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.

Macroeconomics

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.

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.

Thematic (Sector/Industry)

<ul><li>In the past week, two bottom up developments have dominated the financial market news flow in Australia: the belated announcement of CEO succession at Woolworths and renewed concerns that Australian banks represent a 'big short' thanks to rumours of the imminent collapse of residential house prices. </li><li>The losses announced by Woolworths in its home improvement division this week and decision to exit the business altogether serves as a timely and powerful signal to other companies about the dangers associated with investing for growth in the current environment of deficient demand.  Corporate Australia has already taken heed, with the economy on the precipice of a capex cliff.  The recently released ABS survey of capex intentions points to a 20% slide in business investment in the current financial year, which would represent the largest annual decline in over 25 years.</li><li>Any bubble talk around housing discounts the important role that dwelling investment and household consumption still has to play to support the outlook while the economy is on the precipice of a capex cliff.  Against the backdrop that interest rates will remain low for an extended period (and likely move lower from here), if there is a bubble in Australian housing it might well persist.  To take a cue from John Maynard Keynes, hedge funds seeking to capitalise on Australia's 'big short' will probably need an abundance of patience (and capital).</li></ul>

In the past week, two bottom up developments have dominated the financial market news flow in Australia: the belated announcement of CEO succession at Woolworths and renewed concerns that Australian banks represent a 'big short' thanks to rumours of the imminent collapse of residential house prices. The losses announced by Woolworths in its home improvement division this week and decision to exit the business altogether serves as a timely and powerful signal to other companies about the dangers associated with investing for growth in the current environment of deficient demand.  Corporate Australia has already taken heed, with the economy on the precipice of a capex cliff.  The recently released ABS survey of capex intentions points to a 20% slide in business investment in the current financial year, which would represent the largest annual decline in over 25 years.Any bubble talk around housing discounts the important role that dwelling investment and household consumption still has to play to support the outlook while the economy is on the precipice of a capex cliff.  Against the backdrop that interest rates will remain low for an extended period (and likely move lower from here), if there is a bubble in Australian housing it might well persist.  To take a cue from John Maynard Keynes, hedge funds seeking to capitalise on Australia's 'big short' will probably need an abundance of patience (and capital).

What the Capex Cliff Means for Australia's 'Big Short'

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

Equity Bottom-Up

Platinum Asset Management / Equity Bottom-Up

<ul><li class="p1">Platinum Asset Management is a successful&nbsp;Australian fund manager specialising in international&nbsp;equities.</li><li class="p1">An impressive long-term track record brought rapid&nbsp;growth in funds under management in the last bull market,&nbsp;ending in late 2007.</li><li class="p1">Managing director and founder Kerr&nbsp;Neilson retains a 53% stake.</li><li class="p1">Platinum Asset Management is one of the most&nbsp;recognisable brands in the Australian wealth space.&nbsp;Growing superannuation balances will expand demand&nbsp;for global exposure and we consider Platinum is one of&nbsp;the few that are well placed to serve growing retail&nbsp;investor demand.</li><li class="p1">Operating leverage is high, capital demands are low and&nbsp;free cash flow generation is strong. This supports a high&nbsp;dividend payout ratio and offers investors the best of&nbsp;both growth and income returns.</li><li class="p1">Over the long term, the outlook remains positive, with&nbsp;much of the government-mandated growth in retail&nbsp;superannuation providing tailwinds.</li></ul>Analysts: Nathan Zaia &amp; David Ellis

Platinum Asset Management is a successful&nbsp;Australian fund manager specialising in international&nbsp;equities.An impressive long-term track record brought rapid&nbsp;growth in funds under management in the last bull market,&nbsp;ending in late 2007.Managing director and founder Kerr&nbsp;Neilson retains a 53% stake.Platinum Asset Management is one of the most&nbsp;recognisable brands in the Australian wealth space.&nbsp;Growing superannuation balances will expand demand&nbsp;for global exposure and we consider Platinum is one of&nbsp;the few that are well placed to serve growing retail&nbsp;investor demand.Operating leverage is high, capital demands are low and&nbsp;free cash flow generation is strong. This supports a high&nbsp;dividend payout ratio and offers investors the best of&nbsp;both growth and income returns.Over the long term, the outlook remains positive, with&nbsp;much of the government-mandated growth in retail&nbsp;superannuation providing tailwinds.Analysts: Nathan Zaia &amp; David Ellis

