Founder and CEO, Europacifica Consulting

Naomi Fink

Founder and CEO

Europacifica Consulting

Macroeconomics

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/009/868/original/Chart2.Australia.Risk_.Pref_.png?1467594254" class="editor-image img-responsive" data-smartkarma-image-id="9868"><figcaption class="figcaption">Australians risk-averse? Not today, mate (Source: Europacifica)</figcaption></figure><p> </p><p>Speculation that Australia will lose its <a href="http://www.afr.com/news/politics/election/election-2016-the-trafficjam-political-culture-threatening-aaa-credit-rating-20160703-gpxil9" target="_blank">AAA rating</a> due to political deadlock at the polls has probably been enhanced by <a href="http://www.telegraph.co.uk/business/2016/06/27/george-osborne-to-speak-in-attempt-to-calm-markets-following-bre/" target="_blank">the final downgrade</a> to the UK's own rating, motivated by the recent EU referendum.  Medium-term, the "lucky country" might very well escape the fate of capital flight, given there are many more controversial events (such as US elections) that affect Australia little. Whenever appetite for risk revives…</p>

Australians risk-averse? Not today, mate (Source: Europacifica) Speculation that Australia will lose its AAA rating due to political deadlock at the polls has probably been enhanced by the final downgrade to the UK's own rating, motivated by the recent EU referendum.  Medium-term, the "lucky country" might very well escape the fate of capital flight, given there are many more controversial events (such as US elections) that affect Australia little. Whenever appetite for risk revives…

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

<div class="content-highlight"><p><strong><em>The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors.</em></strong></p></div><p><strong><em> </em></strong></p><p>We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.</p><p>We see the following evidence in our analysis:</p><p> </p><ul><li><div class="content-highlight">The failure of some…</div></li></ul>

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for investors. We live in a world where investors are uncertain about asset values both in financial and non-financial companies.  Whilst a lot is written about the nature of bad debts at banks, little has been comprehensively written about the balance sheets of non-financial companies.We see the following evidence in our analysis: The failure of some…

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

<p><em>Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.</em></p>

Domestic Australian factors are being overshadowed by global developments.  These global drivers account for both its rapid rebound over the last month and its significant correction in recent days.  Throughout this move we have been skeptical that the AUD can sustain its rally with significant local political and economic uncertainty.  These risks remain and continue to make it difficult to hold long AUD positions.  On the other hand, political and economic uncertainty in many alternative currencies are equally troubling. In Australia, economic momentum picked up in 2015, but has been more mixed in 2016.  The housing market is starting to ebb from strong levels, political risks remain elevated, bank equity performance has been weak, potentially a drag on confidence.  However, Global drivers remain in control, and while uncertainty is elevated in Australia, it is not clear that it will be sufficient to throw the Australian economy off course.  The RBA Statement continued to express a steady policy outlook albeit with an easing bias.

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Equity Bottom-Up

iShares MSCI Australia / Equity Bottom-Up

<ul><li>In May, I published a report citing recent journal literature that sought to decompose Buffett&rsquo;s Alpha.&nbsp; The authors attribute Warren Buffett&rsquo;s long track record of strong returns not to luck but to reward for leveraged exposure to safe or low beta, quality stocks that are cheap.&nbsp; I applied these principles to the ASX200 stocks and constructed long and short portfolios of around ten stocks each.</li><li>Given the passage of over six months since the initial&nbsp;report was published, this note is designed to report on the performance of the two portfolios as well as expand and update Mr Buffett&rsquo;s investment methodology as applied to the ASX200 stocks.&nbsp;&nbsp;The strategy has been impressive,&nbsp;with the long portfolio yielding an equal weighted return of around 3%, well above the ASX200 (-10%) and short portfolio (-20%).&nbsp; Thus the strategy has produced a long-short return of +23%.</li><li>Evidente has made a number of enhancements to the methodology, including the addition of a market sentiment measure to assist with market timing.&nbsp; The updated&nbsp;long portfolio represents a diverse mix of sectors while energy stocks&nbsp;are still&nbsp;dominate&nbsp;the short portfolio.&nbsp; Thus the key macro risk for the shorts&nbsp;is&nbsp;the prospect of renewed strength in&nbsp;global oil prices in 2016.&nbsp;&nbsp;</li></ul>

In May, I published a report citing recent journal literature that sought to decompose Buffett&rsquo;s Alpha.&nbsp; The authors attribute Warren Buffett&rsquo;s long track record of strong returns not to luck but to reward for leveraged exposure to safe or low beta, quality stocks that are cheap.&nbsp; I applied these principles to the ASX200 stocks and constructed long and short portfolios of around ten stocks each.Given the passage of over six months since the initial&nbsp;report was published, this note is designed to report on the performance of the two portfolios as well as expand and update Mr Buffett&rsquo;s investment methodology as applied to the ASX200 stocks.&nbsp;&nbsp;The strategy has been impressive,&nbsp;with the long portfolio yielding an equal weighted return of around 3%, well above the ASX200 (-10%) and short portfolio (-20%).&nbsp; Thus the strategy has produced a long-short return of +23%.Evidente has made a number of enhancements to the methodology, including the addition of a market sentiment measure to assist with market timing.&nbsp; The updated&nbsp;long portfolio represents a diverse mix of sectors while energy stocks&nbsp;are still&nbsp;dominate&nbsp;the short portfolio.&nbsp; Thus the key macro risk for the shorts&nbsp;is&nbsp;the prospect of renewed strength in&nbsp;global oil prices in 2016.&nbsp;&nbsp;

Lifting The Lid On Warren Buffett's Investment Secrets (Update)

<div>In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further, and for the composition of growth to evolve, reflecting four key developments.</div><ul>
<li>Slower growth of the working age population (which is largely baked in).</li>
<li>Urbanisation to continue albeit at a more gradual pace.</li>
<li>The still large productivity gap between China and advanced economies to narrow further, the speed of which is subject to the implementation of…</li>
</ul>

In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further, and for the composition of growth to evolve, reflecting four key developments.
Slower growth of the working age population (which is largely baked in).
Urbanisation to continue albeit at a more gradual pace.
The still large productivity gap between China and advanced economies to narrow further, the speed of which is subject to the implementation of…


Australia

IGO Limited operates as an exploration company. The Company explores and mines copper, ore, nickel, gold, and other mineral resources. IGO serves customers worldwide.

