Australia 01 (May 08 - Jan 11)

Australia 01 (May 08 - Jan 11)

Postby winston » Sat May 10, 2008 10:39 am

If what he says is true then Aust $, Aust Real Estate and Aust. Stocks would be good for the medium term..

=================================

The Coming Boom in Australian Resource Stocks
By Dan Denning, editor, Australia Mining and Resource Report
May 9, 2008

It takes nearly five hours by plane to get from my new hometown of Melbourne, Australia to the Timor Sea, the body of water that lies off Australia's northwest coast.

I've made the trip several times now on my way to Singapore and other destinations in Asia, Europe, and Africa.

Out the plane window, it looks like a lot of nothing... But all that space you fly over between Melbourne and the northwest coast... now that's what today's investor needs to know about.

In America, some people jokingly call it "flyover country," as if everything between New York and Los Angeles was just an afterthought.

America's so-called "flyover country" is home to rich corn and wheat fields, the massive coal deposits in Wyoming, the remnants of the Mesabi iron range in Minnesota, and of course, what's left of the producing oil and gas fields in Texas and Oklahoma.

Australia's "flyover country" today is on the verge of the same kind of boom that took hold in America 100 years ago. You see, Australia is home to nearly all the valuable mineral and metal deposits needed for the industrialization of China and India.

How much mineral wealth is buried in the Outback?

Australia ranks No. 1 globally in Economically Demonstrated Resources (EDR) of zinc, nickel, lead, thorium, tantalum, and mineral sands (rutile and zircon). It ranks in the top six EDR for bauxite, black coal, brown coal, copper, gold, iron ore, manganese ore, niobium, silver, and uranium. The Olympic Dam Mine (in South Australia) is home to nearly 476,000 tons of uranium – 18% of the world's known reserves.

Let me be clear, though. It's not just what Australia is capable of producing that excites me so much. It's what the country is already producing. Amid rising commodity prices, resource producers in Australia are benefiting right now from the scorching supply/demand dynamic.

Export earnings from Australian commodities should rise by 30% in 2008, thanks to demand for iron ore, coking coals, gold, and crude oil. And Australia is the world's single largest shipper of coal, iron ore, and wool.

As an investor, you must pay attention to two factors at work here. First, many small and unknown (at least in the U.S.) Aussie companies are sitting on assets that are rising in value. That alone is extremely bullish.

The second factor is that the companies that own the assets and can produce them will almost surely report massive earnings growth in the last three quarters of 2008. The stocks of these producers – based on our analysis – don't fully reflect that earnings growth.

It's clear that the bull market in resources is alive and well. I see three main factors driving this bull market. The first, as you probably know, is that commodities are coming off a low base. The bear market in commodities lasted 20 years. The second reason is supply has still not caught up with demand. A decade of low commodity prices resulted in chronic under-investment in new productive capacity. The third factor is what makes this resource cycle different from the rest – it's the strength of new demand from China.

How can you participate in this opportunity in Australia's resource stocks?

Of course, you can buy the big institutional favorites, like BHP Billiton (BHP). But I think the really huge money will be made here by owning junior miners and mining infrastructure stocks.

The iron ore juniors and coal companies aren't hated, like my friend Steve Sjuggerud likes to see... but they are even better... unknown! Throw in cheap and at the beginning of an uptrend, then you get two out of Steve's three factors.

The nice thing about the resource sector here is that there are far more stocks than analysts. With all the underlying resource prices in an uptrend... it's just a question of who's willing to do more homework to find small companies with economic resource assets.

I think the opportunity in small Australian resource shares is so exciting, I actually moved here to learn as much as I can and find the best investments. While I don't expect you to do the same, I can encourage anyone interested in making money in resource stocks to become familiar with the place immediately.
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Re: Australian Stocks

Postby winston » Sat May 10, 2008 10:41 am

BHP - THE REDBACK PUT IN ACTION

The latest from Australian commodity producer BHP Billiton: The "Redback Put" is still in play.

Several weeks ago, we called the big pile of money China is throwing at the resource sector "government portfolio insurance." If you have a position in energy, metals, or agriculture, chances are good China will prevent your investment from declining in value.

China is relatively resource poor, but it has hundreds of billions of dollars to spend to ensure its infrastructure plan runs harmoniously. In just the past year, China has taken stakes in French oil producer Total and UK producer BP to guarantee a steady supply of crude. All commodity producers are on its "watch list."