Respected and Highly Regarded Australian Asset Manager

<ul><li>We continue to believe Perpetual Limited's strong brand, good long-term investment track record and sticky retail funds under management, or FUM, underpin its narrow moat rating, but recent performance of key funds raises concern.</li><li>We believe performance of the core Australian equity funds, the change in portfolio manager of the Australian Share Fund in February, as well as increased volatility in equity markets, will hurt short-term earnings.</li><li>In an environment where investors are increasingly questioning the value-add of active managers as they look to lower investment management costs, underperformance can deter flow for years.</li></ul>Analysts: Nathan Zaia and David EllisFull report below the fold....

We continue to believe Perpetual Limited's strong brand, good long-term investment track record and sticky retail funds under management, or FUM, underpin its narrow moat rating, but recent performance of key funds raises concern.We believe performance of the core Australian equity funds, the change in portfolio manager of the Australian Share Fund in February, as well as increased volatility in equity markets, will hurt short-term earnings.In an environment where investors are increasingly questioning the value-add of active managers as they look to lower investment management costs, underperformance can deter flow for years.Analysts: Nathan Zaia and David EllisFull report below the fold....

Poor Returns and Portfolio Manager Change Lead to Lower Fair Value and High Uncertainty on Perpetual

<ul><li>The key company announcement during the week in Australia came from Woodside Petroleum, that it had provided Oil Search a confidential, all scrip, non-binding proposal to merge.&nbsp;</li><li>I recommend that investors avoid Woodside for four reasons: Mergers &amp; Acquisitions 101 says that acquirers that make all scrip bids typically perform poorly, it is not clear that Woodside can extract synergies from managing Oil Search's assets, integration of the target's assets will further lift Woodside's complexity and agency costs, and analysts continue to downgrade the stock's future growth prospects.</li><li>The sharp drop in consumer sentiment highlights that the elevated level of financial market volatility in recent months has adversely affected the psychology of the household sector.&nbsp; Nonetheless, a number of macro tailwinds are expected to support the outlook for discretionary retail spending.</li></ul>

The key company announcement during the week in Australia came from Woodside Petroleum, that it had provided Oil Search a confidential, all scrip, non-binding proposal to merge.&nbsp;I recommend that investors avoid Woodside for four reasons: Mergers &amp; Acquisitions 101 says that acquirers that make all scrip bids typically perform poorly, it is not clear that Woodside can extract synergies from managing Oil Search's assets, integration of the target's assets will further lift Woodside's complexity and agency costs, and analysts continue to downgrade the stock's future growth prospects.The sharp drop in consumer sentiment highlights that the elevated level of financial market volatility in recent months has adversely affected the psychology of the household sector.&nbsp; Nonetheless, a number of macro tailwinds are expected to support the outlook for discretionary retail spending.

Australia

Perpetual Limited is a financial services company that has two primary activities, wealth management services and corporate trust services. The Company provides funds management, responsible entity services, trustee services, executor services, financial planning, investment administration, superannuation, custody and registry services.

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Perpetual Ltd (PPT AU)

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

What the Capex Cliff Means for Australia's 'Big Short'

In the past week, two bottom up developments have dominated the financial market news flow in Australia: the belated announcement of CEO...

Sam Ferraro

Respected and Highly Regarded Australian Asset Manager

Platinum Asset Management is a successful Australian fund manager specialising in international equities. An impressive long-term track record...

Morningstar, Inc.

Poor Returns and Portfolio Manager Change Lead to Lower Fair Value and High Uncertainty on Perpetual

We continue to believe Perpetual Limited's strong brand, good long-term investment track record and sticky retail funds under management, or FUM,...

Morningstar, Inc.

Weekly Impressions

The key company announcement during the week in Australia came from Woodside Petroleum, that it had provided Oil Search a confidential, all scrip,...

Sam Ferraro

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