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  • Currency | Business Spectator
    Social Media Start ups Security Data Security Identity Management Wireless Security Telecommunication Latest stories Google v Facebook Who knows wins The unparalleled Google Analytics service means Google knows more about internet users than anyone else And runner up Facebook must go further to mine precious user insights if it wants to compete Will Twitter s founder strike social gold twice Biz Stone is looking to tap into the selflessness of others with his latest venture Jelly Enterprises But the just launched app will have to quickly shift into something of real value if it s to become a mainstream success Climate Carbon markets Energy markets Renewable energy Resources Solar energy Wind power CleanTech Science Environment Green Deals Policy Politics Smart Energy Latest stories Marking the milestones of 2013 Australia s transition to a clean energy economy took some political blows in 2013 but progress on the ground was heartening with energy efficiency solar and wind all providing tangible proof of their future potential A fifth year of declining power consumption Power consumption fell again in 2013 dipping 2 8 per cent across the National Electricity Market as scheduled renewables rose to 12 per cent of the market Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Currency Aust dollar falls in early trade Local currency pulls back from one month high on Bernanke comments 7 16am January 06 1 comment Will the RBA get its way on the Aussie in 2014 After months of prodding financial markets have finally started to take heed of the central bank s warnings on the unreasonably high currency by Jim Vrondas 6 32am January 06 39 comments Aust dollar lifts in late trade Local currency reverses morning falls recovers some losses against non US currencies 4 06pm January 03 Aust dollar slips at noon Local currency falls slightly but narrows losses against global currencies 1 11pm January 03 Aust dollar slips in early trade Local currency falls slightly after soft Chinese manufacturing figures 8 55am January 03 Aust dollar falls in late trade Local currency continues to fall after dip in Chinese manufacturing 4 31pm January 02 Aust dollar slips at noon Local currency falls slightly after dip in Chinese manufacturing activity 1 07pm January 02 1 comment Aust dollar opens lower Local currency keeps falling after Fed s decision to reduce stimulus program 8 53am January 02 1 comment Aust dollar higher in late trade Local currency continues to bounce from recent lows in muted holiday trade 4 04pm December 31 Aust dollar to fall in 2014 Analysts tip local currency will continue towards RBA

    Original URL path: http://www.businessspectator.com.au/markets/currency?page=1 (2014-01-12)
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  • Currency | Business Spectator
    Social Media Start ups Security Data Security Identity Management Wireless Security Telecommunication Latest stories Google v Facebook Who knows wins The unparalleled Google Analytics service means Google knows more about internet users than anyone else And runner up Facebook must go further to mine precious user insights if it wants to compete Will Twitter s founder strike social gold twice Biz Stone is looking to tap into the selflessness of others with his latest venture Jelly Enterprises But the just launched app will have to quickly shift into something of real value if it s to become a mainstream success Climate Carbon markets Energy markets Renewable energy Resources Solar energy Wind power CleanTech Science Environment Green Deals Policy Politics Smart Energy Latest stories Marking the milestones of 2013 Australia s transition to a clean energy economy took some political blows in 2013 but progress on the ground was heartening with energy efficiency solar and wind all providing tangible proof of their future potential A fifth year of declining power consumption Power consumption fell again in 2013 dipping 2 8 per cent across the National Electricity Market as scheduled renewables rose to 12 per cent of the market Industries Advertising and Marketing Agribusiness Automotive Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Currency Aust dollar hits US90c Local unit surges on weak US jobs data closes on one month high 6 16am January 13 NZ dollar to pass Aussie HSBC Bank believes Kiwi currency could pass parity with Aust dollar this year 10 53pm January 12 2 comments Aust dollar lifts in late trade Local currency rises ahead of US jobs report 5 26pm January 10 2 comments Aust dollar edges higher at noon Local currency trading a narrow range ahead of US jobs data 1 58pm January 10 Aust dollar lifts in early trade Local currency edges higher remains in tight range ahead of US jobs data 7 42am January 10 Aust dollar gains ground Local unit recovers much of recent losses remains below US 89 cents 5 07am January 10 Aust dollar slips in late trade Local unit falls despite positive local retail sales data 4 58pm January 09 Aust dollar weaker at noon Local currency remains lower despite small rise on retail data 12 36pm January 09 1 comment Aust dollar slips in early trade Local currency weakens after upbeat US jobs report Fed minutes 7 52am January 09 Aust dollar slips on data Strong US jobs figures push local unit slightly lower 3 48am January 09 Aust dollar slightly higher in late trade Local unit trades in tight range ahead of overseas economic data

