Australia - Stocks

Re: Australia - Stocks

Postby winston » Wed Sep 07, 2016 12:46 pm

Time To Sell Australian Stocks, Says JP Morgan

By Shuli Ren

Asia ex-Japan stock markets have been more or less in a rally since touching their lows in February. Is it time investors take some profit off the table?

J.P. Morgan thinks the Asian region has another 12% upside before this year-end. But the bank has grown more cautious and downgraded Australia’s stock market from Neutral to Sell.

JP Morgan is worried about the downward trend we see in earnings revisions (and there are better markets elsewhere) and a weaker Aussie.

Strategist Adrian Mowat wrote:

Australia’s EPS forecasts continue to be revised down. The FY2 net revisions ratio is -20%. This is against a backdrop of improving revisions for EM Asia.

J.P. Morgan forecasts that the Australian dollar will weaken to 67USc/AUD by June 2017, as RBA rate cuts and Fed increasingly narrows the interest rate differential.

We cut industrials from neutral to UW on the back of sharp negative EPS revisions. Banks are downgraded from OW to neutral.

Jason Steed, J.P. Morgan’s Australia strategist, expects more earnings slippage for the banks.

He notes: ‘Reporting season brought about another round of minor downgrades to take the aggregate downgrade cycle to c.10% over the last 12 months.

While higher regulatory capital requirements and provisioning against large single name exposures were the culprits in recent seasons, they are making way for headwinds that are now more operational in nature – largely NIM pressure and ongoing issues managing costs in a low growth environment.

Specifically, downward NIM pressure remains evident from lower rates and competition despite backbook repricing, while banks seem reluctant to ‘go hard’ on costs – preferring to manage cost growth below revenue growth. Against this backdrop, we see no EPS growth across the sector for the next year or two’.

Australia’s big 4 banks comprise of over 30% of the MSCI Australia benchmark index, so if a broker has negative sentiments towards the banks, it can’t be positive on the entire Australian market.

Year-to-date, the iShares MSCI Australia ETF (EWA) rose 10.7%. The Australian dollar rose 5.5%.
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Re: Australia - Stocks

Postby winston » Sat Oct 01, 2016 8:43 pm

not vested

A Great Investment Opportunity in Australia

By Samuel Taube

Two of the best are iShares MSCI Australia (NYSE: EWA) and WisdomTree Australia Dividend Fund (NYSE: AUSE). They offer lots of exposure to Australia’s fast-growing finance and tech sectors.

And they’re both outperforming the S&P so far this year.


Source: Investment U

http://dailytradealert.com/2016/10/01/a ... australia/
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Re: Australia - Stocks

Postby winston » Tue Oct 18, 2016 10:49 am

Australia’s Bull Market Is Just Getting Started: Credit Suisse

By Shuli Ren

A rebound in commodity prices, iron ore in particular, has pulled Australia’s stock market up 6.3% in local dollar terms.

When we add in the stronger Aussie, U.S. dollar investors would have netted over 10%.


Credit Suisse‘s Australia equity analyst Hasan Tevfik thinks the S&P/ASX 200 can grind higher to 6000 by next December. This makes for 10% capital gain from now and a 15% total return including dividends.


The main risk to their bullish view, according to Credit Suisse, is Australia’s Big 4 banks.


Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... yptr=yahoo
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Re: Australia - Stocks

Postby investar » Wed Feb 15, 2017 3:35 am

McMillan Shakespeare Limited

MMS.AX : has a demonstrated ability to consistently earn high returns on equity.
Optically it looks cheap but apparently there is a pressure on margins... better to keep it on the watchlist for a few more qtrs.

http://www.sharecafe.com.au/roger_m.asp?a=AV&ai=42598
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Re: Australia - Stocks

Postby winston » Tue Jun 20, 2017 10:00 pm

Australia's Downturn

by Adam Haigh

U.S. bank sees economic slowdown Down Under with limp consumer
Buy defensives from Sonic Healthcare to Spark: Morgan Stanley

Online property-listings firm REA Group Ltd. and carsales.com Ltd. rank highest on Morgan Stanley’s quant screen.

But investors should avoid stocks exposed to a slump in consumer outlays, including: JB Hi-Fi Ltd., Automotive Holdings Group Ltd., Super Retail Group Ltd., Crown Resorts Ltd., Harvey Norman Holdings Ltd., Southern Cross Media Group Ltd., and Flight Centre Travel Group Ltd.


Morgan Stanley expect the local dollar to slide more than 15 percent to 64 U.S. cents by the end of next year, the weakest level among analysts surveyed by Bloomberg.


These stocks will do well in an environment where the Aussie weakens, according to Morgan Stanley: Ansell Ltd., Cochlear Ltd., Sonic Healthcare Ltd., Ramsay Health Care Ltd., CSL Ltd., BlueScope Steel Ltd.

And these shares have less sensitivity to currency fluctuations while still being rated overweight: Orora Ltd., Treasury Wine Estates Ltd., LendLease Group and Corporate Travel Management Ltd.


Source: Bloomberg

https://www.bloomberg.com/news/articles ... yptr=yahoo
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