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…

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.

Event-Driven

<ul><li>Investa Office Fund, or IOF, has received an indicative, conditional and non-binding proposal from Dexus Property Group to acquire all of the outstanding units in IOF.</li><li>Dexus will pay AUD 0.8229 cash and 0.4240 in Dexus securities per IOF unit, implying an offer value of AUD 4.1147 for each IOF unit, representing a 5.2% premium to IOF's pro forma net tangible assets.</li><li>Existing unitholders of IOF will also still be entitled to the full distribution of up to 9.8 cents per unit for the period ending Dec. 31.</li></ul>Analyst: Farina Parsons

Investa Office Fund, or IOF, has received an indicative, conditional and non-binding proposal from Dexus Property Group to acquire all of the outstanding units in IOF.Dexus will pay AUD 0.8229 cash and 0.4240 in Dexus securities per IOF unit, implying an offer value of AUD 4.1147 for each IOF unit, representing a 5.2% premium to IOF's pro forma net tangible assets.Existing unitholders of IOF will also still be entitled to the full distribution of up to 9.8 cents per unit for the period ending Dec. 31.Analyst: Farina Parsons

Investa Office Fund Receives A$4.11 Takeover Offer From Dexus Property Group

Special Situations, Content Strategist, Smartkarma

Crispin Francis

Special Situations, Content Strategist

Smartkarma

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

Research Reinvented

On the 7 December 2015,&nbsp;Investa Office Fund (ASX:IOF) entered into a Scheme of&nbsp;Arrangement&nbsp;with DEXUS Property Group (ASX:DXS) (DEXUS) pursuant to which DEXUS would acquire all of the outstanding units in IOF.<ul><li>The offer is a mixed of scip and cash;&nbsp;0.424 DEXUS securities and AUD 0.8229 in cash for each IOF unit.</li><li>The implied offer of AUD 4.11 comes at a 7.31% premium to IOF's last close (4 December 2015)</li><li>IOF unitholders will be entitled to receive the full distribution for the 6 months ending 31 December 2015, which is expected to be 9.8 cents per IOF.&nbsp;</li><li>Deal Value ~ USD 1.84bn</li><li>No Shop no talk for 2 weeks.</li></ul>In this insight, we take a look at the transaction, valuation and the immediate trade worth setting up.

On the 7 December 2015,&nbsp;Investa Office Fund (ASX:IOF) entered into a Scheme of&nbsp;Arrangement&nbsp;with DEXUS Property Group (ASX:DXS) (DEXUS) pursuant to which DEXUS would acquire all of the outstanding units in IOF.The offer is a mixed of scip and cash;&nbsp;0.424 DEXUS securities and AUD 0.8229 in cash for each IOF unit.The implied offer of AUD 4.11 comes at a 7.31% premium to IOF's last close (4 December 2015)IOF unitholders will be entitled to receive the full distribution for the 6 months ending 31 December 2015, which is expected to be 9.8 cents per IOF.&nbsp;Deal Value ~ USD 1.84bnNo Shop no talk for 2 weeks.In this insight, we take a look at the transaction, valuation and the immediate trade worth setting up.

Australia

Dexus provides real estate services. The Company manages and invests in a portfolio of diversified properties, including office and industrial buildings, retail shopping centers, and car parks. Dexus serves customers in Australia and New Zealand.

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Dexus Property (DXS AU)

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

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

Investa Office Fund Receives A$4.11 Takeover Offer From Dexus Property Group

Investa Office Fund, or IOF, has received an indicative, conditional and non-binding proposal from Dexus Property Group to acquire all of the...

Morningstar, Inc.

Over Excitement? We See a Safe Bet

On the 7 December 2015, Investa Office Fund (ASX:IOF) entered into a Scheme of Arrangement with DEXUS Property Group (ASX:DXS) (DEXUS) pursuant to...

Crispin Francis

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