Among the purest plays on the Redback Put is the world's largest mining company, BHP Billiton.


BHP is one of the largest producers of iron ore, copper, zinc, uranium, aluminum, coal, and diamonds. Earnings have grown at an annual compounded rate of 50% since 2002. With many of its projects on China's doorstep, BHP is the poster child of the bull market in mining. Shares reached an all-time high this week.
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Jupiter Mines ( Australia )

Postby winston » Thu May 15, 2008 12:34 am

for my friends investing in Greater China markets..

************************

from kennynah with thanks:-

07 May 2008 09:22 GMT

China's Haoning Group to take 9.55 stake in Australia's Jupiter Mines


BEIJING (XFN-ASIA) - Chinese iron ore and steel trader Haoning Group has agreed to take 9.55 pct stake in Australian iron ore firm Jupiter Mines Ltd via a share placement, Jupiter said in a statement.

Haoning Group, through its subsidiary LSG Resources Pty LTd, will pay 3.7 mln aud, or 0.25 cents a share, for 14.8 mln Jupiter shares, and become the largest shareholder of the Australian firm, Jupiter said.

Jupiter has been searching for partners to jointly develop its Mt Mason iron ore mine in the central Yilgarn project in western Australia.

Haoning, based in Tangshan, is among Chinese companies seeking to secure long-term supplies of raw materials to meet strong domestic demand.
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Re: Australian Stocks

Postby winston » Sat May 24, 2008 10:47 am

Try hailing a taxi or ordering a meal in a restaurant in Perth these days and you may be in for a long wait. The capital of Western Australia (WA) is suffering a labour shortage, as young people head north to make real money from a mining boom. China's insatiable demand for WA's minerals is driving it, and helping China displace Japan as Australia's biggest trading partner.

The Pilbara, a desert region about 1,300km (800 miles) north of Perth, is the main focus. BHP Billiton and Rio Tinto, two of the world's biggest resource companies, roughly share the Pilbara's iron-ore deposits that feed China's flourishing steel industry. China takes about half their exports. They can barely dig it out fast enough to meet demand.

The "wild west", as WA is sometimes known, has seen other booms end in tears. Alan Birchmore, a veteran of some, and on the board of United Minerals, a company with a Pilbara iron-ore lease, reckons this one is different: it has "depth". "China", he says, "is showing that it takes some stopping once people get a taste for consumption."

Some forecasts back him up. In a report for Rio Tinto and the Australian National University, Ross Garnaut and Ligang Song, two economists, argue that by 2020 China's demand for metals may increase by the equivalent of the industrial world's annual total demand now.

– The Economist
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Re: Australian Stocks

Postby winston » Sun May 25, 2008 12:27 pm

Why Australia Could Become the Next Stock Mania
By Dan Denning, editor, Australia Resource & Mining Report

Nathan Tinkler is a pawn in the strategic chess match for Australia's resource wealth.

But he's a pawn as rich as a king. And he owes it all to coal.

In November 2006, Tinkler, a 32-year old former electrician, bought the rights to a relatively unknown coal deposit in Northwestern Australia (Queensland). He paid $1 million for it.

Last year, Australian producer Macarthur Coal bought a majority stake for $270 million. Tinkler celebrated by spending $19 million on 56 racehorses at the Magic Millions horse auction on the Gold Coast. Turning coal into horsepower... what a trade, eh?

The story doesn't end there. Tinkler just got a $400 million payout when ArcelorMittal, the world's biggest steelmaker, spent $632 million on a 14.9% stake in Macarthur last week.

The move surprised at least two other predators in the Aussie coal sector. Global mining giants Xstrata and China's CITIC Resources have also been trying to acquire stakes in Macarthur Coal.

You see, steelmakers need huge amounts of coal to fire their furnaces. And these firms have the same basic strategy: secure access to Australian commodities by buying the companies that own them. You could call it "mining in the stock market."

For Chinese companies, this is part of a larger "Grand Strategy" to source raw material needs from Australian companies. The strategy for the rest of us is simple... Buy resource shares before China does.

What can CHIMERICA do for you?

Here's what former Goldman Sachs VP Kenneth Courtis told the Australian Financial Review just a few weeks ago:

China wants everything you've got, everything. And we still can't fathom the demand that China is going to generate in the years to come... Imagine another 250 million people urbanising China over the next 20 years. What do you think that does to copper prices, iron ore prices, even given the levels they are at today?

