AGL Energy Limited (AGL):
Treasurer Scott Morrison told the energy companies the government would act if they do not meet commitments to help consumers cut their costs (Libs, energy chiefs agree certainty key to price fix, August 11). But it is government failure (as economists describe it) that is occurring across the entire energy pricing sector. If lower priorities were given to emission reduction imperatives, that would help reduce electricity prices. We also now learn that electricity retailer AGL has benefited by using the government controlled pricing sector to achieve a 14 per cent increase in profit. How come that as a customer of AGL I was advised a day before it announced its profit surge that I had been ‘‘mistakenly’’ receiving additional discounts on my bill and that these would be ‘‘corrected’’ on August 17.
Australia and New Zealand Banking Group (ANZ); National Australia Bank Limited (NAB); Westpac Banking Corporation (WBC):
Westpac’s head of consumer banking, George Frazis, says the big banks must own up to mistakes as early as possible to ensure the right systems are in place so errors are not repeated. While Mr Frazis would not respond directly to the Commonwealth Bank’s handling of money laundering allegations, he said the large volume of transactions handled by major institutions meant mistakes were inevitable. The Australian Financial Review reported last week that other banks including Westpac and ANZ were used by money laundering syndicates identified in AUSTRAC’s statement of claim against CBA. Westpac said it was confident it had reported all suspicious transactions. Mr Frazis said he was unaware of any issues and Westpac was constantly looking at ways to make its systems more robust. The bank invests more than $1 billion a year, with about a third of that spent on complaints.
Aurizon Holdings Ltd (AZJ):
Pacific National has its nose in front in the auction for Aurizon Holdings’ intermodal business. As Aurizon chief Andrew Harding prepares to front investors with the company’s full-year result on Monday, he will also address the long-running freight review and plans for its intermodal and bulk freight businesses. GIP acquired a 27 per cent stake in the rail group as part of Asciano’s takeover last year, while Canada Pension Plan Investment Board, China’s CIC Capital, Singapore’s GIC and Canada’s British Columbia Investment Management Corporation are also on the shareholder register. Aurizon chief executive Andrew Harding is expected to deliver a net loss and to outline plans for the company’s troubled freight business when he presents the rail group’s annual results for the first time on Monday. Analysts are forecasting a net loss of about $188 million for 2016-17 after Aurizon revealed last month that it would take $554 million of impairment charges, mostly on its bulk haulage business, in addition to $236 million of impairment charges previously announced in January. The impairments will force the group to a net loss compared with a net profit of $72 million in 2015-16. Aurizon has already disclosed underlying earnings before interest and tax will be $836 million, within its forecast guidance but down on last year’s $871 million.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank of Australia shareholders may seek some solace from the group’s savvy play in the aircraft leasing sector. Amid the controversy around AUSTRAC’s court action against CBA, on failures to stem money laundering and terror financing, Street Talk understands the bank has quietly racked up a nice pay day at US-listed Air Lease Corporation. CBA has sold out of its more than 6 per cent stake in Air Lease in recent months, netting the bank gross profits of as much as$US113.2million($143.4million). It is understood the holding was sold down in tranches over time at an average price saidtobe$US37.36.
Event Hospitality and Entertainment Limited (EVT):
The release of Event Hospitality & Entertainment’s annual results on August 24 could be something of a baptism of fire for new chief executive Jane Hastings, with Citi forecasting a 17 per fall in full-year net profits and recommending Ms Hastings consider selling its German cinema business. The Citi report, authored by analyst Sam Teeger, forecast net profit after tax at Event of $108 million, well down on the record profit of $130.2 million reported in financial year 2016 when the company was enjoying the full fruits of the tourism boom. Citi maintained its sell recommendation on Event, but with a slightly higher target price of $11.05. Event shares rose 1.4 per cent to $12.74 on Friday.
