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  • Aust dollar lifts in late trade | Business Spectator
    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 REVIEW Nokia Lumia 1520 The Nokia 1520 sports a number of key upgrades that bring it the Window s phone platform to parity with its Android competition But does this phablet do enough to sway attention from its rivals 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 Climate Carbon markets Energy markets Renewable energy Resources Solar energy Wind power CleanTech Science Environment Green Deals Policy Politics Smart Energy Latest stories Solar s grim 2014 five headwinds await With power price rises moderating panel prices no longer in freefall and doubts over the million roof rebate Australian solar will struggle in the year ahead Is the EU about to abdicate climate leadership The rift over energy and climate policy is widening in Brussels as politicians feel the pressure from the continent s ongoing economic crisis 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 Aust dollar lifts in late trade 10 Jan 5 26 PM 1 Markets Currency Australian Dollar Local currency rises ahead of US jobs report 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 AAP The Australian dollar has drifted higher as investors await the release of important US jobs data At 1700 AEDT on Friday the local unit was trading at 89 03 US cents up from 88 69 cents on Thursday FXCM market analyst David de Ferranti said the eagerly anticipated data being released on Saturday morning Australian time could provide the catalyst to drive the Australian dollar away from the US89 cent mark it has hovered around in recent weeks Even a strong jobs report which would typically boost the US dollar could also be good news for the Australian unit he said The US Federal Reserve is being guided by the US labour market outlook on its march towards the end of quantitative easing Mr de

    Original URL path: http://www.businessspectator.com.au/news/2014/1/10/australian-dollar/aust-dollar-lifts-late-trade?destination=node/765841 (2014-01-13)
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  • Britain’s Christmas ghost of retail future
    said consumers are falling out of love with the bigger supermarket chains that have dominated UK grocery and general merchandise retailing in recent decades The trends also highlight the shift towards online purchases within one of the most sophisticated online retailing environments in the world Online sales in the UK over the Christmas period accounted for 18 6 per cent of non food sales and were 19 2 per cent higher than in 2012 Tesco said its online grocery orders were up 11 per cent to more than three million orders and its general merchandise orders online were up 25 per cent Online grocery sales in the UK are about five times larger as a proportion of overall sales than in the US John Lewis is arguably the most advanced large multi channel retailer in the world with nearly a third of its total sales now online While its total sales were up 7 2 per cent 6 9 per cent like for like its online sales were 22 6 per cent higher Significantly given the bricks and clicks model now being pursued by most of the established Australian retailers its click and collect orders were up about 62 per cent the buy online and collect in store offer is proving quite powerful The UK experience provides a glimpse of a potential future here given that Aldi is now established in this market and has a major expansion program underway while Costco also has a beachhead and is developing a bigger footprint If there is a similar polarisation of the grocery and general merchandise market here they would be the obvious beneficiaries along with Kmart and Big W while Target Myer and David Jones would need to think carefully about where they position their offers Online retail sales in Australia

    Original URL path: http://www.businessspectator.com.au/print/765796 (2014-01-13)
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  • Britain’s Christmas ghost of retail future | Business Spectator
    merchandise retailing in recent decades The trends also highlight the shift towards online purchases within one of the most sophisticated online retailing environments in the world Online sales in the UK over the Christmas period accounted for 18 6 per cent of non food sales and were 19 2 per cent higher than in 2012 Tesco said its online grocery orders were up 11 per cent to more than three million orders and its general merchandise orders online were up 25 per cent Online grocery sales in the UK are about five times larger as a proportion of overall sales than in the US John Lewis is arguably the most advanced large multi channel retailer in the world with nearly a third of its total sales now online While its total sales were up 7 2 per cent 6 9 per cent like for like its online sales were 22 6 per cent higher Significantly given the bricks and clicks model now being pursued by most of the established Australian retailers its click and collect orders were up about 62 per cent the buy online and collect in store offer is proving quite powerful The UK experience provides a glimpse of a potential future here given that Aldi is now established in this market and has a major expansion program underway while Costco also has a beachhead and is developing a bigger footprint If there is a similar polarisation of the grocery and general merchandise market here they would be the obvious beneficiaries along with Kmart and Big W while Target Myer and David Jones would need to think carefully about where they position their offers Online retail sales in Australia represent only about a third of the penetration achieved in the UK but are growing and will accelerate as the major retailers late adapters push more heavily into that space The UK and US experience underscores the value of the multi channel proportion The rate at which consumers are shifting to online purchases in the UK has surprised the sector with Tesco s chief executive Philip Clarke saying that multi channel was moving faster than anyone had anticipated If the Australian experience were to track what has occurred in the UK the local multi channel retailers would have to accelerate the development of their IT platforms and supply chains The much publicised problems with Myer s online offer in recent weeks underscores the extent of the challenge for local retailers in ensuring their platforms and supply chains can meet consumer expectations It is also worth noting that online sales in the UK occurred far later in the pre Christmas period than in the past indicating increased consumer confidence in retailers fulfilment processes with an increasing proportion of purchases occurring on mobile devices Tesco long regarded as one of the best if not the best grocery chains in the world and the model for much of what the Australian supermarket chains have been doing is responding to the changing retail

