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Markets Live: CBA record not enough

Date

Patrick Commins, Jens Meyer

Shares fell, pulled down by the IT sector and CBA as investors decided the bank's record profit wasn't enough to justify the high valuation.

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High time to call it a day and get some rest ahead of another big earnings day. We'll be back at the usual time, 9am.

Here's the evening wrap of today's session.

Thanks everyone for reading this blog and posting your many comments.

Venture capitalist Mark Carnegie says fund managers have "shown a history of talking big in quietened rooms and then acting cowardly."

Venture capitalist Mark Carnegie says fund managers have "shown a history of talking big in quietened rooms and then acting cowardly."

Insider trading rules are stymieing shareholder activism in Australia, fostering a culture of bad management in the nation's listed companies and curbing growth, prominent investor and venture capitalist Mark Carnegie says.

Shareholders trying to shake up underperfoming boards struggle to build support among fund managers, who are prevented from buying or selling stock if they know a deal is planned but hasn't been announced, Carnegie said in an interview in Sydney this week.

"The sorts of unofficial communications that happen in the US and England are unable to happen in Australia," says Carnegie, whose advisory firm Carnegie, Wylie & Co. was sold to Lazard in 2007. "You need to be very, very sure of your ground in terms of the number of shareholders who will vote with you before you start your campaign, and that's what people have found hard."

Read more

Today was this earnings season's biggest day so far and a lot of the company's reporting came under pressure:

  • CBA: -0.9% at $80.96
  • CSL: +2.6% at $67.24
  • Computershare: -6.2% at $11.84
  • Carsales.com: -6.2% at $10.50
  • Primary Health Care: -4.2% at $4.62
  • Oz Minerals: -4.2% at $4.29
  • Echo: +3.1% at $3.30
  • Goodman: -1.6% at 63 cents
  • Amcom: -5.6% at 1$1.85
  • Suncorp: +2.6% at $14.49

And here are the biggest winners and losers among the top 200 stocks:

Best and worst performers in the ASX 200 today.

Best and worst performers in the ASX 200 today.

The sharemarket has closed lower, pulled down by CBA after the bank's bumper result failed to spark buying in a stock considered to be expensive.

The benchmark S&P/ASX200 fell 15.6 points, or 0.3 per cent, to 5514.7, while the broader All Ords lost 15.2 points, or 0.3 per cent, to 5507.9.

Among the sectors, IT plunged 5.5 per cent due to several disappointing earnings, materials lost 1.1 per cent and financials closed flat.

Dexus Property Group, which releases its full year results tomorrow morning, has raised $190 million from the sale of 5-13 Rosebery Avenue and 25-55 Rothschild Avenue in Rosebery, NSW.

The total sale proceeds, worth about $17 million, will be included in the in 2015 and and increase to $74 million in the 2016 earnings.

In addition, its 50 Carrington Street, Sydney, worth about $88 million, is also under contract and is expected to contribute about $12 million to 2015 trading profits.

Qantas has launched a new website and online mall for its frequent flyer program as part of an effort to boost engagement with customers and revenue from its loyalty partners.

Qantas Loyalty’s new website Qantas Points will serve as a hub for its frequent flyer program, which now has 10 million members. It will also allow members to earn points from a mix of retail partners including Apple, eBay, David Jones, Neiman Marcus, The Iconic and Selfridges.

Qantas will receive revenue from the retail partners, which buy points from the loyalty program to help attract business to their websites. David Jones and Neiman Marcus are offering five points for each $1 spent on items, but Apple and eBay are offering two points for every $1.

The loyalty division is forecast to be the airline’s highest earner when its full-year results are released on August 28. CIMB expects the business to report operating earnings before interest and tax of $295 million, compared with a forecast total pre-tax loss of $770 million for Qantas.

More eco data out of China: the country's industrial output rose 9 per cent in July from a year earlier, as expected, while retail sales climbed 12.2 per cent, a shade below forecasts.

Fixed-asset investment, an important driver of economic activity, also missed forecasts, growing 17 per cent in the first seven months from the same period last year, the National Bureau of Statistics said on Wednesday.

Economists had forecast industrial output to rise 9 per cent and retail sales to rise 12.4 per cent. Fixed-asset investment for the January-July period was seen up 17.4 per cent.

China's annual economic growth cooled to an 18-month low of 7.4 per cent in the first quarter of 2014 but edged back up to 7.5 per cent in the second quarter thanks to a flurry of government stimulus measures.

Some economists believe further stimulus may be needed to sustain the recovery and offset the drag from the cooling property market.

Commonwealth Bank has delivered a huge dividend, despite concerns new capital requirements could curb shareholder returns. Clancy Yeates and James Eyers discuss.

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CBA whopper dividend defies capital fears

The Commonwealth Bank has delivered a huge dividend, despite concerns new capital requirements could curb shareholder returns. AFR's Clancy Yeates and James Eyers discuss.

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A farmer co-operative in northern New South Wales has a relatively simple plan to capitalise on Asia’s fast-growing middle class.

While some dairy manufacturers are focusing on exporting high-margin and high-value added products such as infant formula, Norco has pinned its hopes on dairy’s most basic ingredient – milk.

The company has begun flying fresh milk direct to Shanghai, where it is fetching $8 to $9 a litre. It is exporting about 16,000 litres a week to China, after a 1000-litre trial in March, and the demand is growing. About every two weeks, the co-operative gains another four Chinese customers.

“Some of the numbers that are being put to us are like telephone numbers in terms of potential,” Norco chief executive Brett Kelly said.

"The market we are targeting is the middle class. They’re pretty well educated, quite financially well off and very, very focused on quality of products."

Norco hopes to  increase fresh milk exports to China to 20 million litres a year in the next 12 months which would account for about 10 per cent of the co-operative’s total production.

Read more

 Milk ahoy: Norco is flying about 16,000 litres of fresh milk a week into Shanghai, and says the demand is growing.

Milk ahoy: Norco is flying about 16,000 litres of fresh milk a week into Shanghai, and says the demand is growing. Photo: Wolter Peeters

The surprisingly weak Chinese monetary data (see post at 1.55pm) should not be viewed lightly, ANZ notes in a snap analysis:

  • It means that the financial system is engaging a rapid de-leveraging process, which could have significant repercussions on the real economy.
  • Such a sharp drop in credit is in fact a quantitative tightening, which will lead to high interest rates and endanger China’s macroeconomic objective.
  • Furthermore, it also suggests that the past monetary policy tweaks have not worked as intended. Although the PBoC has been always reluctant to ease, China's macroeconomic objective will eventually outweigh the current monetary policy inertia. We believe a RRR (reserve ratio requirement) cut is imminent in order to restore confidence.
  • The data suggest that the country's commercial banks experienced a ‘sudden stop’ in credit extensions prompted by a significant increase in risk aversion.
  • Even before this occurrence, commercial banks had tightened their credit exposure to certain industries and had started to shun commodity financing.
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Hong Kong’s SpeedCast has eased about 2 per cent today after jumping 7.1 per cent on yesterday's ASX  debut.

The other new listing to hit the local boards on Tuesday was Melbourne-based biotech Orthocell. The company, which sells customised stem cell therapies for tendon injuries is trading flat today after losing 10 per cent in its first session.

Read more

Transpacific Industries has entered a trading halt as the waste handler gets set to announce changes to its provision for landfill remediation.

Last month, the company finalised the sale of its New Zealand business to China’s Beijing Capital Group for $880 million and completed a debt refinancing.

“The trading halt is requested pending an announcement by the company in relation to the adequacy of its provision for remediation of landfill assets, following a review of these provisions initiated by management,” Transpacific said in a statement to the ASX on Wednesday.

Transpacific is carrying its provision for remediation at $31.9 million, according to its 2012-13 accounts.

The nation’s biggest waste management company owns and operates a number of landfills in Australia.

Once a landfill is closed, environment and government regulators require the site to be kept in a certain condition, for which remediation expense provisions are required.

 

Coal miners have spent the past two years desperately cutting costs in a bid to survive falling prices, but this strategy is running out of steam.

While coal miners have been successful in lowering costs, they still haven't managed to do it anywhere near as fast as prices have declined, and now the scope for further costs reductions is limited.

It's likely that mining costs will start to rise again in the next year or two as the current round of cost-cutting has led to under-investment and a focus on extracting the easiest, or cheapest, to mine coal.

While coal miners are by nature a tough bunch, the prevailing sentiment at this week's Coaltrans Australia conference in Brisbane was that prices need to increase soon or more mines will have to be shut, or placed on care and maintenance.

Data from consultants CRU illustrates the problem for coal miners in Australia, which is the world's largest exporter of coking coal used in steel-making, and number two in thermal coal used in power plants.

This shows that mining costs have fallen, but only marginally, with site costs in New South Wales state dropping from around $65 a tonne in 2012 to $63 a tonne this year, while those in the other major producing state, Queensland, fell from about $61 to $60.

The dramatic slide in prices was mainly because miners reacted to the post-2008 rally by putting on more supply, a situation that has persisted as they try to lower unit costs by boosting output, even as demand growth from top importer China flatlines.

This has led to a significant amount of coal production being loss-making, and while there are slight variations between analysts, the overall consensus is that at least 30 per cent of Australian output is currently loss-making on a cash-operating basis.

Read more at Reuters.

Dumped: oversupply in coking and thermal coal markets is putting pressure on mining stocks. Photo: Robert Rough

Dumped: oversupply in coking and thermal coal markets is putting pressure on mining stocks. Photo: Robert Rough

CBA, the nation’s largest home loan provider, has dismissed suggestions of a housing bubble, claiming recent investor interest in housing was “a rational response to the low interest rate environment created by the central banks”.

“Factors that characterise a house price bubble, such as rapid credit growth, an easing in lending standards and expectations of rapidly rising prices are either not evident or evident only to a limited extent,” the bank said in its full-year results presentation.

The comments came as the bank reported another strong earnings result and a day after official data showed house prices in Australia’s capital cities had increased by more than 10 per cent over the year.

The bank laid out five points as to why the housing market was not in bubble territory in its presentation to analysts. They were: 

  1. There’s more demand than supply, especially as Australia’s population grows and the supply side is responding;
  2. Low interest rates had led to rising risk appetite and the pursuit of yield;
  3. Lending standards are tight in Australia, more so since the GFC;
  4. Housing credit growth is subdued as most borrowers get ahead on mortgage payments. Banks are building in interest rate buffers in writing new loans;
  5. The Australian economic growth outlook is respectable with low unemployment and arrears.

The bank also said there was a natural correction mechanism at work in the housing market. Rising house prices and the additional supply of houses would increase vacancy rates and reduce rents. Also a rise in house prices would lower housing affordability and place a cap on rents.

CBA added Australia has among the highest urban populations in the world with almost 40 per cent of the nation living in Melbourne and Sydney – something which needed to be considered in evaluating local house prices.

There's no evidence of a housing price bubble says CBA.

There's no evidence of a housing price bubble says CBA. Photo: Glenn Hunt

China’s broadest measure of new credit unexpectedly plunged to the lowest level since the global financial crisis, adding risks to economic growth already headed for the weakest annual pace in 24 years.

Aggregate financing was 273.1 billion yuan ($US44.3 billion) in July, the People’s Bank of China said today in Beijing, compared with the 1.5 trillion yuan median estimate of analysts surveyed by Bloomberg News.

New local-currency loans of 385.2 billion yuan were half of projections, while M2 money supply grew a less-than-anticipated 13.5 per cent from a year earlier.

Chinese stocks fell after the credit slowdown joined a property slump in testing Premier Li Keqiang’s economic-expansion target of about 7.5 percent this year. The PBOC said the drop in financing resulted from regulation and control of risks, and not because of a change in monetary policy.

“The numbers reflect both tightened regulation over certain financing activities and an underlying weak economy,” said Zhang Bin, an economist in Beijing with the state-run Chinese Academy of Social Sciences. “There’s still no real recovery in growth - at best, we can say that economic performance is stabilizing at a low level.”

The Shanghai Composite Index reversed gains following the data and is down 0.6 per cent.

New yuan loans have been running at 30 billion yuan to 50 billion yuan a day in the first 10 days of August, the PBOC said in a statement on its website. The direction of monetary policy isn’t changing and major financial indicators in July remained in a reasonable range, the central bank said.

“Money supply, credit and aggregate financing are expected to maintain stable growth in the future,” the PBOC said.