Fairfax Media Limited (FXJ); News Corp (NWS):
The majority of Australians are concerned about being exposed to fake news but only a tenth are willing to pay for news online, according to a new survey. Deloitte’s sixth annual Media Consumer Survey showed 65 per cent of respondents were concerned about being exposed to fake news and 77 per cent believe they already have. But 90 per cent of respondents said they were not willing to pay for news because so much information is already available on the internet for free. Traditional publishers such as Fairfax Media, publisher of The Australian Financial Review, and News Corp have been faced with a structural dilemma. They need to get more people to pay for news online because the value of digital advertising comes nowhere close to replacing the dollars lost from print advertising. Much of the new online advertising spend is going to Silicon Valley giants Facebook and Google.
Mcgrath Ltd (MEA):
Real estate agents and the evolving proptech sector are taking advantage of a resilient market for detached houses ahead of an expected weakening in apartment construction. Listed estate agency McGrath is setting up a standalone business to sell newly released land in Sydney’s northwest. Grant Simpson, the principal of McGrath’s Rouse Hill office, will head the McGrath Land business, which could start signing up new franchisees within the next four to six weeks. ‘‘We see great potential for growth in the land sales market, particularly in the north-west corridor of Sydney, and will continue to consider launching McGrath Land as a separate brand extension,’’ said Chris Mourd, McGrath’s head of franchise network.
Medibank Private Limited (MPL); Slater & Gordon:
VGI Partners, the Sydney and New York-based fund manager, has a reputation for picking the market’s winners and losers. In its nine-year history, the fund has never had a larger share of short positions than it does now. VGI had a concentrated portfolio of mainly global stocks. It has stakes in Amazon, Mastercard, Chicago exchange CME, online real-estate site Zillow, WD-40 and the Boston Beer Company. VGI also has a large holding in ASX listed Medibank. In recent years it has gained a reputation as a shrewd short seller of Australian and international stocks and famously profited from the fall in Slater & Gordon shares. The fund has about 70 per cent of its assets in ‘‘long’’ stock positions and 25 per cent short, for a net long exposure of 45 per cent, according to its annual letter to investors.
(Source: AIMS)
Treasurer Scott Morrison told the energy companies the government would act if they do not meet commitments to help consumers cut their costs (Libs, energy chiefs agree certainty key to price fix, August 11). But it is government failure (as economists describe it) that is occurring across the entire energy pricing sector. If lower priorities were given to emission reduction imperatives, that would help reduce electricity prices. We also now learn that electricity retailer AGL has benefited by using the government controlled pricing sector to achieve a 14 per cent increase in profit. How come that as a customer of AGL I was advised a day before it announced its profit surge that I had been ‘‘mistakenly’’ receiving additional discounts on my bill and that these would be ‘‘corrected’’ on August 17.
Australia and New Zealand Banking Group (ANZ); National Australia Bank Limited (NAB); Westpac Banking Corporation (WBC):
Westpac’s head of consumer banking, George Frazis, says the big banks must own up to mistakes as early as possible to ensure the right systems are in place so errors are not repeated. While Mr Frazis would not respond directly to the Commonwealth Bank’s handling of money laundering allegations, he said the large volume of transactions handled by major institutions meant mistakes were inevitable. The Australian Financial Review reported last week that other banks including Westpac and ANZ were used by money laundering syndicates identified in AUSTRAC’s statement of claim against CBA. Westpac said it was confident it had reported all suspicious transactions. Mr Frazis said he was unaware of any issues and Westpac was constantly looking at ways to make its systems more robust. The bank invests more than $1 billion a year, with about a third of that spent on complaints.