    Original URL path: http://www.businessspectator.com.au/article/2014/1/10/retail/britains-christmas-ghost-retail-future?destination=node/765796 (2014-01-13)
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  • Value Investor: Westpac's fair weather is on the wane | Business Spectator
    result and the five per cent higher full year ordinary dividend in an otherwise challenging period There were also 20 cents of special dividends Fiscal 2013 provisions fell to 0 57 per cent of loans from 0 63 per cent in fiscal 2012 and 0 69 per cent in fiscal 2011 Statutory profit was 14 per cent higher at 6 816 billion The contribution to profitability of tapering provisions is set to decline as bad and doubtful debt charges are at cyclical lows and cannot fall much further While the downtrend is partly a result of several years of work by the banks to manage their credit quality carefully a large cyclical component remains and can be expected to revert to a mid cycle average at some stage wysiwyg field wf deltas 0 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1384473741 wf entity id 666896 wf entity type node Figure Westpac Bad Doubtful Debt Charges Source Westpac Banking Corporation Consensus fiscal 2014 earnings forecasts for Westpac deliver mid single digit pre provision profit growth at best A return to higher provisioning for example from 16 basis points of gross loans to 20 halves this earnings growth to low single digit with corresponding implications for profitability ROE As earnings drivers Westpac s bad debts costs and capital management are quite optimised now Interest margins will probably not be supportive as mortgage repricing wanes Westpac s core IT system upgrade will also keep pressure on costs in fiscal 2015 to 2018 This means banking income and especially net interest income need to accelerate to meet shareholder expectations for perpetually rising dividends And for this to happen the post election uptick in consumer and business confidence needs to strengthen further and translate into system credit growth more in the high single digits than the historically weak rates seen recently The extent and timing of this remain to be seen In short it is hard to see normalised return on equity returning to pre GFC levels soon Westpac shareholders need to be realistic We do not forecast an imminent surge of bad debts however given the stock s full valuation in the market we would not be buyers at current prices wysiwyg field wf deltas 1 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1384473741 wf entity id 666896 wf entity type node Figure Westpac Price vs Value Chart Source www StocksInValue com au David Walker is Head of Equities 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 1300 136 225 Print this page Value Investor Westpac s fair weather is on the wane Stocks In Value 15 Nov 2013 11 02 AM