Sandfire Resources Limited is an Australian copper and gold producer. The Company's key asset is the DeGrussa Copper-Gold Mine located in Western Australia. Sandfire also has exploration assets targeting a range of commodities throughout Australia.

Perseus Mining Limited is a mining and exploration company. The Company acquires, explores, develops, mines, and produces gold. Perseus Mining conducts its mining operations in Africa and Australia.

Genesis Minerals Limited is an Australian-based mineral exploration company. The Company acquires commercially significant mineral deposits that can be brought into production.

AVZ Minerals Limited operates as a mineral exploration company. The Company acquires, develops, mines, and produces lithium, tin, tantalum, and other base metals. AVZ Minerals serves customers globally.

De Grey Mining Limited is an exploration and mining company focusing on zinc, gold, platinum, silver and base metals.

Red 5 Limited is a minieral exploration and development company. The Company's principal asset is the Siana Gold Project in the Philippines held under a Mineral Production Sharing Agreement by a Red5 Philippine compliant company. Red 5's second asset is the Mapawa MPSA, located north of Siana.

Iluka Resources Limited is involved in the mining, concentration and separation of mineral sands and titanium minerals. The Company also produces ilmenite and other titani-ferrous concentrates, zircon, and synthetic rutile along with the exploration of coal. Iluka's products are exported throughout the world.

MMG Limited is a mid-tier global resources company which explores, develops and mines base metal projects around the world.  The Company currently owns and operates the Century, Golden Grove and Rosebery mines in Australia, the Kinsevere mine in the Democratic Republic of Congo (DRC) and the LXML Sepon mine in Laos.

Lynas Corporation Limited explores and mines for rare earth minerals such as cerium and neodymium.

Angang Steel Company Limited produces steel products which include cold rolled sheets, steel rail, pipe billets, wire rods, thick plates, and other steel products.

Hyundai Steel Company is an electric furnace steel maker.  The Company manufactures concrete reinforcing bars, H beams, stainless steel sheets, cast steel, and other steel products.  Hyundai Steel sells its products to the domestic and overseas markets.

Shanxi Taigang Stainless Steel Co., Ltd. manufactures and markets stainless steel ingots and billets.  The Company also processes and produces other steel products including hot rolled steel plates and tandem steel plates.

China Minmetals Rare Earth Co Ltd engages in south ionic rare earth separation and processing. The Company mainly focuses on the production and distribution of rare earth oxide, rare earth metal, and highly processed products of rare earth, as well as the research and consult service of rare earth techniques.

Yunnan Tin Co., Ltd. produces and markets tin, tin alloy products, and tin chemicals.  The Company sells its tin products under the YT trade mark.

Ta Chen Stainless Pipe Co., Ltd. manufactures and markets various types of stainless steel pipes, butt-welded fittings, casting fittings, and stainless steel ball valves.  The Company primarily sells its products to the United States, Canada, Europe, South East Asia, South Africa, Australia, New Zealand, South America, and the Middle East.

Coeur Mining, Inc., through its subsidiaries, explores, develops, operates, and/or owns silver and gold mining properties and companies.  The Company's properties are located primarily in the United States, Australia, and South America.

Hindustan Copper Limited is a vertically integrated multi-unit copper producer in India engaged in a wide spectrum of activities ranging from mining, beneficiation, smelting, refining and manufacturing of copper cathodes, continuous cast wire rods and wire bars. The Company was the first Indian Copper producer to get ISO-9002 certificate for its Continuous Cast Wire Rod Plant.

Beijing Shougang Co., Ltd. manufactures and markets rolled steel, steel billets, and other steel products.  Through its subsidiaries, the Company produces compact discs and software.  Beijing Shougang sells its steel products worldwide.

Inner Mongolia Xingye Mining Co Ltd. explores for and produces metals.  The Company operates zinc and lead mines and smelters in Inner Mongolia in China.

Inner Mongolia Xingye Mining C (000426 CH)

Alumina Limited is an Australian resource company that produces alumina.  The Company owns about 40% of Alcoa World Alumina and Chemicals through a joint venture with Alcoa.

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Alumina Ltd (AWC AU)

Australia a Risk Haven? Not Today, Mate

Speculation that Australia will lose its AAA rating due to political deadlock at the polls has probably been enhanced by the final downgrade to...

Naomi Fink

Beware Impairments in EM and Asia

The failure to use or the aggressive implementation of asset write downs in emerging markets and Asia will have far reaching implications for...

Mark Artherton

AmpGFX - AUD in No Man's Land, Political and Economic Risks Remain Elevated

Domestic Australian factors are being overshadowed by global developments. These global drivers account for both its rapid rebound over the last...

Greg Gibbs

Lifting The Lid On Warren Buffett's Investment Secrets (Update)

In May, I published a report citing recent journal literature that sought to decompose Buffett’s Alpha. The authors attribute Warren Buffett’s...

Sam Ferraro

RBA Downbeat on Commodity Price Outlook

In a speech today, Christopher Kent, Assistant Governor, flagged that the RBA expects the speed of China's economic development to ease further,...

Sam Ferraro

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