    Original URL path: http://www.businessspectator.com.au/markets/currency?destination=taxonomy/term/2975 (2014-01-12)
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  • Exchange Traded Funds | Business Spectator
    to cut rates last night will lead to further disinflation and slower growth Markets ASX ASX Indices Major ASX stocks Markets Spectator Currency ETFs Latest stories Value Investor QBE is still at a premium There is potentially more fallout to come from QBE s ill fated expansion into the US Given its history of disappointment a clean set of financial numbers is needed to restore confidence Scoreboard French dip France s head of public audit said the country s debt had reached a danger zone adding to a generally weak day for European markets Politics Australian Election Federal Budget International News Asia Europe USA National Affairs Latest stories Gagging visas are an attack on democracy The skyrocketing price of a journalist visa for Nauru will limit coverage of Australian prisoners on a vassal state It is an insult to the democratic principles this country stands for Britain will be poorer for Scotland the brave The economic case for Scottish independence is far from settled with doubts hanging over volatile oil prices and uncertainty over future revenues One thing is certain it would be a disaster for Britain Technology NBN Buzz Mobility BYOD Smart Devices Emerging Tech Applications Big Data Cloud Computing Data Management Reviews Social Media Start ups Security Data Security Identity Management Wireless Security Telecommunication Latest stories Google v Facebook Who knows wins The unparalleled Google Analytics service means Google knows more about internet users than anyone else And runner up Facebook must go further to mine precious user insights if it wants to compete Will Twitter s founder strike social gold twice Biz Stone is looking to tap into the selflessness of others with his latest venture Jelly Enterprises But the just launched app will have to quickly shift into something of real value if it s to

    Original URL path: http://www.businessspectator.com.au/markets/etfs?destination=taxonomy/term/3476 (2014-01-12)
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  • Value Investor: QBE is still at a premium
    QBE increased its North American claims provision and will write down North American goodwill identifiable intangibles and other assets The update albeit disappointing suggests management is dealing more decisively with legacy issues from its US expansion in 2007 2011 QBE continues to be haunted by former Chief Executive Frank O Halloran s aggressive acquisition strategy Since O Halloran stepped up in 1998 QBE made 125 acquisitions globally spreading its operations across 48 countries and providing insurance to policyholders in more than 140 By acquiring other insurers QBE was able to reduce its risk exposure by diversifying across products and geographic regions The increased scale allowed reinsurance cost efficiencies when measured against gross written premiums However the ill fated expansion into the US from 2007 resulted in large fiscal 2013 reserve top ups lenders placed insurance LPI restricting costs and intangible write downs There is potentially more to come An overpriced acquisition can be devastating to future profitability Before the US acquisitions QBE maintained return on equity ROE at reasonable levels which suggested in aggregate its acquisitions had been fairly priced However since 2009 ROE has deteriorated Figure Return on equity Source QBE StocksInValue 1 QBE is trading close to our fiscal 2014 valuation of 11 48 but given its history of disappointment we require greater certainty that reserving is now adequate A recovery in the North America business is key to a turnaround in QBE The main determinant of QBE s valuation in the medium term will be the rate of recovery in ROE which will reflect the stickiness of premium rate rises the conservatism of underwriting investment returns the degree of management success at improving cost efficiency whether management can augment returns by turning QBE s array of small and large operations into a compelling global offer to clients

