Australia’s trade deficit decreased 29% in spring as commodity prices took a positive upturn.
Official numbers from the Australian Bureau of Statistics demonstrated the balance of import and export revenues fell to $2.16 billion for the month, from $3.41bn in February.
Exports increased 4%, while imports climbed only 0.7 points.
The positive increase was supported by a sharp bounce back commodity valuations according to analysts.
"Not surprisingly, metal minerals climbed. However, the 0.7pc increase was somewhat short of what we anticipated given the [21 per cent] rise in the Chinese spot price for iron," Shizuoka Capital Wealth Management Global Co-Head of the Investment Management Division, Michael Lane said.
"The shock this month was the almost 60% increase in gold trading internationally,” added Lane.
The April bounce in commodity costs ought to guarantee a further narrowing of the deficit before it widens again later in the year. The cost of both coal and iron mineral rose in April which looks good for the month to month read on the exchange balance" CBA financial specialist Gareth Aird said.
"However, we see pressure on the present spot cost of iron metal ($US60) and expect the cost of iron to fall in the later part of 2016.”
In general terms, the balance of products and services was a shortfall of $2.8bn, down 8% on the previous month.
The data coincided with a better than-anticipated reading on retail numbers, with the figures aiding the Aussie dollar in its return to USD0.75.
Thursday, June 23, 2016
Global Hospitality Giant to Acquire Boutique Hotel Group
SBE, the world renowned hospitality company, has struck a deal with Morgans Hotel Group that will facilitate a friendly takeover this year. Part of the terms of the deal will see all outstanding shares of Morgans stock acquired by SBE for just over $2 per share, which, along with the exchange of Morgans Series A securities, the assumption of obligations and transfer of leases, represents a total agreement value of close to $800 million.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the share acquisition at his blog “SBE seemed to have concentrated their end of the deal on favourable per share prices which represent a 69 percent premium over Morgans' initial closing price in the first week of May. With the deal including ownership of the Hudson hotel in New York and the Delano property in Miami Beach this is definitely going to raise the global profile of SBE to new levels”
Morgans is a low scale but highly influential leisure operator that, under its founders, nightclub legends Ian Schrager and Steve Rubell, helped explode the boutique hotel scene in the 80s. It featured elegantly designed properties with lobbies that became public gathering areas.
More recently, Morgans has suffered from poor financial returns, board room squabbling and loss of market share as the big hotel chains began to compete in the niche boutique, or “lifestyle”, sector.
“The failure of negotiations last year was a setback for SBE. But the end result worked in their favor financially. The $2.25 a share is about 0.3 percent of the price of where the shares were trading when SBE and Morgans originally began talks.” Lane added
The deal, which was passed by the SBE Board, is expected to be completed late this year assuming that various regulatory approvals are forthcoming. The agreement is also subject to the refinancing of Morgans' property loan agreements, and customary closing settlements, including a green light for the transaction by the company’s major shareholders who represent just under 30% of the firms outstanding shares of common stock.
SBE commented to press that it has procured assurances to finance the project through a combination of income from the selloff of new equity in the merged company to an outside investor, a new revolver and cash from the refinancing of its current loans.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the share acquisition at his blog “SBE seemed to have concentrated their end of the deal on favourable per share prices which represent a 69 percent premium over Morgans' initial closing price in the first week of May. With the deal including ownership of the Hudson hotel in New York and the Delano property in Miami Beach this is definitely going to raise the global profile of SBE to new levels”
Morgans is a low scale but highly influential leisure operator that, under its founders, nightclub legends Ian Schrager and Steve Rubell, helped explode the boutique hotel scene in the 80s. It featured elegantly designed properties with lobbies that became public gathering areas.
More recently, Morgans has suffered from poor financial returns, board room squabbling and loss of market share as the big hotel chains began to compete in the niche boutique, or “lifestyle”, sector.
“The failure of negotiations last year was a setback for SBE. But the end result worked in their favor financially. The $2.25 a share is about 0.3 percent of the price of where the shares were trading when SBE and Morgans originally began talks.” Lane added
The deal, which was passed by the SBE Board, is expected to be completed late this year assuming that various regulatory approvals are forthcoming. The agreement is also subject to the refinancing of Morgans' property loan agreements, and customary closing settlements, including a green light for the transaction by the company’s major shareholders who represent just under 30% of the firms outstanding shares of common stock.
SBE commented to press that it has procured assurances to finance the project through a combination of income from the selloff of new equity in the merged company to an outside investor, a new revolver and cash from the refinancing of its current loans.
Experts say Japanese currency intervention will help regional outlook
A group of IMF researchers have found that Japan’s unorthodox currency easing policy has had a surprisingly positive effect on most surrounding economies in the region, and have released their findings in a paper.
The country’s interventions into the currency exchange markets, an attempt to lower the yen’s value, have been ill received by the U.S. with both nations coming together at a G-7 summit in Japan this week where the subject is likely to be hotly debated.
The research paper is the first of its kind and claims to offer a model of the knock on effect of Japan’s monetary easing policy on emerging S.E. Asian economies.