Aurizon Holdings Ltd (AZJ):
Pacific National has its nose in front in the auction for Aurizon Holdings’ intermodal business. As Aurizon chief Andrew Harding prepares to front investors with the company’s full-year result on Monday, he will also address the long-running freight review and plans for its intermodal and bulk freight businesses. GIP acquired a 27 per cent stake in the rail group as part of Asciano’s takeover last year, while Canada Pension Plan Investment Board, China’s CIC Capital, Singapore’s GIC and Canada’s British Columbia Investment Management Corporation are also on the shareholder register. Aurizon chief executive Andrew Harding is expected to deliver a net loss and to outline plans for the company’s troubled freight business when he presents the rail group’s annual results for the first time on Monday. Analysts are forecasting a net loss of about $188 million for 2016-17 after Aurizon revealed last month that it would take $554 million of impairment charges, mostly on its bulk haulage business, in addition to $236 million of impairment charges previously announced in January. The impairments will force the group to a net loss compared with a net profit of $72 million in 2015-16. Aurizon has already disclosed underlying earnings before interest and tax will be $836 million, within its forecast guidance but down on last year’s $871 million.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank of Australia shareholders may seek some solace from the group’s savvy play in the aircraft leasing sector. Amid the controversy around AUSTRAC’s court action against CBA, on failures to stem money laundering and terror financing, Street Talk understands the bank has quietly racked up a nice pay day at US-listed Air Lease Corporation. CBA has sold out of its more than 6 per cent stake in Air Lease in recent months, netting the bank gross profits of as much as$US113.2million($143.4million). It is understood the holding was sold down in tranches over time at an average price saidtobe$US37.36.
Event Hospitality and Entertainment Limited (EVT):
The release of Event Hospitality & Entertainment’s annual results on August 24 could be something of a baptism of fire for new chief executive Jane Hastings, with Citi forecasting a 17 per fall in full-year net profits and recommending Ms Hastings consider selling its German cinema business. The Citi report, authored by analyst Sam Teeger, forecast net profit after tax at Event of $108 million, well down on the record profit of $130.2 million reported in financial year 2016 when the company was enjoying the full fruits of the tourism boom. Citi maintained its sell recommendation on Event, but with a slightly higher target price of $11.05. Event shares rose 1.4 per cent to $12.74 on Friday.
Fairfax Media Limited (FXJ); News Corp (NWS):
The majority of Australians are concerned about being exposed to fake news but only a tenth are willing to pay for news online, according to a new survey. Deloitte’s sixth annual Media Consumer Survey showed 65 per cent of respondents were concerned about being exposed to fake news and 77 per cent believe they already have. But 90 per cent of respondents said they were not willing to pay for news because so much information is already available on the internet for free. Traditional publishers such as Fairfax Media, publisher of The Australian Financial Review, and News Corp have been faced with a structural dilemma. They need to get more people to pay for news online because the value of digital advertising comes nowhere close to replacing the dollars lost from print advertising. Much of the new online advertising spend is going to Silicon Valley giants Facebook and Google.
Mcgrath Ltd (MEA):
Real estate agents and the evolving proptech sector are taking advantage of a resilient market for detached houses ahead of an expected weakening in apartment construction. Listed estate agency McGrath is setting up a standalone business to sell newly released land in Sydney’s northwest. Grant Simpson, the principal of McGrath’s Rouse Hill office, will head the McGrath Land business, which could start signing up new franchisees within the next four to six weeks. ‘‘We see great potential for growth in the land sales market, particularly in the north-west corridor of Sydney, and will continue to consider launching McGrath Land as a separate brand extension,’’ said Chris Mourd, McGrath’s head of franchise network.
Medibank Private Limited (MPL); Slater & Gordon:
VGI Partners, the Sydney and New York-based fund manager, has a reputation for picking the market’s winners and losers. In its nine-year history, the fund has never had a larger share of short positions than it does now. VGI had a concentrated portfolio of mainly global stocks. It has stakes in Amazon, Mastercard, Chicago exchange CME, online real-estate site Zillow, WD-40 and the Boston Beer Company. VGI also has a large holding in ASX listed Medibank. In recent years it has gained a reputation as a shrewd short seller of Australian and international stocks and famously profited from the fall in Slater & Gordon shares. The fund has about 70 per cent of its assets in ‘‘long’’ stock positions and 25 per cent short, for a net long exposure of 45 per cent, according to its annual letter to investors.
(Source: AIMS)
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