    Original URL path: http://www.businessspectator.com.au/article/2013/11/14/markets/value-investor-westpac-must-accelerate-just-stand-stillwestpacs-fair (2014-01-13)
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  • Value Investor: Are ANZ's provisions prudent? | Business Spectator
    not of investment consideration at these levels As per the below chart there is a continuing theme of declining provisions since 2009 for all the majors wysiwyg field wf deltas 0 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1383879103 wf entity id 654636 wf entity type node Figure 6 Bank provisions to total loans Source Clime Asset Management There are few instances where provisions have been lower than today In 2007 and 2008 provisions were lower and this preceded a very challenging time for bank equity holders as the Global Financial Crisis GFC unfolded and dilutive capital raisings were required to boost provisions Pinpointing a significant rise in bad debts is very difficult We carefully watch the levels of and expectations for unemployment and economic activity as key indicators But the post GFC tendency of consumers and corporates to deleverage and the recent series of interest rate cuts are likely to keep downward pressure on bad debt expenses in the near term supporting bank profitability ANZ reported statutory net profit after tax NPAT of 6 3 billion and cash profit after tax of 6 5 billion both up 11 per cent Performance was broad based with double digit profit growth in all businesses silencing critics of its super regional strategy The cost to income ratio fell an impressive 130 basis points to 44 8 per cent in line with the benchmark cost ratio achieved by CBA of 44 91 per cent The dividend exceeded expectations with the board declaring a fully franked final dividend of 91 cents per share amounting to a fiscal 2013 fully franked dividend of 164 cents per share up 13 per cent on fiscal 2012 ANZ s provisions for bad and doubtful debts were down five per cent to 1 197 billion Bad debt expenses as percentage of loans fell three basis points to 0 25 per cent and provisions as a percentage of total assets fell nine basis points to 0 62 per cent Though we are not suggesting bad debt expenses will necessarily increase in the short term it is important to be aware that provisioning levels at the major banks are getting progressively weaker and this increases risk in the event of an economic downturn Foresight is needed to build appropriate provisions in the good years to prepare for the bad years As was the case in the GFC increasing provisioning too late can induce the need for a capital raising at a lower price and as such dilute the value of shares wysiwyg field wf deltas 1 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1383879103 wf entity id 654636 wf entity type node Figure ANZ Price vs Value Chart Source www StocksInValue com au Amelia Bott is an Equities Analyst at StocksInValue a joint venture between Clime Investment Management a value fund manager and Eureka Report StocksInValue provides valuations and

    Original URL path: http://www.businessspectator.com.au/article/2013/11/8/markets/value-investor-are-anzs-provisions-prudent (2014-01-13)
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  • Value Investor: Qantas flying into headwinds | Business Spectator
    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 Qantas flying into headwinds Stocks In Value 1 Nov 2013 12 38 PM Industries Aviation Markets The operating environment is not going to get any less challenging for the nation s largest airline 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 Renowned value investor Warren Buffett described airline stocks as a deathtrap for investors Many long term shareholders of Qantas Airways Limited QAN would agree In the past ten years the QAN share price has fallen over 60 per cent while the ASX 200 has increased over 50 per cent Figure Qantas share price versus ASX200 Source Google Finance QAN operates in a challenging environment due to economic volatility uncertain exchange rates high fuel prices and intense competition In fiscal 2013 QAN recovered from a statutory loss of 244 million in fiscal 2012 to a statutory profit of 5 million A positive result in contrast to competitor Virgin Australia Holdings VAH which recorded a full year loss of 98 1 million However hopes of a sustained recovery were dampened at QAN s recent AGM Management said the airline continues to face a challenging operating environment and indicated fiscal 2014 would be worse than fiscal 2013 QAN noted consumer confidence remains low at the leisure end of the market and the rise in business confidence following the election has failed to translate into any discernible increase in demand QAN expects group yields to decline in first half of fiscal 2014 by two to three per cent versus the previous corresponding period as a result of weak underlying demand and competitive pressure domestically and internationally The pressure on yields is due to oversupply on key routes at the same time as weak demand The September domestic passenger numbers from Sydney Airport highlight the weakness in demand for domestic air travel This is a particular concern given stated seat capacity increases from QAN and VAH of 1 5 per cent to 2 5 per cent and three to four per cent respectively in fiscal 2014 Figure Sydney Airport Traffic Performance Source Sydney Airport Holdings Limited QAN has drawn a line in the sand with respect to retaining 65 per cent of the domestic market share however this may be to the detriment of yields as VAH increases capacity at a faster rate Increased capacity on QAN s Asian routes due to retaliatory behaviour from foreign carriers Singapore Airlines and Cathay