    Original URL path: http://www.businessspectator.com.au/print/765321 (2014-01-12)
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  • Wesfarmers value is off Target | Business Spectator
    Password Enter the password that accompanies your Email Address Remember me Log in Request new password This week Wesfarmers announced the sale of its insurance division to Insurance Australia Group for 1 85 billion representing a 700 million profit over book value The decision to sell this small non core insurance business makes strategic sense Proceeds could be invested in areas of the business that generate higher rates of return Though Wesfarmers has significantly improved profitability at its Coles supermarkets there is a long way to go before shareholders are rewarded for their dilution in acquiring the business Coles accounts for close to 50 per cent of group sales and 40 per cent of group earnings before interest and tax EBIT and as such is the major valuation driver of Wesfarmers The turnaround of Coles has been an operational success However the acquisition of Coles and two subsequent capital raisings substantially damaged profitability Shortly after Wesfarmers acquired Coles in November 2007 the company raised 2 5 billion in equity via an entitlement offer in April 2008 Less than a year later in February 2009 Wesfarmers undertook a second capital raising issuing approximately 4 6 billion of equity through a rights issue and placement All three increased the equity base and diluted normalised return on equity NROE NROE is a measure of profitability The capital raisings substantially increased the number of shares on issue and much of the raising was done at less than the equity per share As per the below chart NROE was higher pre acquisition and both capital raisings Since 2008 Wesfarmers profitability has averaged 9 per cent and is in uptrend but last year s NROE of 12 7 per cent is well off the pre 2007 levels WES normalised return on equity Source www StocksInValue com au A low NROE reduces earnings and dividend growth particularly given the low reinvestment component reflected in its high payout ratio of 91 per cent The low NROE explains Wesfarmers flat intrinsic value growth as per the below chart On our valuations intrinsic value will fall 0 6 per cent in fiscal 2014 and marginally increase 0 8 per cent in fiscal 2015 Figure WES Price vs Value Chart Source www StocksInValue com au With ten separate divisions diversification has created many sources of revenue growth for Wesfarmers However overall earnings have been dragged down by underperforming business units Strong earnings growth from Coles underpinned a solid fiscal 2013 result from Wesfarmers despite underperformance from retailer Target and the business units directly exposed to resources Target s fiscal 2013 earnings collapsed 44 per cent prompting the new managing director to describe the business as broken and its first quarter 2014 sales figures continued the downward trend falling 6 per cent The resources related business units all recorded a decline in annual revenue with little respite expected in the near term as sustained low coal prices continue to pressure earnings We use an adopted NROE of 15 per cent and required

    Original URL path: http://www.businessspectator.com.au/article/2013/12/20/markets/wesfarmers-value-target (2014-01-12)
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  • Value Investor: Downside danger for Woodside | Business Spectator
    style full width wf cache 1386902643 wf entity id 717756 wf entity type node Figure Woodside Price vs Value Chart Source www StocksInValue com au In the long term Woodside remains a growth company and we expect the high payout ratio and yield will not be sustained as Woodside invests in growth at more opportune times Woodside has an attractive diversified portfolio of growth assets Still projects such as Browse LNG and Leviathan are long dated and in the case of Sunrise the future is in the hands of government negotiations In the third quarter the Browse joint venture partners agreed to progress basis of design work in relation to Shell s Floating LNG FLNG development concept to commercialise the Browse gas fields FLNG is expected to save 30 to 40 per cent of the cost of onshore processing at James Price Point Western Australia The commencement of Front End Engineering Design FEED is expected mid 2014 and a final investment decision is expected in 2015 Woodside has an option to acquire 30 per cent of the Leviathan offshore gas project in Israel Woodside s option if executed would cost upfront US 896 million and a further US 350 million if a final investment decision is made Initial investment was expected in fiscal 2013 however this has been pushed forward to fiscal 2014 Given political risk and project uncertainty we would be cautious about ascribing any value to the option at the moment At this week s investor update Woodside Chief Executive Peter Coleman told investors the firm won t pursue its option unless it presents compelling value Further growth will come from the tie up of the Xena fields to the Pluto operations This will mean a longer life project for Pluto at current production rates of 3 8 million tonnes of LNG Current production in the North West Shelf is stable until 2022 The shelf partners are commencing a 4 000 square kilometre exploration program and Woodside is confident additional fields will be discovered and add to the life of existing operations to support stable production past 2022 Woodside has stepped up its exploration portfolio to include Myanmar Ireland Korea Peru Spain and Brazil Woodside has also expressed interest in the Grassy Point LNG project in Canada and projects in east Africa Production volumes commodity price and currency risk coupled with factors such as the petroleum resources rent tax political uncertainty operational risk and exploration uncertainty makes Woodside s earnings difficult to predict We use an adopted normalised return on equity NROE of 18 per cent and required return RR of 13 5 per cent to derive a fiscal 2014 valuation of 29 10 Amelia Bott is an Equity Analyst at StocksInValue a joint venture between Clime Investment Management a value fund manager and Eureka Report StocksInValue provides valuations and quality ratings of 400 ASX listed companies and equities research insights and macro strategy For an obligation free FREE trial please visit www stocksinvalue com au or call

