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Australia Maket(2017-03-27)

Australia
2017-03-27 10:28

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BlueScope Steel Limited (BSL):
 
A string of US steelmakers are expanding capacity and upgrading mills in the same region where BlueScope Steel operates a highly profitable plant that produced 35 per cent of the company’s entire profits in the first half of 2016-17. The rush of expansions is being prompted by the protectionist policies of US President Donald Trump designed to stimulate local manufacturing, and harsh anti-dumping and tariff measures on Chinese steel imports which have shrunk to onesixth of their levels in mid-2016. BlueScope, which moved to 100 per cent ownership of the North Star steel mill in Ohio in late 2015 just as the first wave of anti-dumping measures hit, has been a big beneficiary of rising demand and margins. Earnings from North Star doubled to $211 million in the first half of 2016-17, compared with a year earlier. But rivals haven’t been standing still and want more of the action. Nucor Corporation revealed on March 22 it would spend $US85 million ($111 million) to upgrade a steel mill in Marion, Ohio, which its chief executive John Ferriola said would help the company ‘‘maintain a cost-competitive position’’. Nucor, listed on the New York Stock Exchange, also praised Mr Trump and his administration for his commitment to restoring American manufacturing.
 
Coca Cola Amatil Limited (CCL):
 
ASX-listed beverage company Coca-Cola Amatil is preparing to divest its main manufacturing plant in Queensland, a $165 million facility at Richlands in Brisbane. The company, which flagged about $50 million of restructuring costs and $75 million of capex for 2017, has previously said it would attempt to offset costs through the potential sale and leaseback of properties. As foreshadowed in January, the company is looking at a sale and leaseback deal on the site and has now appointed Colliers International to broker the property. ‘‘The Coca-Cola Amatil campus at Richlands could be one of the most significant industrial logistics investment opportunities of 2017,’’ Martyn Roberts, the company’s group chief financial officer, said. ‘‘The covenant offers unparalleled strength and security, including a 20-year weighted average lease expiry, significant net passing income with fixed annual increases on a triple net basis’’.
 
Commonwealth Bank of Australia (CBA):
 
Commonwealth Bank of Australia is encouraging brokers to churn mortgages rather than lose borrowers to competitors which are offering hot incentives to switch lenders, analysis of offers reveals. Commonwealth Bank of Australia is encouraging brokers to churn mortgages rather than lose borrowers to competitors which are offering hot incentives to switch lenders, analysis of offers reveals. It comes as new strategies from major and smaller lenders rapidly emerge in response to changing regulatory, funding and marketing pressures, according to bankers and market analysts. CBA has written to brokers with clients concerned about rising rates to consider seven alternative strategies involving its existing product range. ‘‘With the introduction of new reference [interest] rates for investment home loans and the change to rates for interest-only investment home loans, you may see an increase in customers wanting to switch product types or change their repayment type,’’ the bank said in a memo to mortgage brokers.
 
Downer EDI Limited (DOW):
 
Investment banks are queueing up to get in front of Downer’s board and individual non-executive directors, seeking a seat at the table as the contractor tries to dig its way out of a $2 billion-plus conundrum over its Spotless offer. Bulge brackets and ‘‘independent’’ firms are both known to be spruiking their wares. Also chasing the ambulance will be hedge funds, which are able to short the stock for the first time since the deal was announced. If week one in the Downer/Spotless takeover saga was about chasing the deal, week two is about chasing the ambulance. Investment banks are queuing up to get in front of Downer’s board and individual non-executive directors, seeking a seat at the table as the contractor tries to dig its way out of a $2 billion-plus conundrum. The would-be advisers’ pitch is pretty straightforward. Downer’s existing bank, UBS, is conflicted because it has to manage its own risk around the $1 billion rights issue. UBS was sole underwriter to both the institutional and retail offers. The institutional offer came up $268 million short, while the retail shortfall could be a similar size with the stock trading 7 per cent below the entitlement offer price.
 
Harvey Norman Holding Limited (HVN):
 
Harvey Norman shares edged higher on Friday following retailer’s disclosure late on Thursday night that its financial accounts are being reviewed by the corporate regulator. The stock (HVN) finished three cents higher on Friday at $4.38 after falling more than 2.1 per cent to an intraday low of $4.26 — their lowest level for the week. The Thursday statement came after Harvey Norman said it was contacted by ASIC on Wednesday evening and asked to make a clarifying statement about an announcement earlier in the week. Harvey Norman shares dropped eight per cent on Monday after the AFR article was published, gained three per cent on Tuesday after it rejected to the article’s claim, and dropped another three per cent on Wednesday and Thursday.
 
Mirvac Group (MGR):
 
Sydney’s new apartments sold well over the weekend even as buyers deliberated over their purchases against possible macroprudential changes in bank lending. Sales were calm and steady across several off-the-plan launches across the city, except for Mirvac’s Pavilions launch at Sydney Olympic Park, which saw the return of big early-morning queues mainly first home buyers. Just before 7am on Saturday, they lined up to purchase one of Mirvac’s 60 first home buyer only apartments. Mirvac’s first housing affordability initiative, ‘‘The Right Start’’, gives first home buyers first dibs at 60 of the lowest-priced apartments priced below $750,000 with 5 per cent deposit, half the group’s usual requirement. The remaining 5 per cent deposit would be paid in two annual instalments. As many as 54 of those units sold on Saturday, but even with easier payment options, many buyers sought assistance from parents and families.
 
National Australia Bank Limited (NAB):
 
For a group that likes to rely on facts and figures, stock pickers can be a superstitious lot. Christmas rallies and selling in May are not the sort of ideas born of considered analysis. Another piece of investing folklore that has been popular with Australian investors is that NAB should be cheaper than its big four rivals. But there is a good argument to say NAB is no longer the bank it once was and it’s time we did away with that myth once and for all. Like most superstitions, there are substantial historical reasons for the existence of the myth. It’s true that NAB has been a serial disappointment for shareholders over different periods. During the global financial crisis the bank’s decision to write down almost a billion dollars’ worth of CDOs was yet another blow to its reputation and the perception that NAB was a lower quality bank persisted.
(Source: AIMS)
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