Bank of America Merrill Lynch analysts have weighed into the Rio Tinto capital return debate, saying the miner will have $US4.1 billion, or $US2.20 a share, surplus capital by December 31.

And, importantly for shareholders, BAML reckons Rio Tinto will return the cash to shareholders through increases in regular dividends and an on-market buyback of the London-listed (PLC) stock.

Rio Tinto flagged increased returns to shareholders at its half-year results last week, but stopped short of saying exactly how much it would hand back or in what form.

Analysts have met with Rio Tinto chief financial officer Chris Lynch and ion ore division numbers man Paul Shannon in recent days, and said shareholder returns had featured prominently in discussions.

“Rio has indicated they are comfortable with the current balance sheet position (1H14 net debt of $US16.1 billion) and have stated they will materially increase cash returns to shareholders, but did not disclose the quantum or form of any capital returns,” BAML analysts told clients on Wednesday morning.

“Big picture, we interpret this to mean that RIO plans to return all available cash flows after capex to shareholders.” 

BAML said Rio Tinto would have $US4.1 billion surplus capital by December 2015, assuming there was no material increase in its 2013 calendar year dividend of $US1.92 a share.

If Rio increased its current year dividend to $US2.12, as is the consensus analyst expectation, BAML said Rio Tinto would have $US3.4 billion surplus cash by the end of 2015.

Either way, it is a lot of money to return to shareholders.

“The thinking regarding a special dividend would include management preference in not wanting to risk the balance sheet with a large step-up in the progressive dividend policy,” the analysts said.

Firing:  Industry stalwart Wolf Blass has strong views on Treasury's future.

Firing: Industry stalwart Wolf Blass has strong views on Treasury's future.

Wolf Blass, the man behind one of Treasury Wine Estate’s most successful international brands, says whoever ends up buying the company needs to quickly sell off the ailing US operations because it has been a “nightmare from day one’’.

Mr Blass, who is still part of the Treasury stable as an “ambassador’’ for the brand, said he had told the board for years it needed to sell the US business because it was such a drain on return on investment, but it refused to listen.

“America has been a nightmare from day one,’’ Mr Blass said.

Mr Blass also said if either private equity bidder, Kohlberg Kravis Roberts or TPG Capital, gains control of Treasury they should do likewise and offload the US business.

But he warned any move by new private equity owners to make short-term decisions with the broader Treasury business would have a harmful impact on the Australian wine industry.

“That could be harmful, if they’re in it for a fast buck,’’ he said.

Read more.

China’s richest man, Wang Jianlin, has committed $HK12.5 billion ($1.7 billion) to invest in Australian real estate including the construction of a $900 million beachfront resort on the Gold Coast.

Property experts say the deal could herald a new dawn of Chinese property investment in Australia.

Mr Wang, the chairman of the Hong Kong-listed Wanda Group, took over the top spot on the Forbes China Rich List for the first time last year after a rebound in property prices.

In a statement to the exchange, Wanda said it would pay for the new resort, known as The Jewel, through internal resources and a mixture of debt and equity.

Mr Wang’s Wanda has already been on a global buying spree picking up London high rises as well as US movie chain AMC Entertainment and ­Sunseeker yachts.

The Jewel has state approval for up to three high-rise buildings containing a resort hotel, apartments, office and recording studio, restaurants and cafes. The site can accommodate a total building area of up to 147,000 square meters.

The decision by Wanda represents the financial power of the Chinese investors and their expectation of exponential growth in Chinese tourists over the next decade.

Read more.

Billionaire Wang Jianlin is starting an upmarket Chinese hotel brand in Australia with a $900 million resort on the Gold Coast.

Billionaire Wang Jianlin is starting an upmarket Chinese hotel brand in Australia with a $900 million resort on the Gold Coast. Photo: Bloomberg

Foster Stockbroking reckons Atlas Iron is an obvious takeover candidate following this week’s $250 million bid from BC Iron for Iron Ore Holdings. This follows the successful Aurizon-Baosteel bid for Aquila Resources in May.

“What was pertinent for both bids was that the targeted companies possessed assets requiring significant capital investment, but were being heavily discounted by the market,” the broker writes in a research note to clients.

“Atlas Iron is another Pilbara player where the market seems to give little plausibility on its expansion plans being crystallised.”

Atlas Iron has recently established itself as a 12 million tonne a year producer from the Pilbara, of late completing its Stage 1 development at Mt Webber. The company’s Stage 2 completion is expected in the December 2014 quarter, by which time Atlas will be targeting production of 15 million tonnes a year.

“To go beyond 15Mtpa production, Atlas most likely needs a partner that can assist in providing an infrastructure solution, particularly concerning rail, to unlock its sizeable resources,” Foster Stockbroking reckons.

Potential interested parties in Atlas Iron would likely include Fortescue Metals Group and Hancock – which have their own rail networks – X2 Resources, Anglo American, “and Glencore – who may seek to establish Pilbara operations, and other China steelmakers similar to Baosteel, who would be keen for off-take.”

The analysts at Foster Stockbroking say Atlas Iron’s depressed share price offers an opportunistic entry. ”The company is an attractive entry into the play on iron ore prices turning around, while crystallisation of an infrastructure solution would certainly enhance costs efficiencies.”

With a market worth of just $67 million after its share price collapsed earlier in the year when it halted key research work, Reva Medical has now flagged a $US25 million raising in October.

The raising is likely to centre on a placement, since it told analysts this morning the raising will need shareholder approval, which is typically needed if more than 10 per cent of the shares is issued in a 12 month period.

Reva is trying to develop a bioabsorbable synthetic stent which would replace metal stents when used in blood arteries. But it is yet to get its polymer stent down to the thinness achieved by metal.

It won't have data to hand from its next round of trials until sometime in 2016, so without a corporate deal emerging, shareholders may need extreme patience.

Consumer confidence has picked up - but it’s still not near the optimistic levels business sentiment has hit. Su-Lin Ong from RBC Capital Markets explains why and what this means for the RBA:

  • The two series usually converge, albeit with a lag, and we may be seeing some signs of this following the fallout from the 2014–15 budget. However, we remain cautious on the consumer front.
  • We see limited scope for further substantial gains in consumer confidence. And, we worry that any further convergence in these two data sets may be driven more by a decline in business confidence as budget/policy paralysis returns to the forefront of attention and amid a lacklustre economy which is simply muddling along.
  • There are a couple of implications for the RBA. Firstly, confidence may become increasingly important in the policy debate as alluded to by the Governor at a recent speech to the ABE which touched on ‘animal spirits’.
  • Secondly, business confidence is a critical part of the discussion around the expected pickup in non-mining investment.
While still far apart, the gap between business and consumer confidence has narrowed. Source: RBC Capital Markets

While still far apart, the gap between business and consumer confidence has narrowed. Source: RBC Capital Markets

Wages continue to grow at a very subdued pace (see chart below), with the latest wage price index from the ABS showing another decline in growth in salaries to 0.6 per cent over the June quarter, against 0.7 per cent over the March quarter, on seasonally adjusted numbers.

Annual wage growth is steady at 2.6 per cent, below consumer price inflation of 3 per cent, suggesting that real wages are still in retreat.

CBA's bumper profit is better quality than expected, but it's still difficult to see how this can sustain the stock's premium share rating, Credit Suisse analysts write in a note. Here's their takeaway:

What CS liked about this result:

  1. Stable 2H14 net interest margin
  2. Flat 2H14 costs
  3. Strong equity Tier 1 ratio rebound to 9.30% (8.54% 1H14) (property transactions releasing about $1bn / 0.28%) with a DRP buy-back announced
  4. Improved impairds ratio.

 

What CS didn't like

  1. Soft 2H14 operating income (sequentially flat, +1% ex financial markets income)
  2. Declining collective provision coverage of RWA 0.90% (0.94% 1H14).

 

CS on valuation: CBA currently trades on 15.3x 12mth prospective earnings (15% premium to the major banks vs. a 12% four-year average premium) and a corresponding book multiple of 2.7x

Global share registry Computershare has met expectations with a 9.9 per cent rise in underlying net profit after tax to US$335 million, driven by cost reductions and acquisitions.

But despite higher corporate activity in M&A and new listings, which heavily influences the company’s earnings, registry revenue was flat due to reduced yields from investment of client balances and analysts were disappointed at forecast earnings.

The company’s share price has slumped 4.3 per cent to 12.08.

Statutory profits have swung around from a 9.2 per cent fall in 2013 to a 60 per cent rise to US$251.4 million in 2014 – almost US$100 million higher than in 2013.

But revenue was down slightly by 0.1 per cent to just over $2 billion.

So-called “management” earnings per share, which removes one off non-cash costs for the year, was at the upper range of the company’s guidance, coming in at 9.8 per cent to 60.24 per cent.

New CEO Stuart Irving gave a lower forecast for earnings per share for the 2015 financial year than for this year, saying it would be around a 5 per cent gain compared to 5 to 10 per cent for 2014.

“The big things that will affect the numbers is what is going to happen with interest rates and also corporate actions,” he said. “There is a sentiment that the corporate actions or mergers or IPO market is on the way up.”

But he noted there have been several large planned listings that have not eventuated. He also said there were a couple of “headwinds”. Its business services division had a slight drop in revenues. This was due to weak market activity in the bankruptcy administration business in the US and the loss of a major contract with APG for its Serviceworks outsourcing business.

It surged a mouthwatering 8 per cent Tuesday on results that contained no hidden surprises, and Bradken shares have rallied another 3.2 per cent to $4.81 so far today.

And broker Bell Potter reckons there's more to come.

It has raised its target price to $4.98 from $4.49, arguing that earnings growth will be maintained as the heavy engineer "reverts to the norm of growing earnings at the EBITDA level through cost reductions not revenue growth".

This is the key since revenue growth is expected to be anemic, at best – a point analysts at Deutsche Bank also highlight, as they maintain their “hold” recommendation and a price target of $4.60.

“Beyond any initial re-stocking led pick-up in demand we see longer term industry structure and competitive issues as placing limits on growth, with the likelihood of a meaningful recovery low,” they write in a note to clients.

“The outlook remains patchy and subject to continuing pressure in the mining industry supply chain, although near term stabilisation and cost out supports our FY15 growth expectations.”

They forecast EBITDA to grow by 8 per cent in the coming financial year, “implying little underlying growth for the business”.

 

Writes BusinessDay columnist Mal Maiden:

CBA has produced a profit that is great for shareholders.

But it is a politically inconvenient one, as the bank faces heightened scrutiny over its financial planning division and all the big banks push back against the possibility that the Murray inquiry into the financial system will recommend new curbs on their activities.

The June year result was broadly as expecteda 12 per cent increase in cash earnings to $8.68 billion and a final fully-franked dividend of $2.18 a share that took the annual payout to a 10 per cent higher $4.01 a share. Shareholders on the books on August 21 will get the final payout on October 2.

CBA’s profitability is going to make waves, however.

It’s not the size of the profit itself: $8.68 billion is a huge number, but the CBA is also a huge organisation. In a market that again displayed the post-global crisis characteristic of slow credit growth, it boosted average interest earning assets by $52 billion, to a massive $705 billion.

The politically inconvenient number is the return on equity that CBA's cash profit generates. It is a measure of profitability, not gross profit, and in the June year it rose by a half a percentage point, to 18.7 per cent. 

The CBA has produced better returns on equity in the past. It returned 21.5 per cent in 2005-2006, and 21.7 per cent in 2006-07, ahead of the global crisis for example. Its return on equity fell to 15.8 per cent in 2008-09 as the crisis pushed loan losses higher, but climbed back up to 19.5 per cent in 2010-2011 as the world and the bank climbed away from the crisis.

The broader points however are that CBA’s return on equity is climbing, better than the other 3 big banks in this market, and better than almost every other bank in the world

Those are inconvenient facts as CBA and the banks face up to the possibility that the Murray report will recommend tighter capital controls that would crimp earnings

Read more.

CBA's record profit will give plenty of ammunition to those arguing that banks need to be reined in.

CBA's record profit will give plenty of ammunition to those arguing that banks need to be reined in. Photo: Bradley Kanaris

South Africa’s Woolworths Holdings, the new owners of department store David Jones, will strip out underperforming brands and designers from the store floor to make room for it’s own private label range but has vowed to be guided by loyal DJ customers before any brands are junked.

Chief executive Ian Moir said shoppers would notice a change at the chain store over the next nine months as more space was devoted to its Country Road and Trenery lines.