Qualitative and quantitative easing (QQE) has been practised for over 3 years now and has been targeting a number of assets including various funds, bonds and real estate as well as directly affecting the currency markets. The outcome has been a significant drop in the yen versus the greenback from 80 at the start of easing to about 120 last year.
The report shows that regional economies are benefitting from this. Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the findings in a phone interview, “What we are seeing is a positive effect on emerging S.E. Asian currencies as the QQE goes full throttle in Japan. Equity prices go up all across the region in response to the policy, not just in Japan.”
Lane added, “There has been a gain in output, inflation and capital investment in the smaller economies. Basically all this means a generally positive effect on economic growth and a healthy outlook for the region overall.”
The paper also reports that the jumps in equity prices also prompts a rise in general confidence, which spurs further investment. A good example is China, a country with particularly solid trade partnerships with Japan.
The International Monetary Fund research report is by no means the official line, nor does it represent the consensus view of IMF staff, however, with Japan likely to come up against stern opposition from the United States at the forthcoming Group of seven summit concerning this issue, the paper comes as welcome and much needed ammunition for the Finance Minister Taro Aso as he looks to gain allies to his side of the argument and build backing for monetary easing to counter the inevitable U.S. objections.
Michael Lane continued, “The meetings are going to be very interesting. Japan has these new stats coming from a very prominent source and this could tip the balance in their favour.”
The country’s interventions into the currency exchange markets, an attempt to lower the yen’s value, have been ill received by the U.S. with both nations coming together at a G-7 summit in Japan this week where the subject is likely to be hotly debated.
The research paper is the first of its kind and claims to offer a model of the knock on effect of Japan’s monetary easing policy on emerging S.E. Asian economies.
Qualitative and quantitative easing (QQE) has been practised for over 3 years now and has been targeting a number of assets including various funds, bonds and real estate as well as directly affecting the currency markets. The outcome has been a significant drop in the yen versus the greenback from 80 at the start of easing to about 120 last year.
The report shows that regional economies are benefitting from this. Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the findings in a phone interview, “What we are seeing is a positive effect on emerging S.E. Asian currencies as the QQE goes full throttle in Japan. Equity prices go up all across the region in response to the policy, not just in Japan.”
Lane added, “There has been a gain in output, inflation and capital investment in the smaller economies. Basically all this means a generally positive effect on economic growth and a healthy outlook for the region overall.”
The paper also reports that the jumps in equity prices also prompts a rise in general confidence, which spurs further investment. A good example is China, a country with particularly solid trade partnerships with Japan.
The International Monetary Fund research report is by no means the official line, nor does it represent the consensus view of IMF staff, however, with Japan likely to come up against stern opposition from the United States at the forthcoming Group of seven summit concerning this issue, the paper comes as welcome and much needed ammunition for the Finance Minister Taro Aso as he looks to gain allies to his side of the argument and build backing for monetary easing to counter the inevitable U.S. objections.
Michael Lane continued, “The meetings are going to be very interesting. Japan has these new stats coming from a very prominent source and this could tip the balance in their favour.”
Saturday, June 11, 2016
Fed announcements expected, Greece bail out discussed
All ears will be on U.S. Federal Reserve officials this week as focus shifts to a possible coming interest rate hike. Meanwhile, in Europe, finance ministers are in negotiations concerning a final plan for aid to struggling Athens.
Investors have reacted positively to recent Fed press releases and meeting minutes with the dollar gaining together with euro zone bond yields.
The general consensus in the market is that the Fed will bring in a hike soon; the only question is whether it will be this month or July. Comments from officials in the last couple of days haven’t changed that sentiment.
“It’s likely the Fed will hold off until next month,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management, “They will have a look at the outcome of the G-7 economic summit in Japan this week which could affect things. Major events in Europe could also play a part,” he added.
With the Brexit referendum due next month, the Fed could very well hold off.
The minutes from the latest meeting indicated that their most important preconditions for a rate increase were signs of economic growth this quarter as well as positive improvement regarding inflation and employment data.
“Q2 is expected to look very solid as data has showed that the economy performed much better than expected in the first quarter,” Lane said via email. “Data from Britain has shown that fallout from the Brexit vote is unlikely to shake up the bigger economies in Europe.”
Greece talks
With the Eurogroup meeting of finance ministers coming up this week, the feeling is that a new agreement will be worked on to help Athens continue to pay off its creditors in the coming year.
Officials have also commented that they may help Greece to restructure its debt obligations in order to make it more sustainable. The IMF has previously offered objections to the idea and these differences will need to be straightened out before any firm plan can go ahead.
The IMF insists that investors need more transparency with regard to the debt repayment situation, while European authorities want to wait a few years until a final decision is made on that issue.
Analysts at RBC Capital said, “Concessions are likely from the euro side as bringing the IMF on board with any plan is crucial. We don’t expect a firm decision this week but very soon in the near future.”
Investors have reacted positively to recent Fed press releases and meeting minutes with the dollar gaining together with euro zone bond yields.
