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.
Sunday, May 22, 2016
Swiss Holding Company Forecasts Chinese Stock Climb
After another anonymous article by an “economic oracle” in the People’s Daily describing an "L-shaped" growth trend, Credit Suisse AG is projecting that same forecast to the stock market.
The SSE Composite Index, which keeps track of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange, will still trade in channels after mass sell-offs at the beginning of the year. This is despite another economic “communication” like those before the last two runs of declines in Chinese equities, according to the Swiss holding company.
The reference to the L shaped trend by Credit Suisse’ Equity Manager Li Chen was first seen in January, when the People's Daily newspaper printed an interview by an "authoritative person" who forecast “a sustained period” with an L-shaped development trend, rather than a quicker V or U recovery. The announcement from Credit Suisse Group AG comes after the third mysterious communiqué last week also appearing on the front page of the national publication, which is usually reserved for in depth articles covering the movements and actions of the president of the nation, multiplying the interview’s importance.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the state of play on Tuesday, “The general sentiment of the interviews has investors worried more than the actual fine print. The facts communicated in the articles are pretty fundamental. Building up huge debt is very risky and China needs to take a hard look at its underperforming loans.”
Unlike the previous lengthy interviews that appeared in the paper there is little chance this one will be a prelude to large scale sell offs. The SSE Composite Index is predicted to fluctuate between a 2,600 to 3,000 margin, quite close to the current levels of 2,843, as a supply of equities that is fast accelerating is reined in by multiple components such as cheap valuation.
According to Chen, "The primary reasons for stock decline, spoken of in financial circles, differs from the policy changes in the articles by this mysterious expert“, the comments coming despite China's local A-share market reduced markedly after the first two printed interviews.
The first article, this time last year, concentrated on “risk control” and a sell-off was subsequently brought on by deleveraging in the stock market, Chen said, and the second piece came before yuan declines that sent the Chinese stock market on a vicious downturn even though the report followed supply side reforms.
The SSE Composite Index, which keeps track of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange, will still trade in channels after mass sell-offs at the beginning of the year. This is despite another economic “communication” like those before the last two runs of declines in Chinese equities, according to the Swiss holding company.
The reference to the L shaped trend by Credit Suisse’ Equity Manager Li Chen was first seen in January, when the People's Daily newspaper printed an interview by an "authoritative person" who forecast “a sustained period” with an L-shaped development trend, rather than a quicker V or U recovery. The announcement from Credit Suisse Group AG comes after the third mysterious communiqué last week also appearing on the front page of the national publication, which is usually reserved for in depth articles covering the movements and actions of the president of the nation, multiplying the interview’s importance.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the state of play on Tuesday, “The general sentiment of the interviews has investors worried more than the actual fine print. The facts communicated in the articles are pretty fundamental. Building up huge debt is very risky and China needs to take a hard look at its underperforming loans.”
Unlike the previous lengthy interviews that appeared in the paper there is little chance this one will be a prelude to large scale sell offs. The SSE Composite Index is predicted to fluctuate between a 2,600 to 3,000 margin, quite close to the current levels of 2,843, as a supply of equities that is fast accelerating is reined in by multiple components such as cheap valuation.
According to Chen, "The primary reasons for stock decline, spoken of in financial circles, differs from the policy changes in the articles by this mysterious expert“, the comments coming despite China's local A-share market reduced markedly after the first two printed interviews.
The first article, this time last year, concentrated on “risk control” and a sell-off was subsequently brought on by deleveraging in the stock market, Chen said, and the second piece came before yuan declines that sent the Chinese stock market on a vicious downturn even though the report followed supply side reforms.
Sunday, May 8, 2016
UN’s Monetary Situation Solid
A top UN administration official reported today that their financial circumstance is "solid and positive," taking note of "some stress" with respect to the regions of customary budget and holds.
"The budgetary shape of the UN is by and large stable," said Yukio Takasu, Under-Secretary-General for Management in a press meeting at UN HQ in New York, amid which he additionally noticed some worries with respect to the normal spending plan and holdings.
Mr. Takasu's briefing came after a 6 monthly presentation to the General Assembly’s Fifth Advisory group, which is tasked with managerial and budgetary concerns, and where he concentrated on evaluation issues, unpaid surveyed commitments, accessible money assets and exceptional installments to included States.