    Original URL path: http://www.businessspectator.com.au/article/2013/11/1/markets/value-investor-qantas-flying-headwinds (2014-01-13)
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  • Value Investor: When China goes to Rio | Business Spectator
    reaffirmed iron ore volume guidance of 265 million tonnes a year The production results confirmed the miner is on track with the 16 billion expansion of its iron ore operations In August Rio expanded capacity from 237 million a year to 290 million four months ahead of schedule and 400 million under budget Further expansion of the port rail and power infrastructure to support production of 360 million tonnes annually is underway for completion by 2015 Approval for mine development from 290 million to 360 million will be decided at the November board meeting The majority of Rio s iron ore sales go to export markets with China its largest customer and incremental buyer of new volumes Iron ore demand is underpinned by the urbanisation of its population which requires a far more steel intensive lifestyle compared with rural living Premier Li Keqiang plans to have 60 per cent of China s 1 35 billion population as urban residents by 2020 a 15 per cent increase on current levels While periodic hiccups will no doubt plague investor confidence we view the long term outlook for Chinese economic growth as sustainable China s growth has slowed from 10 per cent to 7 to 8 per cent and will trend lower over time due to a high base effect but its demand for commodities will keep growing As per the figure below Chinese steel intensity still has a long way to catch up with developed countries supporting our view iron ore demand will continue to grow wysiwyg field wf deltas 1 wf field field wysiwyg media wf formatter aibm ui media output wf settings style full width wf cache 1382665389 wf entity id 633276 wf entity type node Figure Chinese Steel intensity Source Rio Tinto Chart Pack Amelia Bott is an Equities 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 1300 136 225 Print this page Value Investor When China goes to Rio Stocks In Value 25 Oct 2013 12 33 PM 2 Industries Resources and Energy Markets ASX More from Stocks In Value 10 Jan Value Investor QBE is still at a premium 20 Dec Wesfarmers value is off Target 13 Dec Value Investor Downside danger for Woodside 06 Dec Value Investor ASX won t float your boat 29 Nov Value Investor Fortescue a fit for investors with fortitude Related articles 13 Jan Aust stocks flat at noon 13 Jan Aust stocks open little changed 13 Jan Scoreboard Dollar bounce 13 Jan ASX warns on market outsourcing 13 Jan Aust dollar lifts in early trade More from Business Spectator Technology Adapt or die Commercial The Future of Energy Family Business Alan Kohler s Family Business China China Spectator Log in to post comments Comments interesting to comment that Submitted by

    Original URL path: http://www.businessspectator.com.au/article/2013/10/25/markets/value-investor-when-china-goes-rio (2014-01-13)
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  • Value Investor: Harvey Norman's heady heights | Business Spectator
    Accelerators Webinars eBooks Menu Value Investor Harvey Norman s heady heights Stocks In Value 17 Oct 2013 3 16 PM Markets For this retailer s share price a consumer recovery and exposure to the building cycle is more than priced in 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 In the past year the stock of Harvey Norman Holdings Ltd has significantly outperformed the market rallying over 50 per cent and outperforming the All Ordinaries which is up 15 per cent over the same period Investor appetite has been driven by modest gains in consumer spending the retailer s leverage to the housing completions cycle a marginal recovery in sales and expectations of further gains Trading 50 per cent above our valuation and 30 per cent above the consensus mean valuation for fiscal 2014 we argue a consumer recovery and exposure to the building cycle is more than priced in Figure Harvey Norman Holdings Limited Price vs Value Chart Source www StocksInValue com au Historical lows in the cash rate and home loan rates are stimulating the housing market with August building approvals up 8 per cent on the previous year Harvey Norman s exposure to homemaker categories positions it well compared with other discretionary retailers Two powerful drivers of consumer spending are property prices and perceptions of job security While the latter is yet to improve there is some anecdotal evidence strong capital city property prices are encouraging consumers to open their wallets after a long period of caution This is known as the wealth effect which is further boosted by a strong equity market Harvey Norman s late move into online retail is gaining traction with online sales accounting for two per cent of group sales and annualised growth over 100 per cent albeit off a low base The established store network of 206 stores domestically is a competitive advantage acting as fulfillment centres for the online channel Over the past couple of years challenging trading conditions and a subdued housing market have weighed on Harvey Norman s earnings Historically margins have ranged between four and five per cent but fell to 2 63 per cent in fiscal 2012 and to 2 40 per cent in fiscal 2013 respectively Stronger franchise sales revenue in the second half of 2013 versus a year earlier suggest franchise margins have bottomed and tactical support will ease if sales continue to grow However Harvey Norman will continue to face structural challenges Its omni channel strategy is encouraging but the company faces increasing competition from domestic and offshore retailers which will constrain margins and damp profit growth Competitive threats include new entrants in

    Original URL path: http://www.businessspectator.com.au/article/2013/10/17/markets/value-investor-harvey-normans-heady-heights (2014-01-13)
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