‘‘The decision will be taken purely on which are the [brands] the customers like the most and therefore perform the best, and we will give more space to better performing businesses, whether they are own-brand, private label, concession or an international designer," Mr Moir said. "But it’s the customer who will dictate who gets what space.’’

Woolworths, which last month wrapped up a $2.2 billion takeover of 176-year-old David Jones, would also begin selling from next year its own line of private label fashion that was popular in its home market of South Africa.

However, it would do so without the boss of the past four years Paul Zahra, who stepped down from running David Jones in favour of former Country Road boss Iain Nairn. The management reshuffle came as Woolworths put its mark on the business and set about its operational shift.

‘‘You will see more exciting, newer brands in the store that are seeking to do a different job and better job than the brands that were there previously,’’ Mr Moir said.

Read more.

Ian Moir: "More exciting, newer brands in the store."

Ian Moir: "More exciting, newer brands in the store." Photo: Nic Walker

Japan suffered its biggest economic contraction since the devastating March 2011 earthquake in the April-June quarter as a sales tax hike took a heavy toll on household spending, stoking fears that any rebound may be too modest to sustain a solid recovery.

While the soft data is unlikely to shake the Bank of Japan's conviction that the economy can ride out the tax hike impact, it could add pressure on the bank for further monetary easing if weakness in exports and consumption is prolonged.

The world's third-largest economy shrank an annualised 6.8 per cent in the second quarter, less than a median market forecast for a 7.1 per cent drop and following a 6.1 per cent increase in January-March as consumers spent heavily to avoid the sales tax increase, Cabinet Office data showed.

The second quarter contraction was the biggest decline since the first quarter of 2011, when the devastating earthquake and tsunami struck in March.

On a quarter-to-quarter basis, Japan's economy shrank 1.7 per cent in the second quarter, less than a median market forecast for a 1.8 percent fall, the data showed.

Private consumption, which makes up about 60 per cent of the economy, took a hit from the sales tax hike in April to fall 5.0 per cent in the quarter, more than a median market forecast for a 4.3 per cent drop.

Exports, a main driver of the economy, showed signs of a recovery from recent weakness. External demand added 1.1 percentage points to economic growth, after shaving 0.2 percentage point off growth in the first quarter.

The BOJ has kept monetary policy steady since deploying an intense burst of stimulus in April last year, when it pledged to double base money via aggressive asset purchases to accelerate inflation to 2 per cent in roughly two years.

Consumer confidence has picked up since May's unpopular Federal budget, though it remains below the highs seen after the coalition swept to power last September, according to the latest Westpac-Melbourne Institute Index of Consumer Sentiment.

The much-followed index, seen as a faithful measure of consumer attitudes, rose 3.8 per cent, from 94.9 in july to 98.5 in August.

Westpac's chief economist Bill Evans said the result was "pleasing".

"Over the last three months, the index has increased by a total of 5.9 per cent, indicating that much of the damage to confidence in the aftermath of the budget has been repaired," he said.

However, the noted that the index had not reclaimed any of the ground lost between November 2013 and April 2014, when much of the enthusiasm over the Coalition victory began to wane.

"The index is still around 10.8 per cent below its post-election peak," he said.

According to Wednesday's results, the index tracking job prospects improved slightly, despite a recent surprise increase in the unemployment rate. The index tracking assessments of 'time to buy a dwelling' jumped by 9.7 per cent to be 12.1 per cent, above its post-budget read.

Consumer sentiment improved for the third consecutive month in August: "a pleasing result" according to Westpac chief economist Bill Evans.

Consumer sentiment improved for the third consecutive month in August: "a pleasing result" according to Westpac chief economist Bill Evans.

Here's how stocks are performing that are in the news this morning:

  • CBA (bumper profit, but not enough): -1% at $80.85
  • CSL: (profit meets expectations): +3.1% at $67.57
  • Oz Minerals (another loss): -2.5% at $4.37
  • Primary Health Care (disappointed): -5.2% at $4.57
  • Echo (strong second half): +3.75% at $3.32
  • Bank of Queensland (surprise CEO exit): -1.6% at $12.02
  • Suncorp (sees growth): +4.3% at $14.725
  • Amcom (results in line): -3.3% at $1.895
  • Crown (buys rest of Betfair): +0.6% at $14.91
  • Carsales (profit slightly below expectations): -6.67% at $10.44
  • Goodman Fielder (sink into red): -0.8% at 63.5 cents

Shares in Carsales have slumped 7.7 per cent in early trade after the company said its full-year net profit after tax rose 14 per cent to $95.5 million.

The online automotive advertising group grew revenue from its core customer base of car dealers, as well as in overseas markets.

Carsales’ group revenue was up by 10 per cent to $235.6 million for fiscal year 2014, while EBITDA grew by 15 per cent to $138.4 million.

Citigroup analyst Justin Diddams had forecast net profit of $99.9 million and revenue of $238.8 million for fiscal year 2014, compared with consensus expectations of $96 million and $239 million respectively.

Revenue from due car dealers was up by 8 per cent compared with previous corresponding period, while the company’s Brazilian Webmotors business and South Korean SKENCARSALES operation grew strongly.

Carsales said net profit rose 14 per cent over the 2014 financial year.

Carsales said net profit rose 14 per cent over the 2014 financial year. Photo: Andrew Quilty

Shares have eased at the open as investors digest a feast of early earnings reports, with CBA the biggest individual drag after dropping 0.9 per cent on its annual results.

The ASX 200 is down 19 points, or 0.4 per cent, to 5510.9, while the All Ords is 0.3 per cent lower, or 18 points, at 5504.7.

Miners are weighing the heaviest, with BHP 0.6 per cent down and Rio 2.1 per cent lower as it trades ex-dividend.

Woolworths is 1.5 per cent lower.

Among the early winners are Suncorp, up 4.5 per cent, and CSL, up 3.8 per cent, both on earnings results.

James Packer’s Crown has snapped up the remaining 50 per cent in Betfair Australia for $10 million, moving to full ownership of the company.

Crown said this morning that it acquired Betfair Group’s 50 per cent equity interest in Betfair Australasia Pty Limited (Betfair Australasia). Betfair Australasia was formed in 2004 as a 50-50 joint venture between Crown and Betfair Group.

Expanding his gambling empire: James Packer.

Expanding his gambling empire: James Packer. Photo: Rob Homer

The Perth-based telecommunications provider Amcom has posted an 8 per cent increase in full-year net profits to $22.4 million backed strong revenue growth in its telecommunications, hosted and cloud services.

Revenue rose 8 per cent to $170.4 million for the 2014 financial year, while earnings before interest, taxes, depreciation and amortisation jumped 17 per cent to $46.7 million.

The results are in line with analyst expectations.

Amcom said it expects a similar rate of growth in profit in 2015 and will provide an update at the company’s annual general meeting in November.

A capital raising in the second of the year allowed Amcom to tap the market from an extra $40 million, at $2.05 per share.

“This gives us ample capacity to take advantage of both organic or acquisition opportunities that will be complementary to our existing business as we look to increase our national footprint,” Amcom chairman Tony Grist said.

The Perth-based telecommunications provider increased its final dividend by 14 per cent to 4¢, taking the total dividend to 6.2¢ per share, which will be paid on October 7.

Here's an analyst's snapshot on the CBA result. This from Watermark Funds Management investment analyst Omkar Joshi:

  • Cash earnings were 12% higher in FY14 and in line with consensus expectations. The bottom line was assisted by a lower tax rate and higher investment experience, although this was largely offset by an increase in bad debts and lower trading income.
  • Capital was the key stand out from the result, with CBA increasing its CET1 ratio by 110bps in FY14. This implies very solid organic capital generation even after accounting for the 28bp contributions from the property transactions.
  • The 2H14 DPS was 2% lower than consensus expectations. CBA has announced that they intend to neutralise the DRP, which is in contrast to what they did at the first half result in February. WBC is also neutralising its DRP currently while ANZ and NAB are not.
  • ROE has come in a little bit lighter at 18.3% vs. consensus expectations of 19.0%
  • NIM outcome was pleasing given the building competitive pressures in lending, with NIM 1bp higher in FY14 and flat in 2H14. FY14 NIM was 1bp higher than consensus and 2H14 NIM was 3bp higher than expected.
  • Bad debt charges have modestly increased in the half to 17bps in 2H14 from 16bps in 1H14. This seems to suggest we might have passed the sweet spot in the asset quality cycle and that bad debt charges could start to tick up marginally from here for the industry.
  • Overall, an in-line result but with generally pleasing quality. Capital was the highlight of the result.

Suncorp Group is flagging up to 6 per cent growth across the insurance giant’s businesses in the new financial year, as it rewards investors with a 30¢-per-share special dividend for fiscal 2014.

Suncorp, the owner of insurance brands such as AAMI and GIO, reported a profit of $730 million for the year to June.

The results include a $496 million after tax write-down of goodwill and intangible assets in the group’s underperforming life insurance arm.

Analysts predicted the company would unveil a $680 million to $700 million net profit for the year.

Suncorp announced a final dividend of 40¢ per share compared with the 30¢ per share last year, bringing the full year dividend to $1.05.

The insurance giant, which has a market value of $18.2 billion, reported a 5.1 per cent rise in gross written premium or revenue to $8.725 billion for the year. The group’s banking division reported retail and business lending rose 5 per cent to $49.8 billion, and life insurance premiums ticked up 8.5 per cent to $852 million.

“We’ve achieved significant milestones in simplifying our business and delivering ongoing cost savings,” Suncorp boss Patrick Snowball said.

Suncorp Life, the company’s life insurance division, posted an underlying profit of $84 million - a 30 per cent plunge due to revised assumptions and increased reinsurance arrangements. The group had to write down $500 million in the division as high unemployment rates, anaemic consumer confidence and rising mental health problems spur a spate of claims across the industry.

Mr Snowball previously warned of further weakness in the group’s life business over the next three to four years.

Suncorp chief Patrick Snowball. The insurer has rewarded shareholders with a special dividend as it unveils full-year results.

Suncorp chief Patrick Snowball. The insurer has rewarded shareholders with a special dividend as it unveils full-year results. Photo: Glenn Hunt

Investors are likely to be pleased by news of CBA’s $2.18 dividend, says CMC chief market analyst Ric Spooner:

  • It’s encouraging that CBA is comfortable in maintaining its payout ratio at 75 per cent. This indicates it is relatively comfortable about meeting future capital requirements.
  • The strength of the bank’s credit position is also reflected in the fact that it has achieved a net interest margin of 2.14 per cent.
  • This indicates favourable funding rates from offshore markets allowing its interest margin to withstand competitive pressure on domestic mortgage rates.

CBA's result is important for the market, not only because it’s the largest stock but also because it is the only one of the big four reporting full year results this month and provides an update on the banking sector as a whole.

And another earning: breads and spreads maker Goodman Fielder has sunk into the red with a full year loss of $405.1 million and says trading remains difficult.

The company, whose brands include Meadow Lea and Vogel’s bread, says it faces stiff competition from rivals in terms of volumes and pricing. It says it is trying to arrest its earnings decline in its grocery business, particularly in spreads and edible oils, while trying to improve bakery manufacturing and to cut costs.

Goodman’s loss for 2013-14 compared to a $102.5 million profit for the previous year. Revenues were fairly flat at $2.2 billion. The results follow a $1.37 billion takeover offer from an Asian consortium in May.

Bank of Queensland CEO Stuart Grimshaw has shocked the market by announcing his resignation in order "to pursue a new non-banking opportunity outside Australia".

Chief operating officer Jon Sutton will take over as Acting CEO from 1 September 2014 while the board conducts an internal and external search for a new CEO.

Mr Grimshaw, who took the top job in November 2011, is credited with steering the bank from the precarious position in which the lender found itself post-GFC.

In a statement to the ASX, Mr Grimshaw said he was proud of what BoQ had achieved during his tenure.

“BOQ has significantly improved its business fundamentals, including repairing the balance sheet and instilling new risk disciplines. A fundamental transformation is in full swing, ranging from the implementation of systems to help digitise our processes through to advocacy to create a level playing field through the Financial System Inquiry,” he said.

 “While it was a very difficult decision to leave BoQ, I was offered a fantastic opportunity that takes my career in a new direction. I am confident that I leave the bank in great shape and in very good hands.”

BoQ Staurt Grimshaw has announced he will leave the bank at the end of the month.

BoQ Staurt Grimshaw has announced he will leave the bank at the end of the month.