His review included subtle elements on the four principle evaluation zones; the general spending plan, UN peacekeeping operations, worldwide tribunals, and the Capital Chief Strategy.
Mr. Takasu highlighted that the Association's financial balances were good toward the end of 2015, aside from the customary spending plan, which demonstrated a deficit of $217 million. This deficit is being subsidized by a "small backup," he said.
"I believe it's reasonable to survey the sufficiency of the stores," he said, including that he had made this point to the General Assembly prior to today. "The customary spending plan is consistently tight in the last quarter of the year, and this is normal in 2016. The inquiry is whether or not the span of the reserve is adequate," he added.
For the 2015 spending plan, Member States were committed to contribute an aggregate of $2.771 billion, an expansion of $159 million from 2014. Installments were $237 million higher in 2015 than in 2014, Mr. Takasu said.
Unpaid surveyed commitments remained at $1.43 billion starting 30 April 2016, down $163 million from the same period the year before.
For peacekeeping operations, which work on a 1 July to 30 June monetary cycle, Mr. Takasu said the aggregate of unpaid appraisals toward the end of 2015 was $976 million, mirroring a decrease of $306 million from the previous year.
“Starting 30 April, new appraisals of $3.9 billion had been issued, of which $2.4 billion stay unpaid,” he said.
He stated that unpaid installments to Member States – which added up to $824 million toward the end of 2015 – were anticipated to drop to $818 million before the end of the year, as an after effect of a continued increase in the speed of installments received for troops, police and hardware.
The UN Secretariat will consolidate the data given by Mr. Takasu today into a report from Secretary-General Ban Ki-moon that will be introduced to the Fifth Council on 11 May.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented “I think this is excellent news from the UN showing that Member states finances are in great hands moving forward. I’m very confident in the UN’s ability to handle the collective finances responsibly”.
"The budgetary shape of the UN is by and large stable," said Yukio Takasu, Under-Secretary-General for Management in a press meeting at UN HQ in New York, amid which he additionally noticed some worries with respect to the normal spending plan and holdings.
Mr. Takasu's briefing came after a 6 monthly presentation to the General Assembly’s Fifth Advisory group, which is tasked with managerial and budgetary concerns, and where he concentrated on evaluation issues, unpaid surveyed commitments, accessible money assets and exceptional installments to included States.
His review included subtle elements on the four principle evaluation zones; the general spending plan, UN peacekeeping operations, worldwide tribunals, and the Capital Chief Strategy.
Mr. Takasu highlighted that the Association's financial balances were good toward the end of 2015, aside from the customary spending plan, which demonstrated a deficit of $217 million. This deficit is being subsidized by a "small backup," he said.
"I believe it's reasonable to survey the sufficiency of the stores," he said, including that he had made this point to the General Assembly prior to today. "The customary spending plan is consistently tight in the last quarter of the year, and this is normal in 2016. The inquiry is whether or not the span of the reserve is adequate," he added.
For the 2015 spending plan, Member States were committed to contribute an aggregate of $2.771 billion, an expansion of $159 million from 2014. Installments were $237 million higher in 2015 than in 2014, Mr. Takasu said.
Unpaid surveyed commitments remained at $1.43 billion starting 30 April 2016, down $163 million from the same period the year before.
For peacekeeping operations, which work on a 1 July to 30 June monetary cycle, Mr. Takasu said the aggregate of unpaid appraisals toward the end of 2015 was $976 million, mirroring a decrease of $306 million from the previous year.
“Starting 30 April, new appraisals of $3.9 billion had been issued, of which $2.4 billion stay unpaid,” he said.
He stated that unpaid installments to Member States – which added up to $824 million toward the end of 2015 – were anticipated to drop to $818 million before the end of the year, as an after effect of a continued increase in the speed of installments received for troops, police and hardware.
The UN Secretariat will consolidate the data given by Mr. Takasu today into a report from Secretary-General Ban Ki-moon that will be introduced to the Fifth Council on 11 May.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented “I think this is excellent news from the UN showing that Member states finances are in great hands moving forward. I’m very confident in the UN’s ability to handle the collective finances responsibly”.
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