The general consensus in the market is that the Fed will bring in a hike soon; the only question is whether it will be this month or July. Comments from officials in the last couple of days haven’t changed that sentiment.
“It’s likely the Fed will hold off until next month,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management, “They will have a look at the outcome of the G-7 economic summit in Japan this week which could affect things. Major events in Europe could also play a part,” he added.
With the Brexit referendum due next month, the Fed could very well hold off.
The minutes from the latest meeting indicated that their most important preconditions for a rate increase were signs of economic growth this quarter as well as positive improvement regarding inflation and employment data.
“Q2 is expected to look very solid as data has showed that the economy performed much better than expected in the first quarter,” Lane said via email. “Data from Britain has shown that fallout from the Brexit vote is unlikely to shake up the bigger economies in Europe.”
Greece talks
With the Eurogroup meeting of finance ministers coming up this week, the feeling is that a new agreement will be worked on to help Athens continue to pay off its creditors in the coming year.
Officials have also commented that they may help Greece to restructure its debt obligations in order to make it more sustainable. The IMF has previously offered objections to the idea and these differences will need to be straightened out before any firm plan can go ahead.
The IMF insists that investors need more transparency with regard to the debt repayment situation, while European authorities want to wait a few years until a final decision is made on that issue.
Analysts at RBC Capital said, “Concessions are likely from the euro side as bringing the IMF on board with any plan is crucial. We don’t expect a firm decision this week but very soon in the near future.”
Sunday, June 5, 2016
TV-Internet Takeover "will drive investment”
Over 30 million consumers in 40 states of the U.S. will be served by a brand new entity formed by the recent combination of Charter Communications Inc. and Time Warner Cable. Bright House Networks LLC is also included in the new company.
Charter Communications announced Thursday that final stages of its acquisition of the two other companies had been completed, effectively creating the nation’s largest internet provider.
All this comes nearly a year after the first announcements of the deal was made. Charter has fought hard for federal and state regulatory approval since then, which has finally been passed.
According to Charter, the deal to acquire Time Warner Cable and Bright House is valued at nearly $70 billion, not including debt.
Experts believe the merger has created an attractive new company for investment. Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented in a phone interview, “This deal is not only good for the end consumer, making internet services faster and developing infrastructure for the networks….it will also drive investment into the new company. They are a market leader in the communications sector now.”
The deal didn’t sail as smoothly through the regulators as Charter would have liked, with the U.S. Justice Department giving antitrust approval only with a firm set of conditions attached that will limit the company from using its influence to stifle competition.
As technology moved forward the pay TV industry has seen a rapid decline due to web services such as Hulu and Netflix. These companies lack live TV and current shows, however others, such as HBO NOW and Sling TV could give Charter a run for their money in the field.
A condition of the Justice Department deal is that Charter will not have power over the content providers, allowing sales of their products online. There will also be FCC restrictions on the company for six years more years.
Charter will be required to branch out their internet services to a further 2 million customers within the set time period, with a competitor serving another million.
The chase to acquire TWC goes back around 3 years. Billionaire CEO of Telecommunications Inc, John Malone had courted the company with his offshoot Liberty Media Corp, which backs Charter.
Time Warner initially rejected early offers and referred to the bids as “unsolicited”. Comcast Corp, then the top cable company in the country, nearly came to the rescue with a rival offer, but the deal eventually collapsed, leaving the way clear for Charter to continue their acquisition.
Charter Communications announced Thursday that final stages of its acquisition of the two other companies had been completed, effectively creating the nation’s largest internet provider.
All this comes nearly a year after the first announcements of the deal was made. Charter has fought hard for federal and state regulatory approval since then, which has finally been passed.
According to Charter, the deal to acquire Time Warner Cable and Bright House is valued at nearly $70 billion, not including debt.
Experts believe the merger has created an attractive new company for investment. Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented in a phone interview, “This deal is not only good for the end consumer, making internet services faster and developing infrastructure for the networks….it will also drive investment into the new company. They are a market leader in the communications sector now.”
The deal didn’t sail as smoothly through the regulators as Charter would have liked, with the U.S. Justice Department giving antitrust approval only with a firm set of conditions attached that will limit the company from using its influence to stifle competition.
As technology moved forward the pay TV industry has seen a rapid decline due to web services such as Hulu and Netflix. These companies lack live TV and current shows, however others, such as HBO NOW and Sling TV could give Charter a run for their money in the field.
A condition of the Justice Department deal is that Charter will not have power over the content providers, allowing sales of their products online. There will also be FCC restrictions on the company for six years more years.
Charter will be required to branch out their internet services to a further 2 million customers within the set time period, with a competitor serving another million.
The chase to acquire TWC goes back around 3 years. Billionaire CEO of Telecommunications Inc, John Malone had courted the company with his offshoot Liberty Media Corp, which backs Charter.
Time Warner initially rejected early offers and referred to the bids as “unsolicited”. Comcast Corp, then the top cable company in the country, nearly came to the rescue with a rival offer, but the deal eventually collapsed, leaving the way clear for Charter to continue their acquisition.
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