    Original URL path: http://www.businessspectator.com.au/news/2013/12/13/markets/value-investor-downside-danger-woodside (2014-01-12)
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  • Value Investor: ASX won't float your boat | Business Spectator
    Aviation Construction and Engineering Education Family Business Financial Services Food and Beverages Gaming and Racing Health and Pharmaceuticals HR Industrial relations Information Technology Infrastructure Insurance Manufacturing Media and Digital Resources and Energy Professional Services Property Retail Small Business SME Telecommunications The Ashes Tourism Transport and Logistics Video KGB TV China Spectator CEO Hub Leadership Lab Management Insights Young Leaders Knowledge Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Value Investor ASX won t float your boat Stocks In Value 6 Dec 2013 11 45 AM Industries Financial Services Markets ASX The ASX provides a solid dividend yield and has enjoyed a profitable float frenzy but the stock is overvalued and vulnerable to interest rates rises You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password We expect a stronger fiscal 2014 for ASX Ltd despite declining market share in the equity markets business due to new competitor Chi X underpinned by a strong equity market and increased initial public offerings IPO and capital raising activity But even with this positive earnings momentum the ASX is not an investment consideration as it is already trading 50 per cent above our fiscal 2014 valuation of 24 97 The level of financial market activity is the primary influence on ASX s profit due to a relatively fixed cost base A decline in equity trading turnover and reduced market capitalisation which impacts listing revenues and capital raising activity is the key risk to earnings and contributed to ASX s weak first half fiscal 2013 result In the second half of fiscal 2013 market conditions improved and underlying earnings were up 7 per cent on the first half This contributed to a better than expected net profit after tax of 348 2 million an increase of 2 7 per cent on fiscal 2012 The ASX November monthly activity update reported 36 new listings in the financial year to date raising a total of 6 028 billion an increase of 80 per cent of the capital raised in the previous corresponding period Before calendar year end there will be approximately 25 new listings which include this week s highly anticipated Nine Entertainment and Veda Group initial public offerings Although the ASX does not provide detail on individual business segment margins it is understood the Listing and Issuer services business is high margin due to the ASX s monopoly position In 2006 the ASX acquired the Sydney Futures Exchange SFE The SFE is now ASX s key driver of revenue growth Over the last three years SFE revenue growth has outpaced the rest of the business providing support during a period of weak capital raising activity

    Original URL path: http://www.businessspectator.com.au/article/2013/12/6/markets/value-investor-asx-wont-float-your-boat (2014-01-12)
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  • Value Investor: Fortescue a fit for investors with fortitude | Business Spectator
    Centre Adapt or Die Knowledge Hub Business Accelerators Webinars eBooks Menu Value Investor Fortescue a fit for investors with fortitude Stocks In Value 29 Nov 2013 11 39 AM 1 Industries Resources and Energy Markets Fortescue s capital expenditure is declining but the miner still has extreme debt levels and its fortunes are at the mercy of forces beyond its control You must be logged in to read this article Not a member yet Register today Business Spectator is available on all of your devices so you can access the latest news and commentary where and how you like Register now Already a member Sign in here Email Address Enter your Email Address Password Enter the password that accompanies your Email Address Remember me Log in Request new password Fortescue is a single commodity producer and although its funding position looks increasingly manageable this could quickly change if the iron ore price were to fall This is a stock for experienced aggressive investors who understand and can tolerate commodity price volatility For these investors it could be a useful trading stock Fortescue s net debt on 30 June 2013 was 9 9 billion translating to an extreme net debt to equity ratio of 199 3 per cent However the balance sheet is rapidly improving as rising production and a strong iron ore price enable debt reduction Fortescue is currently producing and shipping iron ore at an estimated run rate of 115 million tonnes per annum Mtpa with the aim of reaching 155 Mtpa by early next year As the 155 Mtpa expansion program nears completion development risk and capital expenditure requirements are significantly reduced Fiscal 2014 capital expenditure is forecast to be US 1 9 billion a significant decrease from fiscal 2013 capital expenditure of US 6 2 billion At the annual meeting of shareholders earlier this month chairman and majority shareholder Andrew Forrest said Fortescue would repay US 1 billion of its US 2 04 billion in senior unsecured notes next month which would save an estimated 70 million a year in interest Given the flexible payment structure and the company s targeted gearing ratio of 40 per cent we expect further debt repayments in the near future This would reduce the risk in the stock and lower our required return Fortescue s improved ability to repay debt is highlighted in the below chart Capital expenditure is declining as production is increasing thereby generating strong free cash flow which can be used to deleverage its balance sheet FMG Capex vs production chart Source Fortescue AGM Presentation Fortescue is in a good position to manage its considerable debt obligations assuming the iron ore price holds above US 100 tonne However a falling iron ore price will call into question Fortescue s ability to deleverage its balance sheet The main driver of Fortescue s fate is the iron ore price which is driven largely by Chinese demand for the commodity Iron ore demand will be underpinned by Chinese economic growth as

    Original URL path: http://www.businessspectator.com.au/article/2013/11/29/markets/value-investor-fortescue-fit-investors-fortitude (2014-01-12)
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