Casino operator Echo Entertainment Group's full year net profit after tax rose 27.3 per cent to $106.3 million, which was boosted by a strong second half and growth in the VIP business.

On a normalised basis, which removes volatility associated with fluctuations in spending by high roller gamblers, net profit rose 24.6 per cent to $158.2 million in the year ended June 30.

The result was up from normalised NPAT of $126.9 million in the same period last year and beat the range of $150 million to $153 million that Echo had previously guided to. Reported net profit was hit by $22.2 million in financing costs.

The board declared a dividend of 4¢ per share, partially franked, which is payable on September 30

Reported revenue from its four casinos in Sydney and Queensland rose 3.9 per cent to $1.8 billion.

Normalised revenue hit $1.97 billion, which was a 3.8 per cent rise on the 2013 financial year and beat the consensus among analysts of $1.9 billion.

 

Copper miner OZ Minerals has revealed a third consecutive half year loss, as its campaign of waste material movement led to a $7.4 million interim loss for the six months to June 30.

The $14.3 million underlying loss reported today was better than the $61 million underlying loss predicted by UBS.

There has still been no sale of a stake in OZ’s Carrapateena copper and gold deposit in South Australia, with the company saying today that the board was still mulling the recent feasibility study, and talks with potential partners still underway.

Considered the best undeveloped copper asset in Australia, Carrapateena is expected to cost as much as $3 billion to construct in a block cave operation.

OZ has warned it will increase waste movements in its Prominent Hill mine during the remainder of 2014, with a view to running a far more profitable operation over the next five to ten years.

OZ shares last traded at $4.48, having improved in value significantly over the past six months.

The spot copper price was $US3.15 per pound overnight.

Medical centre and pathology operator Primary Health Care said its full-year net profit after tax rose 8.3 per cent to $162 million, which was just under expectations.

The Sydney-based company’s net profit was helped by a margin gain within medical centres of 80 basis points, to 56.8 per cent. Analysts had expected net profit of $165.0 million, according to data compiled by Bloomberg. In the 2013 fiscal year Primary had net profit of $150.1 million.

Primary reported a 6 per cent rise in revenue to $1.52 billion, up from $1.44 billion in the same period last year, which was in line with consensus among analysts of $1.52 billion, according to Bloomberg.

The company said it was not possible to predict how a co-payment for doctor visits would affect the business, if indeed the proposed policy was passed by the Senate.

“But the greater efficiency of large-scale centres such as Primary’s should assist Primary to adapt to any changes,” Primary said in a statement. “If some form of co-payment system were introduced, that may challenge some small practices and create opportunities for Primary.”

The company gave guidance for EBITDA of between $410 million and $425 million in the 2015 financial year, which would result in earnings per share growth of 5 to 12 per cent. EBITDA in the 2014 financial year was $399 million.

The board declared a dividend of 11¢ per share, which was steady on the final dividend last year and is payable on September 15.

The stock closed at $4.82 on Tuesday, below a 12-month high of $5.29 it hit last August. It has lost 4 per cent in the past year, underperforming the benchmark S&P/ASX200 index, which has gained 8 per cent in the same period.

Blood product and vaccine maker CSL said its full-year net profit after tax rose 7.8 per cent to $US1.31 billion, which was dragged down by a $US64 million legal settlement but boosted by strong demand for plasma therapies.

The result was up from net profit of $1.2 billion in the 2013 financial year, and met analysts’ expectations of NPAT of $US1.3 billion.

The Melbourne-based company said revenue rose 7.7 per cent to $US5.33 billion in the 12 months ended June 30, which was marginally under the consensus among analysts of revenue of $US5.4 billion, according to data compiled by Bloomberg.

On a constant currency sales were up 8.6 per cent to $US5.37 billion.

Chief executive Paul Perreault said CSL expects NPAT to grow at 12 per cent and earnings before interest and tax to grow at 15 per cent in the 2015 financial year, in constant currency.

The board declared a dividend of US60¢ per share, unfranked, to be paid on September 10.

Shares in the $32 billion company have had a volatile past year. At Tuesday’s closing price of $65.55, the stock has gained just 0.1 per cent in the past 12 months. The benchmark S&P/ASX200 index has gained 8 per cent in the same period. In the past year CSL shares have traded between a high of $72.50 in March and a low of $63.35 last August.

The Commonwealth Bank has delivered a record cash profit of $8.68 billion in the year to June, a 12 per cent increase, and will raise dividends by 10 per cent.

The country's biggest bank today delivered full-year earnings that were broadly in line with analyst expectations, as it painted a cautious outlook for the econonomy.

CBA will pay a $2.18 interim dividend, taking the full year payout to $4.01, a 10 per cent increase on a year earlier. Market analysts had expected cash earnings of about $8.7 billion and a dividend of $2.14.

Chief executive Ian Narev said he was "cautiously positive" about the year ahead, as lower interest rates were boosting key sectors.

"Lower interest rates have been positive for the housing and construction sectors, where increased activity has gone some way to offset the impacts of the anticipated reduction in investment in the resources sector," he said in a statement. 

“If the stability in global markets continues, gradual increases in consumer spending and demand for credit from businesses over the next year are likely, as long as budget discussions are progressed and there is a clear understanding of Australia’s medium to long term economic direction.”

Read more.

Commonwealth Bank boss Ian Narev says he's "cautiously positive" for the year ahead.

Commonwealth Bank boss Ian Narev says he's "cautiously positive" for the year ahead. Photo: James Alcock

US stocks declined, after the Standard & Poor’s 500 Index produced its biggest two-day gain since April, as investors watched geopolitical developments and energy shares sank after Brent crude fell to a 13-month low.

The S&P 500 fell 0.2 percent to 1,933.75. The Dow Jones Industrial Average slipped 9.44 points, or 0.1 percent, to 16,560.54. The Russell 2000 Index of small stocks retreated 0.8 percent.

“We’re in a zone of ambivalence with investors maintaining a cautious bias,” Terry Sandven, chief equity strategist at US Bank Wealth Management, said. “Equities appear to be navigating the dog days of summer with markets being driven more by geopolitical events than economic and company fundamentals.”

The S&P 500 climbed 1.4 per cent in the previous two trading days amid speculation that tension in Ukraine would lessen.

Data today from Germany reignited those concerns, after investor confidence reported by the ZEW Center dropped for an eighth month as the crisis in Ukraine and a sluggish euro-area recovery damped the outlook for Europe’s largest economy.

A Russian humanitarian mission was headed toward eastern Ukraine after the US warned President Vladimir Putin not to use aid as a cover to send in troops. Ukraine said it won’t let the convoy enter in its current form because it argues the mission doesn’t adhere to international rules.

In the Middle East, wide gaps remain between Israel and the Palestinians in reaching a long-term deal on the Gaza Strip, an Israeli official said, as Hamas warned there would be no more truces beyond the one due to end at midnight tomorrow.

Iraq’s Prime Minister Nouri al-Maliki chaired a meeting of military officers in the latest sign that he won’t hand power to designated successor Haidar al-Abadi.

“We have some bad news on German investor confidence, and bad news from the euro zone in the long term impact the US,” Walter Todd, said. “The economic data from the US is very good, but if the economic situation in Europe continues to deteriorate, we’re not going be immune from that forever.”

The euro fell against the US dollar for a second consecutive session on Tuesday after a weak German investor sentiment survey highlighted growing concerns about slowing growth in the region and worries about the impact of the Russia-Ukraine crisis.

Investors saw broad euro weakness with the euro index , which measures the euro zone common currency's value against five other units, down 0.2 per cent on the day following the weak German data.

Germany's ZEW survey showed both the current situation and expectations indexes deteriorating in August, while the overall index fell for an eighth consecutive month, to 8.6, its lowest since December 2012 and well below forecasts.

The West has imposed tough sanctions on Moscow, one of Germany's biggest trading partners, over Russia's role in Ukraine. Russia has responded with sanctions of its own, which could hurt the euro zone.

"The recent ... disappointing economic indicators from the world's fourth-largest economy, along with an escalation of sanctions towards Russia, has institutional investors and analysts nervous about future economic conditions," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary.

The euro fell to $US1.3337 after the ZEW survey was released, not far from a nine-month low of $US1.3331 struck on Aug. 6. It was last at $1.3367, down 0.1 percent. The euro was also 0.1 percent lower against the yen at 136.61 yen.

Read more.

German Chancellor Angela Merkel.

German Chancellor Angela Merkel. Photo: AFP

Casino operator SkyCity Entertainment said its full-year net profit after tax fell 22.6 per cent to $NZ98.54 million ($89.58 million).

The Auckland-based company, which has properties in New Zealand, Darwin and Adelaide, said revenue from ordinary activities and including interest fell 4.8 per cent to $821.48 million.

On a normalised basis, which removes the volatility associated with big-spending, high-roller gamblers, revenue fell 2 per cent to $843.34 million, below expectations of $NZ840.1 million, according to data compiled by Bloomberg.

Normalised net profit fell 8.1 per cent to to $123.17 million, the company said in a statement to the stock exchange.

The company’s share price has been on a downward slide and closed at $3.26 on Tuesday, just 1¢ shy of a 12-month low. The stock has lost 11 per cent, compared to an 8 per cent rise in the S&P/ASX200 index.

The board declared a final divided of 10¢ to be paid on September 19.

Separately, SkyCity said it has appointed Rob Hamilton as chief financial officer. Hamilton has been leading the investment banking team at First NZ Capital.

“Mr Hamilton was chosen from a strong field of candidates, both locally and internationally and is a respected leader of the investment banking and finance community with more than 20 years experience at First NZ Capital,” chief executive Nigel Morrison said in a statement.

Local shares, if they take their cue from overseas markets, are set to open little changed ahead of a raft of local earnings.

Here's what you need2know:

SPI up 4 pts at 5474

AUD at 92.66 US cents

• On Wall St, S&P 500 -0.2%, Dow -0.1%, Nasdaq -0.3%

• In Europe, Euro Stoxx 50 -0.8%, FTSE flat, CAC -0.9, DAX -1.2%

• Spot gold rose 96 US cents to $US1309.44 an ounce

Iron ore fell 1.4 per cent to $US94/tonne

• Brent oil down $US1.71 to $US102.97 per barrel

What’s on today:

• Australia: Westpac consumer confidence at 10:30am AEST and Q2 wage cost index from ABS at 11:30

Japan Q2 GDP at 9:50am

Chinese industrial production, fixed asset investment and retail sales figures for July at 3:30pm

Reporting today:

• Amcom, Commonwealth Bank, Computershare, Carsales, Echo Entertainment, Goodman Fielder, Primary Health Care, Skilled Group, CSL, SunCorp, Oz Minerals (interim).

Stocks to watch:

• Bendigo & Adelaide Bank cut to neutral vs buy at Goldman

BHP Billiton remains Nomura's top pick for growth, returns. Deutsche Bank has given the company a “buy” rating with a 12 month price target of $43.60, because of its good performance at its Blackhawk operation.

• Genworth trades ex-dividend

Rio Tinto trades ex-div

• Sims Metal Mgt may buy Fletcher Building's 50% stake in New Zealand JV, reports the AFR

• Stockland may ditch its near $500 million exposure to Australand by the end of the week in an effort to avert a delayed payout from the takeover target’s new majority shareholder, Frasers Centrepoint.

Read more.

Good morning and welcome to the Markets Live blog for Wednesday.

Your editors today are Jens Meyer and Patrick Commins.

This blog is not intended as investment advice.

BusinessDay with wires.

 

Quotes Search

Sort comments by:
  • In Bris / GC - basic starting price for BC + Rates is around $5500 a year. Not much floating under that. NEW units with services, well just add to that! Add some internal maintenance costs. Little Landlords in SEQLD would be doing it VERY tough in this market. Unit home owners who live within, well, these people are paying a fortune to live in the concrete walls and lids.

    Commenter
    Liberator
    Location
    SEQLD
    Date and time
    August 13, 2014, 4:50PM
  • So Irish Phil replies to a scenario which OP spilled out a set of numbers.
    Buy 750k, sold after 3 years 940k.
    Total cost of owning(strata, rates, INTEREST paid, etc) is calculated = 935k at the point of selling. Clearly this is an apartment/townhouse/villa etc.

    And Allan quickly jumped on a thread and said you can rent a 1.2 millions HOUSE for 600 p/w which is totally irrelevant.

