Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

Viva Energy REIT plans to raise US$682 (A$911m) through its IPO in order to fund its purchase of 425 service stations from its parent Viva Energy.The deal offers exposure to a different asset class, along with a long lease and steady built-in growth. In comparison to other retail REITs, it is seemingly being offered at reasonable valuations. Although the properties already seem to be under some pressure and longer-term prospects aren't as certain.

Viva Energy REIT plans to raise US$682 (A$911m) through its IPO in order to fund its purchase of 425 service stations from its parent Viva Energy.The deal offers exposure to a different asset class, along with a long lease and steady built-in growth. In comparison to other retail REITs, it is seemingly being offered at reasonable valuations. Although the properties already seem to be under some pressure and longer-term prospects aren't as certain.

Viva Energy REIT - Time to Fill up the Tank

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

As a consequence of increasing global risks, tougher regulatory demands, intensifying pressure on net interest margins, higher bad debts and lower than expected returns on equity we reduce earnings forecasts, fair value estimates and rebase medium- to longer-term dividend payout ratios lower to more sustainable long-term levels for three of the four wide moat-rated Australian banks: Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation. We cut Australia and New Zealand Banking Group's earnings forecasts and fair value estimate in March 2016 and now rebase its longer-term dividend payout ratio lower. Our preferred banks are the big retail-focused, New South Wales-based, banks Westpac and Commonwealth Bank due to their lower risk profiles, higher ROEs, higher NIMs, lower cost/income ratios, consistently lower-loan-loss rates, less volatility in earnings, and larger exposures to the strongly performing New South Wales economy.Analyst: David Ellis

As a consequence of increasing global risks, tougher regulatory demands, intensifying pressure on net interest margins, higher bad debts and lower than expected returns on equity we reduce earnings forecasts, fair value estimates and rebase medium- to longer-term dividend payout ratios lower to more sustainable long-term levels for three of the four wide moat-rated Australian banks: Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corporation. We cut Australia and New Zealand Banking Group's earnings forecasts and fair value estimate in March 2016 and now rebase its longer-term dividend payout ratio lower. Our preferred banks are the big retail-focused, New South Wales-based, banks Westpac and Commonwealth Bank due to their lower risk profiles, higher ROEs, higher NIMs, lower cost/income ratios, consistently lower-loan-loss rates, less volatility in earnings, and larger exposures to the strongly performing New South Wales economy.Analyst: David Ellis

Challenges Mount for the Wide Moat-Rated Australian Banks

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> 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…

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…

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

<ul><li>In this post, Evidente launches its benchmark aware, long only model portfolio for Australia for the 2017 financial year.  It is designed to be a high conviction, concentrated portfolio with no more than 30 stocks and an active share of no less than 30%.  The stock selection process represents a mix of top down and industry thematics as well as bottom-up factors.  </li><li>The key macro theme that guides portfolio construction is the prospect that interest rates will remain low in Australia and globally for an extended period, thanks to the substantial reduction in the value of human capital.  The model portfolio has a defensive bias despite stretched valuations, notably overweight positions in stocks offering earnings certainty, including: listed infrastructure stocks, utilities, healthcare and REITs.  An overweight bet in discretionary retailers represents the key cyclical exposure, based on the prospect that consumer spending will remain the key driver of growth and help to ameliorate the effects of Australia's capex cliff.</li><li>The key bottom up criterion used in stock selection is a high internal rate of return (IRR), which is backed out using a dividend discount model.  Stocks that have the highest IRRs and make it into the model portfolio include: Wesfarmers, Graincorp, Bluescope Steel, Medibank Private, Caltex and Worley Parsons.   Model performance and updated constituents will be published quarterly on Smartkarma.</li></ul>

In this post, Evidente launches its benchmark aware, long only model portfolio for Australia for the 2017 financial year.  It is designed to be a high conviction, concentrated portfolio with no more than 30 stocks and an active share of no less than 30%.  The stock selection process represents a mix of top down and industry thematics as well as bottom-up factors.  The key macro theme that guides portfolio construction is the prospect that interest rates will remain low in Australia and globally for an extended period, thanks to the substantial reduction in the value of human capital.  The model portfolio has a defensive bias despite stretched valuations, notably overweight positions in stocks offering earnings certainty, including: listed infrastructure stocks, utilities, healthcare and REITs.  An overweight bet in discretionary retailers represents the key cyclical exposure, based on the prospect that consumer spending will remain the key driver of growth and help to ameliorate the effects of Australia's capex cliff.The key bottom up criterion used in stock selection is a high internal rate of return (IRR), which is backed out using a dividend discount model.  Stocks that have the highest IRRs and make it into the model portfolio include: Wesfarmers, Graincorp, Bluescope Steel, Medibank Private, Caltex and Worley Parsons.   Model performance and updated constituents will be published quarterly on Smartkarma.

Launch of Evidente's Long Only Model Portfolio (Australia)

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.

We think the case is clear for the RBA to cut rates tomorrow and are predicting this outcome.  The much lower core inflation reading, evidence of tightening bank credit conditions, some softening recently in credit growth, cooler job vacancies, a stronger AUD, some renewed doubts on China and timing of the 2 July election suggest the RBA needs to be decisive and get ahead of expectations.  Consequently we see further weakness in the AUD and continue to favour gold as we discussed last week outlining risks in China that may spill over to global asset markets and the rebounding JPY that may push the BoJ toward more easing.

