down US$2.41 or 5.5% at US$40.66/bbl. Even the US natgas price fell 5.5% last night.

The moves have little to do with the US dollar, which is up only 0.3% on its index at 98.64.

Base metals actually saw some short-covering on Friday night on the strong US jobs number, which cements a Fed rate rise. Last night traders seemed to have changed their minds nevertheless, in what has been described as a slow day that highlights the rapid approach of year-end. Copper and tin fell 1%, aluminium, nickel and zinc fell 2%.

That other member of the sub-40 club, iron ore, is down another US50c to US$38.90/t.

Gold’s moment in the sun didn’t last, confirming a short-covering scramble on Friday night. Gold is down US$15.20 at US$10.71.30/oz.

Today

Although oil prices crashed overnight, the Australian market arguably saw its oil-related sell-off yesterday. The SPI Overnight closed down 14 points.

The NAB business confidence survey is out locally today. China will release November trade numbers.

National Bank ((NAB)) has provided an update on the progress of its UK demerger.
 

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article 3 months old

The Monday Report

By Greg Peel

There is little point in analysing the big fall in the local market on Friday, as it was all about “Draghi Disappointment”. Suffice to say it was a market-wide sell-off, consistent with falls around the globe, triggered by the announced extension to ECB stimulus, and on Friday night Mario Draghi eased concerns and effectively assured markets the ECB is still ready with shock and awe if necessary.

Alongside yet another positive US jobs report, which cements a rate hike from the Fed next week, Friday night saw the Dow turn a 250 point drop on Thursday night into a 370 point rally. European markets did not participate in the rebound during their sessions as Draghi spoke in New York after they had closed.

Lock it in

Ahead of the release of the US non-farm payrolls report for November, Wall Street was reeling in its expectations. Assuming the big surge in the October report to be a seasonal blip of sorts, some commentators were talking a mere 100,000 new jobs. But not only did the November result come in at 211,000, the October number was revised up for a total of over 300,000 job additions.

The unemployment rate remained unchanged at 5.0% on a slight tick-up in the participation rate. The only stumbling block was wage growth, which eased to an annualised 2.3% from October’s 2.5%. But that alone is not going to stop the Fed.

Whether or not one believes the Fed had already made its decision, the November jobs report locks in a December rate hike once and for all, as far as Wall Street is concerned. As is oft noted in this Report, the biggest enemy of markets is uncertainty, and uncertainty has reigned throughout 2015 in regard to Fed policy, up until Friday night. Certainty was arguably worth about half of the subsequent rally on Wall Street, which saw the Dow close up 369 points or 2.1%, the S&P gain 2.1% to 2091, and the Nasdaq rally 2.1%. The “technical damage” done to the indices from Thursday night’s big drop was more than repaired.

The other half came thanks to Mario Draghi.

“Well, of course”

It is important to note that while ECB president Mario Draghi has been consistent in his hints that QE would be extended from December, and consistent in his “whatever it takes” mantra over the past few years, never did he actually provide any numbers that should be expected at the ECB’s December policy meeting last week. It was left to the markets to assume the quantum.

The market assumed a 20 point cut to the ECB’s bank deposit rate and some increase above the prevailing E60bn per month of bond purchases. Thus when a 10 point cut and no increase were delivered, the market spat the dummy. Mostly because the market had set loaded itself up long or short as appropriate – long US dollar, short euro for example – to the point that if Draghi had delivered on assumed numbers, there may even have been a “buy the fact” rally in the euro, for example. Disappointment meant the biggest move in the euro since 2009.

Mr Draghi, it seems, got a bit of a shock at just how big the moves were on Thursday night, and just how destabilising they were for markets when the whole point of central bank stimulus is to provide some stability. But he had an immediate opportunity to set things straight in a speech he was due to deliver in New York on Friday night.

In that speech he emphasised that while the ECB only extended QE to a level the market was disappointed with at the December policy meeting, there is “no limit” to what the ECB is prepared to do and the central bank will act “without delay” to bump up the stimulus in 2016 if deemed necessary. European markets were already closed when Draghi spoke, but Wall Street, which had arguably been oversold on the ECB knee-jerk reaction, was open, and ready to reverse Thursday night’s moves.

The comical moment came in the Q&A panel session after Draghi’s speech, in which former Bank of England guv’na Merv King evoked chuckles from the crowd when he asked Draghi whether his speech was in direct response to the market carnage the night before. “No, not really,” Draghi replied, “it…um…well, of course”. Hilarity ensued.