    Commenter
    Curious
    Location
    observer
    Date and time
    August 13, 2014, 4:33PM
    • Of course it's relevant.

      Oh and se Davo's comment below re rents.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      August 13, 2014, 4:59PM
  • I pay 12c/min mobile rates even to most overseas countries and no flagfall. Telstra have a long way to fall.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    August 13, 2014, 4:25PM
  • Alfa75 has a new job: http://www.theage.com.au/digital-life/digital-life-news/hotel-to-begin-testing-botlr-a-robotic-bellhop-20140813-103fc0.html

    Commenter
    Allan
    Location
    Prahran
    Date and time
    August 13, 2014, 4:22PM
  • "$600/wk rents a $1.2M+ house. Your sums are wrong."
    Irish Phil replies to a case which OP bought an apartment so your claim is irrelevant. Pretty sure 600/week doesn't get you a 1.2 millions apartment.

    Commenter
    got brain
    Location
    Date and time
    August 13, 2014, 4:20PM
  • Now in the interests of being proved wrong, I'm expecting a good result out of TLS tomorrow. It's market dominance and the growing hunger of Australians for mobile data should ensure that. However given how the share prices of other companies reporting good results have been trashed, I'm expecting the same to happen to TLS. Might even be worth topping up.

    Commenter
    mitch of ACT
    Location
    Date and time
    August 13, 2014, 3:55PM
  • "surprisingly weak Chinese monetary data "

    China's internal debt is already mathematically impossible to pay back. Growth has been pulled forward for years ie it is higher than the underlying organic growth.

    The only way to go back into balance is to have lower than organic growth for the next decade.

    Bad news for the country that hitched their wagon to resources/China.

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    August 13, 2014, 3:55PM
  • Real FT wages falling, hours worked falling, economy slowing, basket case government, resources boom over...

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    August 13, 2014, 3:51PM
  • Bank says people should take out larger mortgages. Shock! Horror!

    Banks behaving badly. Again.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    August 13, 2014, 3:50PM
  • 50c cost to process a late payment, fee charged, $20.

    Unconscionable behaviour by CBA and the other banks. Profits from ripping off vulnerable pensioners, unemployed and low income earners.

    Bank behaving badly. Again.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    August 13, 2014, 3:48PM
    • Banks making nearly $9B profit. To put you pay with them, $5 per month account keeping fee. Please. Got a mortgage, that will be $10 per month thank you!

      I do not bank within the top 8 - they are jokers and have you all believe they offer great competitive services...

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      August 13, 2014, 4:30PM
  • Go Putin smash that evil US regime

    Commenter
    kman
    Date and time
    August 13, 2014, 3:43PM
  • Beginning to think CBA's SP reaction today is the catalyst for the 10% correction we don't necessarily want.

    Commenter
    what chunder
    Location
    Date and time
    August 13, 2014, 3:36PM
  • SGP lets put that australand baby to bed and move on....and up.

    Commenter
    Bearshapedbull
    Location
    Mugpunters lounge
    Date and time
    August 13, 2014, 3:20PM
  • Anyone following CPU today? SP now down 6.5%, a tad oversold I think.

    Commenter
    JJ
    Location
    NSW
    Date and time
    August 13, 2014, 3:16PM
    • buy some at the close then!

      Commenter
      AJ
      Location
      Date and time
      August 13, 2014, 3:42PM
    • I like it. Short at 12.50. As posted.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      August 13, 2014, 3:43PM
    • @AJ, I should have, opted for some BXB instead. But one to keep an eye on tomorrow.

      @Allan, well played!

      Commenter
      JJ
      Location
      NSW
      Date and time
      August 13, 2014, 4:41PM
  • comment at 2.37 pm

    It is becoming increasingly evident that India will give our mining sector a much needed boost going into the second half of this decade and beyond.

    I trust our Governments (both current and future) won't waste this opportunity!

    Commenter
    Allan Mitchell
    Location
    SEQLD
    Date and time
    August 13, 2014, 3:14PM
    • Quite correct indeed. Furthermore, we need to show our great support for India in the way of free-trade and free migration with this great nation. I would like to see much increases in immigration from India, especially in QLD (similar weather & temperatures), around 50-100 million asap to be followed by Chinese immigration around similar figures. We need to give as well as take. I'm sure many people would agree with these immediate steps.

      Commenter
      Mack
      Location
      Sydney
      Date and time
      August 13, 2014, 4:05PM
  • SUN was shining today its a star after all nice one @harry hope yr smiling with it

    Commenter
    Bearshapedbull
    Location
    Mugpunters lounge
    Date and time
    August 13, 2014, 3:13PM
    • Thanks BSB even a bit better than I expected.

      Commenter
      Harry Rogers
      Location
      Date and time
      August 13, 2014, 3:59PM
  • What's the go with ARI? Third chance to get in maybe? Any one shorting this?

    Commenter
    ;)
    Location
    Date and time
    August 13, 2014, 3:10PM
  • Okay, I am really tired of this investment property example, so here is the answer:
    1.) Don't buy. Have $150k in the bank, let's say earn 5% interest, grows by ~$25k over 3 years. Pay rent of $95k ($600 pw). End position is $80k in the bank.
    2.) Buy & sell after 3 years. Get $150k equity back, plus $5k profit (after all costs – per original example). End position is $155k.
    Buying has left them $75k better off.
    Case closed?
    =

    Commenter
    Irish Phil
    Location
    Date and time
    August 13, 2014, 3:01PM
    • @boom boom are you reading this ?

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 3:46PM
    • $600/wk rents a $1.2M+ house. Your sums are wrong.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      August 13, 2014, 3:59PM
    • Except that if you count the rent you must count the interest paid - model assumes int paid is equivalent to rent and so get out flat is about same plus or minus 5k so who cares!

      Commenter
      Greg
      Location
      Date and time
      August 13, 2014, 4:08PM
    • @Allan - not in Sydney you don't. Not with in the 15kms radius anyway.

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 4:12PM
    • "Except that if you count the rent you must count the interest paid"

      you forgot that the 5k profit is after interest already factored in.

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 4:23PM
    • Allan: are you dreaming. Your idea of Sydney rents are quite wide of the market. $600 pw will get you a $600k-$800k 2 bed apartment.
      I pay $720 pw for a 2 bed house, probably "worth" $900k-$1m.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 4:26PM
    • That's because it's mostly flats so triple the depreciation. Same net result.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      August 13, 2014, 4:26PM
    • @Greg: the interest paid was already included in the original post to come up with the $5k profit on the purchase and sale.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 4:27PM
    • @got brain: ESPECIALLY in Sydney, returns to price slipping quite dramatically. My current place, 2 bed unit, top of Balmoral slopes, panoramic middle harbour views, <10 ks to city, agent says current value just over $1m, my rent just risen by whopping $20 pw after 18 months to $570 pw. Go figure!

      Commenter
      Davo
      Location
      Sydney
      Date and time
      August 13, 2014, 4:33PM
  • Does anyone know when MMS reports?

    Thinking the result will be good

    Commenter
    clive
    Location
    Date and time
    August 13, 2014, 2:30PM
    • Tuesday August 26

      Commenter
      AJ
      Location
      Date and time
      August 13, 2014, 3:49PM
  • I read comments every day from jaded ALP members about how the budget will smash the economy and lead us into depression and then today I read Ian Narev saying the budget must pass and the uncertainty must end. Not sure the man heading Australia's biggest company would be saying such things if the outcomes predicted by the ALP members were plausible. With the exception of tinkering uni fees and scrapping the PPL, it's time for the ALP and PUP to get out of the way and start making the reforms this country needs to improve economic sustainability. Waiting for the replies from the ALP members to let me know they know more than Narev.

    Commenter
    Logical
    Location
    Thinker
    Date and time
    August 13, 2014, 2:24PM
    • I once had a boss who used to say to me "don't be logical with me son"!

      For the record I will be logical and agree with the CBA boss

      Commenter
      clive
      Location
      Date and time
      August 13, 2014, 2:34PM
    • Are you talking about super tax reform, negative gearing tax reduction reform, Capital Gain tax reform.? If yes , surely will second the comment. Then we can discuss company tax reduction also as a total package ...

      Commenter
      Up and Down is Norm
      Location
      Date and time
      August 13, 2014, 2:36PM
    • that would be the budget that targets poor, disabled, long term unemployed and young ppl.
      yep, get out the way, private school boys commin thru!

      Commenter
      j
      Location
      syd
      Date and time
      August 13, 2014, 2:49PM
    • Up and down, I'm talking about what is on the agenda now. Hopefully the things you have mentioned are up for discussion and possible reform along with the GST in the future. But for the time being nobody is talking about that. ALP missed a huge opportunity when they effectively ignored the Henry review and bungled the 3 or 4 recommendations they picked out of 138.

      Commenter
      Logical
      Location
      Thinker
      Date and time
      August 13, 2014, 3:08PM
    • Lets see - is this the bank which benefits on increased mortgages 10% a year increase in house price with govt supported property speculation policies such as negative gearing (6$ billion per year), discounted capital gains tax, unlimited foreigh property buyers, removal of FOFA, super fund tax deductions unlimited for wealthy climates, high use of 457 and outsourced workers, loans for FBT rort cars? And then bank guarantees?
      Where is the Budget controlling any of this corporate welfare?.
      Sounds like the govt is helping the banks enough?

      Commenter
      BCA self interest
      Location
      Date and time
      August 13, 2014, 3:12PM
    • @Logical Narev and others of his ilk are vested interests pushing their own barrow. Business hates uncertainty. There is very little in this Budget that impacts directly on business so the short-sighted in the business community can't see what all of the fuss is about. However there are massive indirect impacts on business in the Budget. The Budget threatens to cut the disposable incomes of a whole range of consumers by cuts to pensions, benefits, rebates, subsidies and the imposition of additional taxes. That's why consumer confidence is falling. The cuts to disposable incomes will reduce spending, particularly in the retail sector. Business turnover will fall. Business profits will fall. Tax collections will fall. Unemployment will continue to rise. Then business will scream for stimulus but the gov't will have no spare cash because payments to the army of newly unemployed will have swallowed it all. Now you know why the gov't wants to make the dole so hard to get.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 3:15PM
    • By the way in my 20+ years working with gov't in the finance area as a public servant, contractor and consultant I have worked directly and indirectly on 20+ Budgets, MYEFOs, PEFOs, economic statements and the like. I have seen the consequences of ill-thought out Budget proposals. In my 20+ years I have never seen a Budget as bad as this one. Keating & Costello were masters of the art. Hockey is a rank amateur and it shows.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 3:18PM
    • Mitch, you sound very much like a public servant (I say this as a former public servant). The public service is full of people who think they know everything but are generally very narrow thinkers unable to look past modelling and their own biases. I will side with the head of Australia's biggest company (who you seem to think has a great deal to lose from the budget) over a politically biased public servant. Of course you know more than Narev though.

      Commenter
      Logical
      Location
      Thinker
      Date and time
      August 13, 2014, 4:04PM
    • @Logical, I worked for govt's of both colours without fear, favour or bias (well not too much). Good policy speaks for itself and doesn't need to be bullied through the Parliament. Hockey was so ashamed of the consequences of his Budget that he broke with long-standing tradition and refused to publish the normal impact tables.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 4:18PM
    • Mitch - I would like to agree but cannot. I challenge anyone in Australia to refinance a $500K mortgage, with a $125K personal side debt (with no asset to back said side debt) AND having an income that can realistically only afford a $250K mortgage to start with. That is the same comparison (in layman's). You see... the government (incl State's) is trading insolvent.

      A recession would have been better 6 years ago, instead, Labor propped up the Ponzi and here we are. Debt laden and unable to reconcile future expenditure with any foreseeable Gov income...

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      August 13, 2014, 4:27PM
    • I haven't seen such ALP commentary about the budget causing a recession, only about the unfair impact on rich v poor. I call straw man.

      Commenter
      rudy
      Location
      Date and time
      August 13, 2014, 4:49PM
  • What continues to bewilder me is how a stock like AMM can post a great result like it did and go down 5%.

    Anyone?

    Commenter
    motley mob
    Location
    Date and time
    August 13, 2014, 2:21PM
    • Future outlook?

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 2:38PM
    • Its on my watch list, in saying that probably a lot of others as well :) happy trading.

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 2:40PM
    • Lucky dip as usual cant pick a winner on results...anymore

      Commenter
      Bearshapedbull
      Location
      Mugpunters lounge
      Date and time
      August 13, 2014, 3:31PM
  • Its time for a super profits tax on all businesses operating in Australia.