Over the next two, three, four years, Australia could become really hot. You could see your stock market move a little bit like the Japanese market did in the 1980s or like the tech market did in the 1990s.

The first-ever hostile bid by a Chinese company for an Australian miner is nearing the finish line... Steelmaker Sinosteel recently raised its bid for iron ore junior MidWest from A$5.60 to A$6.38 per share.

But for months now, the big story in the Aussie market has been China Inc.'s stealth invasion of Australia through the stock market...

The Australian newspaper reported "Chinese interests" are considering a bid for 9% of BHP Billiton, Australia's largest resource company. The direct strategy would be to knock on the front door and ask for a chunk of stock.

That's not exactly subtle, and not likely to be well received. (You might recall the backlash when the Chinese National Offshore Oil Corporation tried to buy U.S.-based Unocal. The U.S. government blocked the bid.)

But it looks like China is taking the indirect approach, partnering with an Australian fund and a large foreign company (probably American) in the deal. If only one of the three parties to the bid is Chinese, then it looks less hostile, and it's more likely to get the approval of Aussie regulators.

If you look carefully at this statement from China's National Development Reform Commission (NDRC), the "Grand Strategy" comes into focus: "With iron ore prices rising explosively, many domestic firms are very enthusiastic about investing in overseas mines, which needs strengthened macro guidance from the country."

In other words, commodity prices are soaring. China desperately needs them. And the state government will support nearly all Chinese attempts to buy assets. That includes backing takeovers in Australia.

We'll see how far the Australian government will allow China to "infiltrate" its commodity sector... but it's clear both countries need each other. As long as the China boom continues, the Aussie resource boom will continue.

The right move for the rest of us is to get acquainted with Australia's resource shares. They are the object of a large global bidding war – one that could shoot this stock market into mania mode.

It's the kind of crossfire you want to be caught in... And the next four or five years may be the best time you'll ever see to make money in resource stocks.
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Re: Australia

Postby winston » Wed Jun 04, 2008 11:19 am

Australia's Economy Grows Faster-Than-Expected 0.6% (Update2) By Jacob Greber

June 4 (Bloomberg) -- Australia's economy grew twice as fast as economists forecast in the first quarter, driving the nation's currency higher on speculation the central bank may raise interest rates this year.

Gross domestic product rose 0.6 percent from the fourth quarter, when it increased a revised 0.7 percent, the Bureau of Statistics said in Sydney today. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.3 percent gain. The economy expanded 3.6 percent from a year earlier.

Stronger-than-expected growth, driven by consumer spending, threatens to stoke the fastest inflation since 1991, adding to pressure on the central bank to increase rates. Governor Glenn Stevens, who raised the benchmark to a 12-year high of 7.25 percent in March, left borrowing costs unchanged for a third month yesterday, saying there is evidence the economy is slowing.

``This is a green light for another interest-rate increase this year,'' said Savanth Sebastian, an equities economist at Commonwealth Bank of Australia in Sydney. ``The record expansion continues despite the Reserve Bank of Australia's efforts to significantly slow the economy.''

The Australian dollar jumped to 95.48 U.S. cents at 12:02 p.m. in Sydney from 94.92 cents before the report was released. The yield on the two-year government bond climbed 12 basis points, or 0.12 percentage point, to 6.88 percent.

Rate Expectations

Traders see a 100 percent chance the Reserve Bank will raise interest rates by a quarter point by year end compared with 62 percent odds yesterday, 30-day interbank interest-rate futures contracts show.

Australia's $1 trillion economy is benefiting from a mining boom that has pushed unemployment close to the lowest in more than three decades as resources companies such as Rio Tinto Group boost hiring to meet demand from China for iron ore and coal.

The nation's terms of trade, a measure of income from exports, is forecast by the central bank and government to rise 20 percent this year.

The trade boom ``will add substantially to national income and ability to spend, even with the slowing in global growth to below-trend pace that the bank is assuming,'' Stevens said yesterday.

Iron ore output at BHP Billiton Ltd., the world's biggest miner, rose 22 percent to a record 28 million metric tons in the three months through March, the company said on April 23.

AWB Ltd., Australia's largest wheat exporter, said on May 21 that first-half profit rose 89 percent because of increased sales by its Landmark farm merchandize unit.