We think the case is clear for the RBA to cut rates tomorrow and are predicting this outcome.  The much lower core inflation reading, evidence of tightening bank credit conditions, some softening recently in credit growth, cooler job vacancies, a stronger AUD, some renewed doubts on China and timing of the 2 July election suggest the RBA needs to be decisive and get ahead of expectations.  Consequently we see further weakness in the AUD and continue to favour gold as we discussed last week outlining risks in China that may spill over to global asset markets and the rebounding JPY that may push the BoJ toward more easing.

Australia

Charter Hall Long WALE REIT operates as a real estate investment trust. The Company invests in office, industrial, and retail properties that are leased to corporate and government tenants on long-term. Charter Hall Long WALE REIT conducts business in Australia.

Ingenia Communities Group manages, develops and invests in a portfolio of retirement village accomodation housing units.

Charter Hall Retail REIT owns a portfolio of supermarkets and shopping centers located in non-metropolitan areas throughout Australia, New Zealand and the United States.

National Storage REIT is a Real Estate Investment Trust.  The Trust owns self storage facilities in Brisbane, Sunshine Coast and Gold Coast in Queensland, Sydney Western Suburbs in New South Wales, Melbourne and Geelong in Victoria, Adelaide in South Australia, Perth in Western Australia and Hobart in Tasmania.

Growthpoint Properties Australia Limited operates as a real estate investment trust. The Company focuses on office, residential, and industrial sectors. Growthpoint Properties Australia serves customers in Australia.

Growthpoint Properties Australia (GOZ AU)

Arena REIT operates as a real estate investment trust. The Trust owns a portfolio in sectors such as childcare, healthcare, education and government tenanted facilities in Australia.

Cromwell Property Group is a property and funds manager. The Company, through its subsidiary, provides funds management, property transactions, property and facilities management, finance, compliance, debenture issues, and debt management.

Rural Funds Group is a real estate property trust which owns Australian agricultural assets.

Charter Hall Social Infrastructure REIT operates as a real estate investment trust. The Company invests in social infrastructure properties, as well as provides assets and capital management services. Charter Hall Social Infrastructure serves clients in Australia and New Zealand.

Charter Hall Social Infrastructure REIT (CQE AU)

Hotel Property Investments owns a portfolio of properties.  The Company's properties consist of pubs, detached bottle shops and other on-site specialty stores, which are used to generate capital returns for its security holders. Hotel Property Investment's properties are located throughout Queensland and South Australia.

MORI HILLS REIT INVESTMENT CORPORATION is a real estate investment trust (REIT). The Company invests in real estate properties such as commercial and office buildings.

Mori Hills REIT Investment Corporation (3234 JP)

Retail Opportunity Investments Corp. is a fully integrated and self-managed real estate investment trust ("REIT").  The Company specializes in the acquisition, ownership and management of necessity-based community, and neighborhood shopping centers in the western and eastern regions of the United States anchored by national and regional supermarkets and drugstores.

Retail Opportunity Investments Corp. (ROIC US)

SPH REIT is a Singapore-based REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets.

Comforia Residential REIT, Inc. is a real estate investment trust (REIT). The company invests in leasing city apartments mainly in Tokyo area.

MORI TRUST Sogo Reit, Inc. is a real estate investment trust (REIT), which invests in income producing properties.  The Company mainly invests in office buildings in metropolitan area and local cities.

Getty Realty Corporation owns and leases properties in the Northeastern and Middle Atlantic states. These properties, consisting of service stations, convenience stores and petroleum marketing terminals are leased to Getty Petroleum Marketing Inc. Getty Realty Holding is also a marketer of heating oil in Pennsylvania and Maryland.

Activia Properties, Inc. is a real estate investment trust (J-REIT). The company mainly invests in commercial and office buildings in the Tokyo metropolitan area.

DiamondRock Hospitality Company is a self-advised real estate investment trust. The Company owns, acquires, and invests in upper scale and upscale hotel properties located in North America.  DiamondRock also invests in premium limited-service and extended-stay hotel properties in urban locations.

RLJ Lodging Trust is a self-advised and self-administered Maryland real estate investment trust. The Trust invests primarily in premium-branded, focused-service and compact full-service hotels. RLJ Lodging owns hotels in multiple states and the District of Columbia.

Empire State Realty Trust Inc. is a real estate investment trust. The trust owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area.

BWP Trust operates as a real estate investment trust. The Trust invests and manages commercial properties. BWP Trust serves customers in Australia.

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Bwp Trust (BWP AU)

Viva Energy REIT - Time to Fill up the Tank

Viva Energy REIT plans to raise US$682 (A$911m) through its IPO in order to fund its purchase of 425 service stations from its parent Viva...

Sumeet Singh

Challenges Mount for the Wide Moat-Rated Australian Banks

As a consequence of increasing global risks, tougher regulatory demands, intensifying pressure on net interest margins, higher bad debts and lower...

Morningstar, Inc.

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

Launch of Evidente's Long Only Model Portfolio (Australia)

In this post, Evidente launches its benchmark aware, long only model portfolio for Australia for the 2017 financial year. It is designed to be a...

Sam Ferraro

AmpGFX - RBA Cut the Obvious Decision

We think the case is clear for the RBA to cut rates tomorrow and are predicting this outcome. The much lower core inflation reading, evidence of...

Greg Gibbs

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