    Commenter
    Josh
    Location
    Perth
    Date and time
    August 13, 2014, 2:07PM
  • thewagster, they havent got enough money to fix their waste stations, reckon we are looking at a write down.

    Commenter
    Screech
    Location
    Date and time
    August 13, 2014, 1:54PM
    • What did they do with all their money?

      Commenter
      Red Rooster
      Location
      Number Crunching
      Date and time
      August 13, 2014, 2:34PM
    • Haha, silly comment from me. What i meant was they havent allocated enough cash to the remediation of the landfill assets. Could cop a bit of a hit initially, but not expecting too much.

      Commenter
      Screech
      Location
      Date and time
      August 13, 2014, 3:00PM
  • very difficult to trade today. just washing around.

    Commenter
    j
    Location
    syd
    Date and time
    August 13, 2014, 1:53PM
    • You didn't make a few bob of AMM?

      Commenter
      Bouncy
      Location
      Bouncy
      Date and time
      August 13, 2014, 2:53PM
  • pass the red,

    "Sorry again, but the comparison needs to be with where they'd have been otherwise. If they'd been renting for 3 years their bank balance would be a lot lower."

    Nope, as renters they retain their $150k stake/deposit so their balance would have been better off had they rented for this period

    Commenter
    tom
    Location
    Date and time
    August 13, 2014, 1:46PM
    • They would have had to use that money to pay rent. What would their rent have been to rent an equivalent home? You can't do the maths using only some of the facts and ignoring others.

      Commenter
      doglover
      Location
      Date and time
      August 13, 2014, 1:55PM
    • Huh?!? When they sell they get the $150k equity back, after settlement of the mortgage.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 2:04PM
    • Despite boom boom's friends made the "not recommended investment strategy" ie. buy and sell RE in a short term (3 years). They still didn't lose any money.What's exactly is the problem? How is it a bad investment when it returns something ? It's just not good enough.

      Comparing a bad investment strategy to a safe investment strategy (bank interest) as an attempt to bring down a sound investment strategy (RE in a long term) is ridiculous.

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 2:27PM
    • why are we still hung up on this? who wants to talk about failed investors? they bought and sold within 3 years... hello? costs of buying + costs of selling make property a long term investment. Lots of money to be made in property, lots of money to be made in shares... now go away!

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 2:56PM
  • Anyone got any opinions (conjecture) on the TPI trading halt?

    Commenter
    thewagster
    Location
    Date and time
    August 13, 2014, 1:41PM
    • Slight increase before halt make me think it could be positive

      Commenter
      Red Rooster
      Location
      Number Crunching
      Date and time
      August 13, 2014, 2:12PM
    • Wish you were right, but looking at the notice it cant be good. Clearly havent put enough cash aside imo. Hoping it isnt material, but no doubt looking at a small downgrade at best.

      Commenter
      Screech
      Location
      Date and time
      August 13, 2014, 2:26PM
  • Was wondering why WBC was up while the other 3 big banks where down?

    @Mitch, anyone?

    Commenter
    Allan Mitchell
    Location
    SEQLD
    Date and time
    August 13, 2014, 1:32PM
    • @Allan, each bank running their own race today instead of tied together as they usually are. The CBA result is the likely catalyst for that.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 1:55PM
  • Brave is the man to call LNG a sell, but on a technical basis, I see it forming a double top over the last fortnight, and for me that is a good time to sell. So I have.

    LNG, what a great stock you have been.

    Commenter
    Learner
    Location
    Melbourne
    Date and time
    August 13, 2014, 1:30PM
    • I concur and will short it at $3.90.

      Commenter
      Allan Mitchell
      Location
      SEQLD
      Date and time
      August 13, 2014, 1:58PM
  • bought 9000 @ $1.86 and sold 30 minutes later for $1.895

    profit $280...nice hourly rate if I could do it all the time!

    Commenter
    clive
    Location
    Date and time
    August 13, 2014, 1:24PM
    • this was a reply to @Happy Trader re AMM

      Commenter
      clive
      Location
      Date and time
      August 13, 2014, 1:51PM
    • nice work! was looking at long term. down on a yearly low, hitting targets all the way, why not is the question, might have to look into them a bit deeper.

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 2:31PM
    • Well done@clive you 1/2 hr trader you

      Commenter
      Bearshapedbull
      Location
      Mugpunters lounge
      Date and time
      August 13, 2014, 3:26PM
  • Daxman is bored...

    Commenter
    Daxman
    Location
    Sydney
    Date and time
    August 13, 2014, 12:53PM
    • pull up ya dax man

      Commenter
      Allan Mitchell
      Location
      SEQLD
      Date and time
      August 13, 2014, 1:46PM
    • Do a google images search for "squirrels"; that will entertain for a few moments

      Commenter
      Elric
      Location
      Melnibone
      Date and time
      August 13, 2014, 2:04PM
  • Makes you wonder WHY abbott gave billions of dollars to the banks before..strange strange man.

    Commenter
    Steeden
    Location
    Ballina
    Date and time
    August 13, 2014, 12:24PM
    • When did he give them any money? Please explain [sic]!

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      August 13, 2014, 12:49PM
    • Makes you wonder why Abbott is spending $250 million putting chaplains in schools to replace people who actually have training with children.

      No wait, makes you wonder why Abbott exists at all.

      Commenter
      Sceptical Prophet
      Location
      Date and time
      August 13, 2014, 1:06PM
    • @Sceptical Abbott exists because it is better to suffer a brief time in this life than an eternity in the next.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 1:20PM
    • With all due respect I think Abbott is doing a good job considering the unfair and unfounded biased commentary against him!

      Aussies love the underdog and I would not be surprised if the tide turns in his favour.

      Commenter
      Allan Mitchell
      Location
      SEQLD
      Date and time
      August 13, 2014, 1:39PM
    • Swan n Rudd you mean?
      sound chaps
      we must have financial stability

      Commenter
      vested
      Location
      interest
      Date and time
      August 13, 2014, 1:41PM
    • @Wwwish the dilution of the FOFA reforms is a huge gift to the banks. Worthy of an ICAC enquiry or RC to look at the circumstances behind that. But we'll have to wait until after the next election .

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 1:50PM
    • I wan't aware that Tony Abbott gave billions to the banks . As I own over $600,000 in bank shares it's great. The rich should get richer.

      Commenter
      Heinrich
      Location
      Bunbury
      Date and time
      August 13, 2014, 2:15PM
    • Well done on not going close to answering Lion's question Mitch. The original comment was ridiculous.

      Commenter
      Sticks
      Location
      Date and time
      August 13, 2014, 2:28PM
    • As much as Aussies love an underdog, I'm pretty sure Abbott's most positive contribution to Australia is inspiring everyone to pay more attention politics so we can get rid of him.

      He really isn't an intelligent person. It's a wonder he has a public position. But, well ... sh*t happens, right?

      (I feel like adding more references to dumb things he's said but I'll stick to that one).

      Commenter
      Sceptical Prophet
      Location
      Date and time
      August 13, 2014, 2:53PM
    • @mitch, agree with you on the FOFA stuff making it easier for the banks to produce profits. It is not giving them money though. Giving away money is more like pink batts or the school buildings funding under labor.

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      August 13, 2014, 3:26PM
  • @11:55am the graph on wage inflation. Where's any evidence of the "wages explosion" that Abetz was on about. One day, just one day, I would like to see a statement by the Lieberals borne out by actual real, live data. Their Budget was framed on such dodgy statements and preconceptions so no wonder it will never pass.

    Commenter
    mitch of ACT
    Location
    Date and time
    August 13, 2014, 12:13PM
    • And to add to that, many e/ees in the Public Service being offered wage increases well below inflation. If they won't quit or take a VR then starve them out. Eventually gov't services we all rely on will disintegrate, round about election time would be poetic justice.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 12:34PM
    • Hey Mitch - re the Public Service wages - something has to be done to cut costs - the Australian taxpayer’s debt for the unfunded public service superannuation is somewhere around $200 billion. Unfunded super - ridiculous - one of Whitlam’s legacies we didn’t need.

      Commenter
      BillJ
      Location
      Date and time
      August 13, 2014, 4:11PM
  • Buy the dip in RIO. Headed for $70 in short order.

    Commenter
    50BahtLeo
    Location
    Date and time
    August 13, 2014, 12:07PM
    • Approx 43% of asx owned by foreigners, 40% by institutions and 17% by retail investors, so spruiking a large cap on this blog probably won't move it.

      Commenter
      W
      Location
      Date and time
      August 13, 2014, 12:26PM
    • Thanks for the heads up. Always learning .. I think the insto's telegraphed their intentions a few days after the recent profit result.

      Commenter
      50BahtLeo
      Location
      Living in SEA thanks to the ASX
      Date and time
      August 13, 2014, 1:05PM
    • Rio is a definite sell. so over valued.
      Short it.

      Commenter
      wil
      Location
      melb
      Date and time
      August 13, 2014, 1:16PM
    • Mining Boom?

      Commenter
      Red Rooster
      Location
      Naughty Corner
      Date and time
      August 13, 2014, 1:40PM
  • Anyone getting itchy buy fingers over AMM getting smashed this morning after coming in directly in line with expectations? Takes SP 7% below yearly low.

    Commenter
    Happy
    Location
    Trader
    Date and time
    August 13, 2014, 11:39AM
    • it is currently $1.845 and was $1.80 on August 29 last year!

      Commenter
      walter mitty
      Location
      Date and time
      August 13, 2014, 12:09PM
    • I'm putting a buy order in @ $1.835. Nicely run company.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 12:11PM
    • Annoyed with myself for not getting into CarSales this morning when the market overreacted as always and pushed them down to $10.40

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 12:12PM
    • @walter mitty, hey walter? wake up walter! thats not quite a year now is it?

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 3:07PM
  • ....."University of Wollongong’s SMART research ­institute shows for the first time how much Australians are overpaying for infrastructure.....Adjusted for inflation, the original bridge cost around $300 million. The second bridge, cost six times as much: $1.7 billion.......claiming that $4 billion to $5 billion is being lost to cost blowouts annually on new roads, rail lines and bridges"......

    Commenter
    The smart economy is coming
    Location
    We promise
    Date and time
    August 13, 2014, 11:23AM
  • If the recent falls in the markets have been a response to geo-political concerns, this will get worse before it gets better.

    The Libyan government has had to retreat to Tobruk. Tripoli and Benghazi are under the control of militias. My grandfather survived Tobruk, but I don't expect the Libyan government to.

    Events in the region are pushing countries in interesting directions.
    Egypt is turning closer to Russia. The Egyptian government has announced a wish to join in a free trade zone with the the Eurasian Customs Union (Russia, Belarus, Kazakhstan). The combined population of those countries is roughly equivalent to North America. (After years of being spurned by the EU, Turkey, too, has expressed an interest in the Eurasian Customs Union.

    Commenter
    Fred
    Location
    Date and time
    August 13, 2014, 11:23AM
    • The new world order will squash this like a tiny little lady bug ;)

      Commenter
      illuminati
      Location
      Date and time
      August 13, 2014, 11:32AM
    • Armenia and Kyrgyzstan are also joining The ECU.

      I don't mean to overstate its importance, but given all this, talk in Canberra of 'isolating' Russia economically is nonsense.
      In 2014, facing restrictions in London and New York does not a Hermit Kingdom make.

      Commenter
      Fred
      Location
      Date and time
      August 13, 2014, 11:38AM
    • @Fred it will seem like a hermit kingdom if you are one of the oligarchs and you can't visit London, New York or Paris where your fancy pad, mistress(es) and luxury shops are. The measures are aimed at those who give Putin power. When they remove their support, with the aid of a disaffected general or two, he is gone.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 11:55AM
    • Libya? Where is that again? And you're saying it affects stocks here?

      Commenter
      beria
      Location
      Date and time
      August 13, 2014, 12:57PM
    • population is as big as the US? whats their combined GDP/cap. rev it up!

      Commenter
      longlunch
      Location
      Date and time
      August 13, 2014, 1:22PM
  • TLS shed 3cents today ahead of tomorrow result announcement. Given current trend that will not surprise TLS share will be bashed should special dividend not forthcoming . It could be much uglier if sales revenue growth not above market expectation. Sit tight (just IMHO)

    Commenter
    Up and Down is Norm
    Location
    Date and time
    August 13, 2014, 11:21AM
    • What about the effect of FCF? Wouldn't that counter?