Companies Hiring

The nation's economic expansion, now in its 17th year, has driven the unemployment rate to 4.2 percent and pushed annual inflation beyond the central bank's target range of between 2 percent and 3 percent.

Household spending contributed 0.4 percentage points to quarterly growth, today's report showed. Construction and national defense spending added 0.3 percentage points each.

Concern that a record jobs boom will drive up wages was a key reason central bank policy makers increased borrowing costs in March for the fourth time in seven months.

Stevens signaled yesterday that the bank is prepared to raise rates again if a slide in consumer and business spending isn't enough to cool inflation.

``What the central bank has done so far has not had a significant impact on the economy,'' Commonwealth's Sebastian said. ``They will wait for the inflation figures in August and we can expect another rate increase after that.''

Economic Slowdown

Other reports suggest the economy is slowing.

Retail sales dropped in April by the most in almost 12 months as households cut spending on food and recreational goods. Business confidence slumped in April to the weakest level since the 2001 terrorist attacks in the U.S., and home-loan approvals declined in March to the lowest reading in almost three years.

Australia's All Ordinaries Index of stocks plunged 16 percent in the first quarter, the biggest decline since 1987, amid concern the U.S. housing recession is spreading to Europe and Asia, eroding growth in the nation's biggest export markets.

The impact of rising interest rates and market volatility is being partially offset by the Australian currency's 8.3 percent gain this year against the U.S. dollar, helping buttress domestic demand for imported goods.

Harvey Norman Holdings Ltd., the nation's biggest furniture and electronics retailer, said in May that sales rose 6.4 percent in the first four months of the year on demand for flat- panel televisions and iPods.

The chain price index, a measure of retail prices in Australia's economy, climbed 3.1 percent in the first quarter from a year earlier, today's report showed.
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Re: Australia

Postby winston » Sat Jun 07, 2008 9:28 am

Australian House Prices Fall Most in Five Years on Higher Rates
By Jacob Greber

June 7 (Bloomberg) -- Australian house prices fell in the first quarter by the most in five years after the central bank raised interest rates at the fastest pace in more than a decade.

The median price for houses fell to A$458,488 ($439,644) in the March quarter, down 2.7 percent from the previous three months, the Real Estate Institute of Australia and Mortgage Choice Ltd. said. Apartments also fell 2.7 percent to A$355,297.

Falling residential prices support the central bank's view that Australia's $1 trillion economy will slow this year, helping ease the fastest inflation in 17 years. Reserve Bank of Australia Governor Glenn Stevens, who left the benchmark interest rate unchanged at a 12-year high this week, signaled he is prepared to boost borrowing costs again if growth rebounds. He raised the rate in March for the fourth time since August.

``Unfortunately, investors, as well as owner-occupiers, are showing reduced levels of confidence,'' REIA President Noel Dyett said in a statement. ``The fall in median prices isn't surprising, following recent interest rate rises.''

Households, already grappling with higher gasoline and food costs, also were buffeted this year as commercial lenders increased mortgage rates by more than the central bank did.

The nation's five largest lenders, led by Commonwealth Bank of Australia, have added an average of almost 90 basis points to home-loan interest rates this year to cover higher funding costs caused by the squeeze on credit markets. The central bank increased by only 50 basis points in that time.

Mortgage Costs

The jump in borrowing costs eroded consumer confidence close to the lowest level in 15 years and triggered falling retail sales in three of the first four months of this year.

Clive Peeters Ltd., an Australian electrical appliances retailer, said this week the market slowed ``slightly'' in March, deteriorated sharply in April and continued to cool in May.

The Reserve Bank's policy makers left the overnight cash rate target unchanged this week at 7.25 percent. Investors expect the bank to increase the benchmark lending rate by at least a quarter-point in the next 12 months, according to a Credit Suisse Group index based on trading in interest-rate swaps.

About 90 percent of Australian mortgages are taken out on a floating rate, which moves with the central bank's benchmark. A quarter-point increase adds about A$42 ($40) a month to the average A$250,000 home loan, according to the Housing Industry Association.

Economic Growth

Home prices may slide further this year after housing affordability deteriorated in the first quarter to the worst on record, according to a separate report by the real estate institute published May 28.

The proportion of a family's income needed to repay an average home loan climbed to 38 percent in the March quarter from 37.4 percent in the December quarter. That's the highest since the institute began measuring affordability 22 years ago.

