Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Chiyoda, Shin Etsu Chemical, GLOW, HNA, Hyosung, Wheelock

Credit Analyst, BondAdviser

Jack Pobjoy

Credit Analyst

Australian bonds & fixed income research

BondAdviser

BondAdviser is the central reference point for intelligent information on Australian fixed income markets. We help you make informed decisions by providing unbiased research, transparent pricing data, analytics, portfolio tools and education.

BondAdviser has the broadest coverage of retail-accessible ASX-listed and over-the-counter Australian bonds and fixed income securities. We make it easy for you to review and compare investments before you place an order with your broker or dealer.

Credit

Australian reporting season today (15 Aug 2018) saw <a href="https://www.smartkarma.com/entities/712" target="_blank">Insurance Australia (IAG AU)</a>, <a href="https://www.smartkarma.com/entities/1771" target="_blank">Villa World Ltd (VLW AU)</a> and <a href="https://www.smartkarma.com/entities/1104" target="_blank">Wesfarmers Ltd (WES AU)</a> report full year results (FY18). The latter was arguably the most intriguing for investors but unfortunately little was revealed by management beyond what had already previously been announced including the Coles demerger, the conglomerate's exit from commodities, its failed attempt at UK Bunnings and more recently, the sale of Kmart Tyre &amp; Auto business. On the…

Australian reporting season today (15 Aug 2018) saw Insurance Australia (IAG AU), Villa World Ltd (VLW AU) and Wesfarmers Ltd (WES AU) report full year results (FY18). The latter was arguably the most intriguing for investors but unfortunately little was revealed by management beyond what had already previously been announced including the Coles demerger, the conglomerate's exit from commodities, its failed attempt at UK Bunnings and more recently, the sale of Kmart Tyre &amp; Auto business. On the…

Australian Reporting Season: Insurance Australia Group, Villa World & Wesfarmers

Director - Research, Consulting and Advisory, BondAdviser

Nicholas Yaxley

Director - Research, Consulting and Advisory

On the 20th of June 2017, Peet Limited (ASX Code: PPC) announced a new issue, Peet Bonds 2 (Prospective ASX Code: PPCHB). This is Peet’s second series of bonds under the prospectus and is expected to be issued on the 5th of July 2017. The offer size is guided to be $50 million with Peet retaining the ability to raise more or less. The proceeds from the transaction will be used to reduce bank debt, strengthen the group’s balance sheet and create flexibility to support its growth objectives.The bonds are structured as simple corporate bonds meaning they have no optionality for the issuer to call the notes prior to maturity and interest payments are mandatory. To qualify as a simple corporate bond this security has met specific legal eligibility requirements on the issuer and the security. The bonds are protected by event of default conditions which give the holder the right to recover any unpaid principal or interest subject to issuer solvency. The simple corporate bond regime does not allow noteholders to be subordinated to unsecured creditors. The notes are guaranteed by a number of Peet subsidiaries.Interest will be paid on a quarterly basis based on a calculation equal to 90-Day BBSW plus an interest margin guided to be in the range of 4.65 – 4.75% p.a. set through the bookbuild. The bond may only be redeemed by the issuer on its legal final maturity date (5 October 2022) or when a Tax Event, Change of Control Event or a Clean Up Condition exists.

On the 20th of June 2017, Peet Limited (ASX Code: PPC) announced a new issue, Peet Bonds 2 (Prospective ASX Code: PPCHB). This is Peet’s second series of bonds under the prospectus and is expected to be issued on the 5th of July 2017. The offer size is guided to be $50 million with Peet retaining the ability to raise more or less. The proceeds from the transaction will be used to reduce bank debt, strengthen the group’s balance sheet and create flexibility to support its growth objectives.The bonds are structured as simple corporate bonds meaning they have no optionality for the issuer to call the notes prior to maturity and interest payments are mandatory. To qualify as a simple corporate bond this security has met specific legal eligibility requirements on the issuer and the security. The bonds are protected by event of default conditions which give the holder the right to recover any unpaid principal or interest subject to issuer solvency. The simple corporate bond regime does not allow noteholders to be subordinated to unsecured creditors. The notes are guaranteed by a number of Peet subsidiaries.Interest will be paid on a quarterly basis based on a calculation equal to 90-Day BBSW plus an interest margin guided to be in the range of 4.65 – 4.75% p.a. set through the bookbuild. The bond may only be redeemed by the issuer on its legal final maturity date (5 October 2022) or when a Tax Event, Change of Control Event or a Clean Up Condition exists.

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

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

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

Villa World Ltd. is a fully integrated property investment and development group, The Company offers complete, ready to live in homes in Queensland, New South Wales and Victoria.

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Villa World Ltd (VLW AU)

Last Week in Event SPACE: Chiyoda, Shin Etsu Chemical, GLOW, HNA, Hyosung, Wheelock

Last Week in Event SPACE ... One interpretation on how Chiyoda Corp (6366 JP) may source additional loans and equity. Shin Etsu Chemical (4063...

David Blennerhassett

Australian Reporting Season: Insurance Australia Group, Villa World & Wesfarmers

Australian reporting season today (15 Aug 2018) saw Insurance Australia (IAG AU), Villa World Ltd (VLW AU) and Wesfarmers Ltd (WES AU) report full...

BondAdviser

New Issue: Peet Bonds 2

On the 20th of June 2017, Peet Limited (ASX Code: PPC) announced a new issue, Peet Bonds 2 (Prospective ASX Code: PPCHB). This is Peet’s second...

BondAdviser

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.

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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