      Commenter
      Human Trader
      Location
      Sydney
      Date and time
      August 13, 2014, 11:39AM
    • Dip buy? No special divvy but eventually some reward from the NBN debacle taxpayers paying taxpayers in a revolving door so stay on the merry goround.

      Commenter
      Bearshapedbull
      Location
      Mugpunters lounge
      Date and time
      August 13, 2014, 2:42PM
  • WHC benefiting from being in the right place at the right time. Maule's Creek will be the saviour in the current environment!

    Commenter
    fredericka
    Location
    Date and time
    August 13, 2014, 11:08AM
  • So what was yesterday's mad rush to buy at any price about. The market had the scent of easy blood in its nostrils, it couldn't pay too much. Today I'm just smelling burnt fingers.

    Commenter
    mitch of ACT
    Location
    Date and time
    August 13, 2014, 11:07AM
    • Sorry Mitch. Fine are on fire still ;)

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 11:34AM
    • My big movers from yesterday are still on the rise, buy quality:
      CTD, GEM, VOC

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 11:38AM
    • *mine :)

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 11:43AM
  • I personally wonder what DJs new owners are doing and what strategy if any they have for getting traction. To think that you will make an extra $130-$150m extra by replacing well-known brands including Tommy Hilfiger, La Coste etc. with South African own line of private labels will be challenging. The new owners say they ‘will be guided by loyal DJ customers’. How exactly do you do that e.g. a customer survey or you through out some brands and then when you get complaints you bring them back?

    In order to get quick pay-back for overspending on their new acquisition it is very likely Woolworths Holding will implement a deep cost cutting campaign. I wish them well but think it will be hard to get a decent return on their investment.

    Commenter
    Viking
    Location
    Sydney
    Date and time
    August 13, 2014, 10:59AM
    • The main prize with DJS was the $600m+ property portfolio. That will be flogged off ASAP. The retail issue is secondary.

      Commenter
      mitch of ACT
      Location
      Date and time
      August 13, 2014, 11:11AM
  • I thought Resmed was also releasing their annual report today. Please correct me if I'm wrong.

    Commenter
    soap
    Location
    Date and time
    August 13, 2014, 10:49AM
    • I think the results were out on the 1/08.

      Commenter
      TP
      Location
      Date and time
      August 13, 2014, 11:05AM
    • It was released on August 1st.

      Commenter
      CafeAmericano
      Location
      Date and time
      August 13, 2014, 11:18AM
    • Thanks.

      Commenter
      soap
      Location
      Date and time
      August 13, 2014, 11:34AM
  • 10:33am: Japan contraction

    Abe's attempt at money-printing his way out of trouble is turning out to be a catastrophe of gigantic proportions. No surprise there, it's never worked anywhere ever. The US, which runs similar policies, has some more freedom given that the dollar is the world's reserve currency, but soon they will go the same way as Japan, but much quicker! The rate of de-dollarisation around the world is picking up. We know that US so called leadership don't understand what's going on, bless them, but Abe should know, and should take action. Their moving past the point of no return.

    Commenter
    Dr No
    Location
    Sydney
    Date and time
    August 13, 2014, 10:46AM
  • BKN is going like a rocket. Yet quite poor FY14 report card yesterday. You'd feel ill if you'd sold on the back of the results yesterday for $4.05 (SP just hit $4.93). Something is going on.

    Commenter
    Yin or yang
    Location
    Date and time
    August 13, 2014, 10:44AM
    • All that is "going on" is that BKN is getting back to where it was trading six months ago. For July to Dec last year BKN traded broadly between $5.00 and $6.50. It got oversold (or shorted) this year down to $3.25, in anticipation of an absolute shocker. The result turned out to be not in the doomsday region, just in the normal low point of cycle level, so the share price is simply returning to where it was.

      Commenter
      pass the red
      Location
      Date and time
      August 13, 2014, 10:57AM
    • @Pass the red. You could be right - it could just be institutions re-acquiring shares they'd disposed of. My hope is a juicy takeover contest.

      Commenter
      Yin or yang
      Location
      Date and time
      August 13, 2014, 11:16AM
  • Goooood Moooorning Vietnam!!!
    CAJ up again a sneaky 3.5%, taking it to 28%.

    Commenter
    Happy
    Location
    Trader
    Date and time
    August 13, 2014, 10:39AM
    • Big volumes coming through now! 5% sneaky $3k for Wednesday Burgers! Anyone else in this stock? Been a fav for last two years, last year got 20% off her but sold stupidly. Got back in around 47c.

      Commenter
      Happy
      Location
      Trader
      Date and time
      August 13, 2014, 11:09AM
    • Yep onboard for awhile avg 47.5c looking for 64c target might be this week....might not winner and grinner x 2 so far in fyear

      Commenter
      Bearshapedbull
      Location
      Mugpunters lounge
      Date and time
      August 13, 2014, 2:28PM
  • Harry S Dent has four and a half months before he is well and truly relegated to the dustbin of irrelevance.

    This 'economic forecaster' toured Australia recently loudly proclaiming the end is nigh for Australian property, even though you can still buy 3 bedroom brick houses on substantial plots of land 15 kms from the Melbourne CBD for circa $350K.

    When quizzed by David Potts, Mr Dent proclaimed the crash would happen by Xmas! He has 4 and a half months before his reputation as a forecaster of economic events is well and truly trashed.

    Some people must still be holding substantial amounts of cash, after being unfortunate enough to consider his earlier proclamation of world's end in a 'book' entitled something like 'how to profit from the coming economic DEPRESSION"! Such people will have well and truly missed out on the last 2-3 years of significant market appreciation. Good one Harry!

    Sensationalist fear mongering may sell books, but does little for your credibility as an 'economist'.

    Maybe next time. Even a broken clock is right twice a day!

    Commenter
    Herman
    Location
    Prahran
    Date and time
    August 13, 2014, 10:33AM
    • Harry Dent ;) lmao! Why Australian media bothered to print this guy's rubbish is beyond understanding. Go to his website and you are told to pay him money so he can save you from pending doom. A few on here might be loyal subscribers, so sorry if I offend.

      Commenter
      ;)
      Location
      Date and time
      August 13, 2014, 10:55AM
    • He has his fellow travellers in Australia though, some of them very regular contributors on here. I guess if your standard long term prediction is that a particular market sector will crash one day, maybe that day will come....one day. Bit more problematical if you say 'by this Xmas' though, which most long term bears avoid doing, including those from Prahran.

      Commenter
      rudy
      Location
      Date and time
      August 13, 2014, 4:54PM
  • wow, what a bounce for CSL, closed yesterday a bit over $65, opened today at $69! I couldn't find any reason why it got so low in past couple of weeks (other than the general malaise...)

    Commenter
    jacey
    Location
    Date and time
    August 13, 2014, 10:31AM
  • GDY has had a nice little rise over the last week or so on no news (to my knowledge).

    It's a bit of a wait, but the Savo Island project should be powering Honiara in a couple of years time, which should be a decent little income stream for them.

    Admittedly, Honiara is not New York or Beijing!

    Commenter
    Fred
    Location
    Date and time
    August 13, 2014, 10:27AM
  • Suncorp shares at $14.70, paying a dividend of $1.05.
    *grabs calculator*.
    Nice.

    Commenter
    Irish Phil
    Location
    Date and time
    August 13, 2014, 10:21AM
    • Even without the 30c special dividend, it's a tempting yield play.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 10:33AM
    • 40c interim dividend to be extract. considering SUN was well over $20 a few years back, still long way to go.

      Commenter
      AUBen
      Location
      Date and time
      August 13, 2014, 10:46AM
  • Home owners and small business being taken for a ride by the banks. Lending conditions providing the fattest profits but little in the way of loan reductions. More fees I notice!

    Commenter
    Liberator
    Location
    SEQLD
    Date and time
    August 13, 2014, 10:15AM
    • They are big donators to both Labor and LNP...Coincidence I'm sure.

      Commenter
      JohnBB
      Location
      Date and time
      August 13, 2014, 11:07AM
  • Suncorp- bloody impressive. Very happy.

    Commenter
    Apollo
    Location
    Date and time
    August 13, 2014, 10:13AM
  • What's a Daxman to do? Buy or sell? hmmm options are expiring this week, which usually means up until Friday.

    Commenter
    Daxman
    Location
    Sydney
    Date and time
    August 13, 2014, 10:10AM
  • Further to my post yesterday re the purchase/sale of a friends Sydney property.Out of interest I spoke with them about the comments made.

    Re "saving" 3 years rent was mentioned a few times, however, as they pointed out owning the property has cost them over $100k in mortgage payments (mostly interest) which they would not have had if they were renting, so that effectively negates any real "saving" of rent, as they effectively cancel each other out.

    It was also mentioned that they could rent it out as an investment property. They would still have had to live/rent somewhere else in the mean time and did not want the possible hassles from tenants etc. Rental returns are less than 3% gross at the moment in this part of Sydney so it may not have be financially viable for them.

    They feel that for all the stress of "owning" with a large mortgage (and ultimately little tangible to show for it) that they might have been better of renting, using the $150k to invest in shares (in 2011, what was CBA worth then?) or just stick it in the bank at 5% (in 2011) and they would have had a happier time of it.

    As they said, had capital growth and interest rates been at more typical historical levels say 5% capital growth per year and interest rates at 8% they would have been in a world of pain.

    Personally, I think it reinforces the view that property generally only become a financial value proposition over a lengthy period of time of 10 plus years.

    The "property doubles every 7 years" mantra seems mythical to me.

    Anyway, not looking to start a fight with anyone, just thought I would follow up with some interesting points of view.
    cheers

    Commenter
    Boom Boom
    Location
    Date and time
    August 13, 2014, 10:09AM
    • @Boom Boom: Good on your for coming back to us.
      If the rent they would have paid basically offset the interest they paid, that is fine. However, you only included one side of that in your financial analysis. That was the point.
      I still conclude that they have made $100k profit on a $150k over 3 years. Very nice, but only possible due to the current crazy market. They sold at a good time, but buying and selling property that quickly is generally a very bad idea.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 10:16AM
    • You sound young and unsure. Everything you typed out is someone else's opinion.

      "Re "saving" 3 years rent was mentioned a few times, ...... hey effectively cancel each other out.". So you friend got a place to stay for 3 years, pay interest instead of rent. After 3 years they walk away with 5k.
      Fact - had they not bought the place, they will still pay rent unless they live with mum&dad. Yes they will get interest from that 150k deposit but that's another matter.

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 10:22AM
    • @ Boom Boom; yes motivations like stress, security etc are very individual and are not for others to comment on.

      But yesterday you attempted to provide numbers to show that property was a poor investment, and left out the yield (ie rent) on that investment. That's like looking at shares in CBA and omitting the dividend - either disingenuous or not very skilful analysis. Your OWN numbers showed that your friends enjoyed a healthy return on equity.

      This argument that the rent shouldn't be taken into account because you've got to live somewhere is embarrassing. Investments have to be looked at on a stand-alone basis. Eg, CBA shares return 5% fully franked dividends - you don't say I'm getting 5% dividends on CBA but I won't count them because I've got to live somewhere, do you? You don't look at a property any differently. You weigh up the costs and returns on a stand alone basis.

      And btw, no-one sensible says property doubles every seven years. It doesn't. The only time you see those sort of statements are doomsayers putting up straw man arguments. Over a long time, property will grow modestly above inflation (1% maybe 2% if you're lucky). It doesn't double every seven years and doesn't need to.

      Commenter
      pass the red
      Location
      Date and time
      August 13, 2014, 10:33AM
    • Believe there was a long term study that rental cost and interest cost from ownership are roughly the same over the long term. Difference is, at the end of rent you don't have an asset.

      Commenter
      Sceptical Prophet
      Location
      Date and time
      August 13, 2014, 10:45AM
    • Boom Boom, please ignore some of these posts(you seem young blah blah)
      You made me think
      I thought of giving my sons 100k for a dep. on a house in the Uni area Sippy Downs, easy to rent out
      Av price there 435k
      They would need to rent out two rooms
      Looking at the sales graph this area prices have been on the rise quite steeply since 2012
      I think area is key
      But yes property is a liability, my own house bought in 2001 for 343k went to 1.1. now maybe 800k and no gains in Buderim for 4 years
      Have to do math, you made me think
      Upon death the taxman takes 15% of my SMSF, so makes sense to get rid some now
      Also, I may just buy a BMW1220 Gs adventure and bugger off,
      thanks for the post

      Commenter
      stu
      Location
      stu
      Date and time
      August 13, 2014, 10:56AM
    • @got brain
      "You sound young and unsure. Everything you typed out is someone else's opinion".