House prices slumped the most in Melbourne, falling 8.4 percent in the first quarter, today's report showed. Canberra slid 6.8 percent, Perth dropped 2.5 percent and Sydney shed 0.3 percent. The value of homes gained in Hobart and Adelaide.

``The fall in prices is being offset by the increased cost of financing home loans, so we have yet to see any real impact on housing affordability,'' Dyett said.
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Re: Australia

Postby kennynah » Thu Jun 12, 2008 10:18 am

12 Jun 2008 02:13 GMT
Australia's May unemployment rate steady at 4.3 pct s/adj, employment falls


SYDNEY (Thomson Financial) - Australia's seasonally-adjusted unemployment rate was steady at 4.3 percent in May from April, government data showed on Thursday.

The market had been expecting the unemployment rate to be 4.2 percent in May.

The April unemployment rate was revised up from a previously reported 4.2 percent.

The Australian Bureau of Statistics (ABS) said the number of employed people fell by 19,700 to 10.69 million in May, marking the first fall since October 2006, and compared with a consensus forecast of a 13,500 rise in the number of people employed.

Full-time employment decreased by 10,400 to 7.46 million, while part-time employment fell 9,300 to 3.05 million.

The number of unemployed people was steady at 476,700, the ABS said.

The number of people looking for full-time work decreased by 17,900 to 317,700, while those looking for part-time work rose by 18,000 to 159,000.

The workforce participation rate eased 0.2 percentage point to 65.2 percent.


The following table shows seasonally-adjusted figures for May, compared with April:

Jobless rate - 4.3 percent vs 4.3 percent

Employed - 10.69 million vs 10.71 million

Unemployed - 476,700 vs same

Participation rate - 65.2 vs 65.5 percent
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Re: Australia

Postby kennynah » Sun Jun 15, 2008 5:54 pm

15 Jun 2008 09:50 GMT
Australia wants Asia to drop fuel subsidies - minister



SYDNEY (Thomson Financial) - Australian Finance Minister Lindsay Tanner said Sunday the government wanted Asian countries to drop their fuel subsidies to ease rising petrol prices.

Canberra argues that the subsidies distort demand for petrol and push up the cost of fuel and that without them, demand would lessen and lead to lower prices.

Tanner said the idea of scrapping the subsidies was "very sensible" and that the Labor government of Prime Minister Kevin Rudd would push for their removal.

"We can put pressure on other countries to remove subsidies that do distort choices that people make and do reduce the extent to which they can move into other technologies," Tanner told Australian television.

"It's important for Australia to put pressure on these other countries, but of course we can't force them to make those changes."((kenny : yeah...u said it right....take a crash course from British Council on "effective communication"))

Tanner said that while Australia was benefiting from Asia's rapid development through increased demand for energy and mineral resources, at the same time the region was also demanding more petrol.

"That's putting huge upward pressure on petrol prices and outstripping demand. And of course we have to pay those global petrol prices as well," he said.

Tanner's comments come after Rudd last week suggested applying a "blowtorch" to force the OPEC oil cartel to increase production to relieve prices.

But the conservative opposition said Australia's "gratuitous advice" to its Asian neighbours about a global problem was presumptuous.

"The best thing for us is to look at our own affairs in the first instance, that way you then have some credibility in lecturing others," foreign affairs spokesman Andrew Robb said.
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Re: Australia

Postby winston » Thu Jun 26, 2008 12:27 am

– Financial Times

The extent of Australia's minerals boom was underlined on Monday when its official forecasting agency predicted export earnings from commodities would achieve the biggest annual rise in four decades in 2008-09, hitting a record.

The Australian Bureau of Agricultural and Resource Economics forecast the value of the country's commodity exports would rise 40 per cent to A$212bn (US$202bn) in the financial year to June 2009, led by a 48 per cent surge in mineral exports to A$178bn.

If these figures are achieved, commodity exports will have more than doubled in value terms since 2003-04 when the current commodity supercycle started.

While the sharp rises in oil and food prices are firmly on the global agenda, Abare predicted that world prices for metallurgical coal would be three times higher in 2008-09 compared with this year.

Abare said the value of Australia's exports of iron ore, the other main ingredient in steelmaking, will rise by 72 per cent in the coming year, mainly because of price rather than volume increases.
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