It’s a relief to see a bit of Italian self-deprecation in contrast to the typically po-faced Janet Yellen.

As to whether the strong US jobs report was the main driver of Wall Street’s rally on Friday night, or Draghi, or both, it doesn’t much matter. Clearly Draghi held sway over the US bond market, given the ten-year yield fell 5 basis points to 2.15%. This is the wrong direction for a certain rate hike, but the right direction to reverse the carry trade rally in yields on Thursday night which was prompted by big jumps in European yields, following ECB disappointment.

Similarly, gold posted an ECB response. While additional stimulus in Europe is a positive for the gold price in isolation, Fed tightening and a stronger greenback are more pervasive for USD-denominated gold. With expectations strengthening that the Fed will raise next week, gold has been sold down heavily, talk of triple-digits has prevailed, and everyone had set themselves short. The disappointing ECB package only served to reaffirm short positions.

So despite the US jobs report, gold surged US22.00 to US$1086.50/oz on Friday night. Draghi’s comments were enough to trigger a short-covering scramble. The rally came despite the US dollar index also rallying, as the euro rebounded, by 0.7% to 98.37.

Commodities

The LME was well and truly closed when Draghi spoke in New York, so base metal traders only had the US jobs report to respond to. A strong jobs number implies a Fed rate rise and thus a strong dollar, thus weaker commodity prices. That is if you ignore the fact a strong US jobs report implies a healthy US economy, which is good for commodities. Once again, the base metal market had set itself very short, and thus on the jobs numbers, a short-covering scramble was triggered.

Copper rose just under 1%, lead, nickel and zinc all rose just under 2% and aluminium jumped over 2%. Tin sat still.

The oil markets weren’t ignoring US jobs and Draghi’s comments on Friday night, but the overriding influence was the OPEC meeting also underway. While no one really expected the Saudis to concede to production cuts, disquiet among OPEC members who all have, Saudi Arabia included, heavily bleeding national budgets, meant that maybe there would be some talk of production cuts in 2016.

The Saudis proved defiant however, and continue to assume a combination of rising global demand and falling US shale oil supply will lead to oil price stability returning at some point in 2016. Oil prices had jumped on Thursday night due to the terrorism implications of the San Bernardino massacre, and following the OPEC meeting fell back from whence they came. West Texas is down US$1.07 to US$40.05/bbl and Brent is down US80c to US$43.07/bbl.

Iron ore cares not for central bank policy outside of China. It is official – iron ore is now sub-40. The spot price fell US90c on Friday night to US$39.40/t.

The Aussie dollar is caught in a bit of a push me-pull you situation at the moment under the influence of both global and domestic central bank policy, as well as commodity prices. It was down 0.2% on Saturday morning at US$0.7340.

The SPI Overnight closed up 31 points or 0.6% on Saturday morning.

The Week Ahead

We can now all start tediously debating just when the second Fed rate rise might be. Oh joy.

US data releases drop off a bit this week and ahead of Wednesday week’s Fed policy meeting. The important data releases this week are all on Friday, being November retail sales, which include “Black Friday” and the general Thanksgiving weekend shopping spree, and the PPI and fortnightly consumer sentiment. Next week sees the CPI ahead of the FOMC meeting.

China is back in the frame this week. November trade numbers are due tomorrow and inflation numbers on Wednesday. The usual data dump of industrial production, retail sales and fixed asset investment numbers will occur on Saturday.

Locally we’ll see the construction PMI today along with ANZ’s job ad series. Tomorrow it’s NAB’s monthly business confidence survey, and on Wednesday Westpac’s consumer confidence survey along with housing finance data. On Thursday it’s our own November jobs numbers.

The local AGM season is all but over but there remain some stragglers including Westpac ((WBC)), who will host on Friday. National Bank ((NAB)) is due to update on the UK situation tomorrow and CSL ((CSL)) holds its annual R&D Day on Thursday.

This week, Rudi will give his final presentation (the first after publishing his book) to members of Australian Shareholders Association (ASA) in Canberra on Tuesday. He'll make his final TV appearance for the year on Sky Business on Thursday at noon. There will be no more Weekly Insights until late January.
 

For further global economic release dates and local company events please refer to the FNArena Calendar.

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