      Um, this is the experience of my friends not mine, therefore everything I type out is their opinions not mine. Seems reasonable to me

      @pass the red
      As I indicated in my secondary post yesterday the property is owner occupied with a mortgage.
      Rental yield is not a consideration.

      "Your OWN numbers showed that your friends enjoyed a healthy return on equity."

      Unfortunately that's not going to be reflected in their bank balance. As indicated the cost of ownership (mortgage) has effectively cost them $100k in real terms plus the SD, strata, selling etc etc. Im sure they wish they had a "healthy return on equity " but in real terms over the 3 years its not apparent to them.

      all the best

      Commenter
      Boom Boom
      Location
      Date and time
      August 13, 2014, 11:31AM
    • "As I indicated in my secondary post yesterday the property is owner occupied with a mortgage.
      Rental yield is not a consideration."

      So what about the rent that they didn't have to pay for a place to live in the past 3 years? Having a PPOR is ultimately paying rent in the form of interest.

      Your own set of number show your friends didn't pay any rent in the last 3 years and walk away with 5k extra in the end after all expenses. What's wrong with that ?

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 11:55AM
    • @Boom Boom: they bought and came away with $5k extra in the bank, correct?
      If they had not bought, and rented for 3 years, they would have had ~$95k less in the bank (due to rent), correct?
      Therefore, they are $100k better off.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 12:04PM
    • @ boom boom; you say "rental yield is not a consideration because it's owner occupied".

      Sorry, but you don't understand finance 101. If you buy a bottle of wine for $100 that I later offer you $150 for, you have made a 50% yield on that purchase. You are trying to tell me that if you choose to drink it instead it didn't generate any yield at all?

      And you say your friends "can't look at their bank balance and see the return". Sorry again, but the comparison needs to be with where they'd have been otherwise. If they'd been renting for 3 years their bank balance would be a lot lower.

      Commenter
      pass the red
      Location
      Date and time
      August 13, 2014, 12:05PM
    • "If you buy a bottle of wine for $100 that I later offer you $150 for, you have made a 50% yield on that purchase."

      and if it costs $200 to store the wine during that period then you made a loss.
      Finance 101 you have to look at income and expenses to gauge a real return which seems to be the point of the original thread

      Commenter
      tom
      Location
      Date and time
      August 13, 2014, 12:40PM
    • "if they had not bought, and rented for 3 years, they would have had ~$95k less in the bank (due to rent), correct?
      Therefore, they are $100k better off."

      Nope,
      the original purchase price and subsequent sale price includes the buyers original $150k stake (i think that was the figure stated).

      As renters they till have this money available to them

      Commenter
      tom
      Location
      Date and time
      August 13, 2014, 12:48PM
    • Sceptical prophet has the right of it. One overriding reason to own property is that it's no fun living in rented premises during retirement if you're on modest income then. Not to mention the many hassles and restrictions on quality of live involved with a lifetime of renting. Most of us tire of it after a while, and especially once children come into your life.

      Commenter
      guy
      Location
      Pymble
      Date and time
      August 13, 2014, 1:04PM
    • Your own set of number show your friends didn't pay any rent in the last 3 years and walk away with 5k extra in the end after all expenses. What's wrong with that ?

      a $5000 return on $150k outlay over 3 years, on a high risk illiquid asset, you think this is good?

      Commenter
      tom
      Location
      Date and time
      August 13, 2014, 1:07PM
    • As renters they pay for rent the same way as they pay the mortgage - from earnings, not from the original $150k. If they can afford to pay the mortgage (and not have access to the $150k because they spent it on the property) they can pay the rent with that same money/earnings and keep the $150k intact or use it some other way, earn interest or whatever
      I find it funny to hear people say " I bought my house for $400k and sold it 10 years later for $800k so I made $400k", no you didn't, deduct the actual cost of ownership/sale over this period then see what the end result is - you might be surprised.

      Commenter
      tom
      Location
      Date and time
      August 13, 2014, 1:18PM
    • @tom "a $5000 return on $150k outlay over 3 years, on a high risk illiquid asset, you think this is good?"

      So if they were to rent the same place for 3 years. What would they walk away with? Nothing.

      How do you calculate a cost of owning your PPOR without factoring in the rent that you would have to pay if you didn't own? Unless you live with mum&dad of course.

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 1:22PM
    • guy/Pymble,

      agree completely.
      I think the purpose of the original post was to show that property ownership SHORTERM is not necessarily profitable, it needs a long term view. Unfortunately many people fall for the RE spruik and over commit with dreams of a quick fortune

      Commenter
      tom
      Location
      Date and time
      August 13, 2014, 1:53PM
    • @got brain,

      they would walk a with their $150k deposit plus interest or whatever purpose it was put to,

      Commenter
      tom
      Location
      Date and time
      August 13, 2014, 1:56PM
  • Great news for CBA but at these dividends level I'm happy to pay around $AUD 45 per CBA share...pleasing & not one cent more. Anyone who has paid more than the above...well, not very pleasing for you is it?

    Commenter
    Wealth Creator
    Location
    Sydney
    Date and time
    August 13, 2014, 10:09AM
    • CBA is so heavily overvalued - it makes me wonder. The banks are also, in my opinion, highly exposed. They have done very little in the way of making the business 'better' except for off shoring certain BOH jobs. The profit is nearly a direct result of foreign borrowing at record low interest rates. Money in zero to 1pc rated Sovereigns cannot find a home better than Australian shores in the current climate. My super has banks - that is good news - however I see high risk holding too many banking stocks.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      August 13, 2014, 10:23AM
    • Yeah anybody who is up as much as 80% on a purchase price of $45.01 and yielding over 10% gross must be ropeable. With that logic you need to change your screen name.

      Commenter
      Sticks
      Location
      Date and time
      August 13, 2014, 10:26AM
    • The full year dividend is $4.01 per share fully franked. How do you come up with a value of $45?

      Commenter
      TP
      Location
      Date and time
      August 13, 2014, 10:47AM
    • To think I paid $5.40 for them in 1991 and now getting a dividend of $4.01....fantastic.

      Dividend BOOM!

      Commenter
      Allan Mitchell
      Location
      SEQLD
      Date and time
      August 13, 2014, 11:13AM
    • Anyone has done reasonably well if and only if they have bought CBA around $45/share...which translates in...Sell immediately at current prices and run for the hills. Some amateurs boasts about dividends at $4.01...amateurs indeed; taking into consideration annual inflation around 3%, no wonder they'll never be wealthy. Don't go for crumbs,go big. Anything below 8% yield...crumbs. Go Big, if you dare.

      Commenter
      Wealth Creator
      Location
      Sydney
      Date and time
      August 13, 2014, 11:14AM
    • Bought more CBA this morning for $81 for my SMSF. Takes my average CBA price to $46. Not ropeable. I will (hopefully) be collecting dividends from these investments for the next 30+ years. CBA should do a share split to stop the "it is too high a price" silliness.

      Commenter
      Elric
      Location
      Melnibone
      Date and time
      August 13, 2014, 11:27AM
    • @Eric, well said Sir, well said, but you would be mad too if you had to sit outside and watch the party rage on, and on, and on!

      Commenter
      ;)
      Location
      Date and time
      August 13, 2014, 11:36AM
    • Turn your calculator up the right way.

      Commenter
      Upside Down
      Location
      Sydney
      Date and time
      August 13, 2014, 12:34PM
  • Nice 10% drop on Collins Foods (CKF)... I knew that substantial buyer couldn't jack up the shares forever! Would like to see <$2

    Commenter
    GS
    Location
    Date and time
    August 13, 2014, 10:08AM
    • Dammit, it's being bought up again! CURSES!!!!! :/

      Commenter
      GS
      Location
      Date and time
      August 13, 2014, 10:14AM
  • Doesn't look like that dream opening of 82.50 is playing out on CBA. The market's reaction can be fickle, or to read it another way, the big buys were positioned short, so she's a going down. With RIO going ex-div today, that will place a some pressure on the index.

    Commenter
    50BahtLeo
    Location
    Date and time
    August 13, 2014, 10:03AM
    • This market is mental. Record profit not enough? then who was buying it yesterday, only for CBA to get slammed today? Market manipulation more like it, and should be looked into.

      Commenter
      Bazwat
      Location
      Date and time
      August 13, 2014, 10:19AM
    • @ Bazwat. Yep Spot on. Banks started to perform in 2009 and by April of 2010 they all had 3 record profits. Every year since then the banks have come out with record profits yet on many occasions on reporting day down they go. They said investors decided the record profit wasn't enough. Which Investors? Did they ask you ? Didn't ask me. Now 11 record profits in a row for the banks and they are still bagging them. If this was a stock on the Dow the share price would have rocketed upwards but this is the ASX, the market still 1350 points from it's Nov 1 2007 high. A little wonder why when this occurs. Remember last week COH down 30% in revenue so what happens, the stock goes up 10% in one day. The ASX is having a lend of the small poor little punter.. .

      Commenter
      CBA
      Location
      Sydney
      Date and time
      August 13, 2014, 12:46PM
  • Congratulations CBA on another record result! Amazing! Watch the price of banks rise until CBA goes Ex Dividend on 19th August. Buy Buy Buy !

    Commenter
    CBA
    Location
    Date and time
    August 13, 2014, 10:01AM
  • Gordon Gecko, I bought my apartment for $580,000 and I pay about $1,400 for strata per quarter. Rent for my place would be around $600-700/week. I believe the government has been meaning to introduce some regulation against corruption in strata management but it wasn't rolled out because the legislation was deemed too "rushed". Can't find the article right now.

    Commenter
    Sceptical Prophet
    Location
    Date and time
    August 13, 2014, 9:46AM
    • My numbers:
      Bought = $530k
      Rented out = $600 pw
      Strata = $800 pq

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 10:19AM
    • my numbers:
      Bought 2x300k
      Rented out 2x420
      No strata
      Insurance 2x380 p/a

      Commenter
      got brain
      Location
      Date and time
      August 13, 2014, 10:36AM
  • Down down prices are down, and staying down!

    Commenter
    Coles
    Location
    Date and time
    August 13, 2014, 9:29AM
  • Yesterday, the issue of strata fees/body corporate fees on owner-occupied/investment units/apartments was highlighted. Can I just ask how many of you are in this position, and your total annual fees discounting council rates. I was shocked to find some are paying $200 a week(others, maybe more), and I'm thinking...what for? In addition, state what the rental is/would be for that unit. I did some research, and found in one case, the insurance bill alone jumped from $8k to $67k in just one year (if that's true). Thanks. GG.

    Commenter
    Gordon Gekko
    Location
    Greg Coffey World
    Date and time
    August 13, 2014, 9:14AM
    • Everyone's got their finger in the real estate pie. It's all we do. Soon prices will be 20 times earnings then 30, 40, 50. It will just keep rising. Nothing can go wrong.

      Strata fees can rise to $1000 a week, insurance $1000 a week, banks can clip another $1000 a week fees from wherever the government let's them invent next. We're the smart economy everyone talked about.

      Commenter
      JohnBB
      Location
      Date and time
      August 13, 2014, 10:03AM
    • Strata on my 2 bed unit is $800 a quarter, but that is because the building has no lift. When you get into those fancy new buildings, the cost of lifts, pools, gym makes the strata crazy expensive. And most owners never use the pool & gym facilities - money down the drain.

      Commenter
      Irish Phil
      Location
      Date and time
      August 13, 2014, 10:18AM
    • I pay $450 a quarter and the absentee landlords that own the other units complain about paying that. LOL

      Commenter
      TP
      Location
      Date and time
      August 13, 2014, 10:50AM
    • John BB, I recognise you as an inveterate property bear, predicting disaster for property investors year after year, meanwhile property prices keep defying bear-imposed gravity. Maybe rethink your whole approach?

      Commenter
      guy
      Location
      Pymble
      Date and time
      August 13, 2014, 12:58PM
    • Strata managers, fund managers, banks, real estate agents, travel agents.. its just another to distribute those that had wealth to those who will have wealth. Clip that ticket

      Commenter
      Greg
      Location
      Date and time
      August 13, 2014, 1:39PM
Comments are now closed