Who bought the dip? We often hear how retail money often rushes in to buy the dip in scenarios we had earlier this week. Well this time it was different. When the markets crashed on Monday, it was the retail investors who sold whilst institutional investors gradually increased their buying as the carnage rolled on
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The narrative around a “new commodities supercycle” has received a lot of airplay in recent years. Commodities have seen a material rally in prices from their 2020 lows, which only adds fuel to the narrative. It is a worthwhile exercise considering the opposing argument in this narrative – what is the market missing? There have
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It appears global investors are waking up and suddenly realising – who is going to power the artificial intelligence (AI) demand boom? We know the software and chipmaker companies who will benefit from the AI boom, as reflected in their share prices. However, attention has, rightly, also turned to how we are going to provide
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The Australian Federal Government recently handed down the 2024-25 Australian Federal Budget – it was all about a bigger government role and fiscal policy support. The government handed down a second consecutive surplus thanks largely to higher commodity prices and ongoing strength in the labour market. Below we discuss key components of the budget. Big
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Last week we travelled to Hong Kong to attend a global investment conference and conducted several meetings with – Hong Kong listed companies (some of the largest companies with not only exposure to Chinese markets but assets in developed markets), buy side investors, strategists, fund managers and bottom up equity analysts. These trips support our
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Boris Johnson resigned as the U.K. Prime Minister. Japan’s former Prime Minister Shinzo Abe was assassinated. Italy is in political turmoil with Prime Minister Mario Draghi resigning leading to President Sergio Mattarella dissolving parliament. July 2022 was a remarkable month. US Markets were stronger in the month, with the Dow Jones up +6.7% and S&P
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Should investors consider the Lotteries business as an infrastructure asset and if yes what can it be worth? With the demerger of Tabcorp Holdings into two separate entities – The Lottery Corporation (TLC) and New Tabcorp (TAH) [wagering, media and gaming services] – now set to go ahead, we again highlight what the Lottery business
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Given recent developments in the Russia and Ukraine conflict, we thought it may be worthwhile providing clients historical context which may assist in how to think about the current situation. We remind clients that we highlighted in our recent Multi-Asset Quarterly published 2 Feb-22 that first half of CY22 was going to be volatile because
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At the moment there is only one discussion taking place among investors – how many times will the U.S. Federal Reserve raise rates in the current cycle? Rather than try to forecast how many times the U.S. Fed will lift rates, the data and information below provides some historical context as to how equities (using
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US markets were stronger in the month, with the Dow Jones up +5.4% and S&P500 gaining +4.4% to finish 2021 nearly +27% higher, its biggest annual percentage gain since 2019 and its third straight positive year. Sentiment improved as a trio of studies found that the omicron variant led to lower hospitalization risk than the
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Given Woolworths Group (WOW) is a well owned stock, many clients may be asking what to do with the Endeavour Group (EDV) shares. We provide some initial thoughts below. Thoughts upfront – we would suggest investors hold their EDV shares as we conduct further due diligence on EDV. We suspect any re-rating in EDV shares will come more from margin expansion
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A client recently asked about WPL and given it is a well owned stock, we thought our notes below may be worth sending around. Recently, there has been a disconnect between WPL’s share price and broader oil markets (chart below – WPL vs Brent Oil US$/bbl), which is frustrating some investors given it is in portfolios
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We recently had a one-on-one meeting with Mr. Maynard Um (IR Lead) of Tesla Inc (TSLA). The meeting was used as an opportunity to reassess our investment thoughts on the Company and get an update on business operations. During our meeting the official position on the bitcoin investment was one of long-term. However, recent tweets
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We recently had a one-on-one meeting with Mr. Mark Tayler, CFO of Temple & Webster Group (TPW). TPW is a pure play online retailer of furniture, homewares, home décor, arts, gifts and lifestyle products. Given we do not cover the stock, the main purpose of this call was to get an initial understanding of the
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We recently had a one-on-one meeting with Mr. Glenn Gilbert, CEO of Rhythm Biosciences (ASX: RHY). As we do not cover the stock, the main purpose of this call was to get an initial understanding of the Company’s business model as we develop our knowledge on the stock. RHY is a cancer diagnostics technology developer,
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A client asked earlier this week – is the value trade overbought? Our answer was yes but circling back with data/charts to which potentially support the assertion. Whilst we can talk to individual sector level valuations, in this email we provide 30,000 feet view of why the value to growth trade may take a pause
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So everyone is talking about silver right now – intensity and velocity has increased in recent days. Clearly silver is surging on the back of wallstreetbets retail investors looking to repeat their success with GameStop (GME) short squeeze. But to be fair to the fundamental guys, silver started to look interesting in 2020 and started
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We have seen a jump in the headline oil prices and related oil equity prices Brent spot price went above US$48/bbl / WTI spot price touched $46/bbl, especially in Nov-20 on the back of several positive announcements relating to Covid-19 vaccines. With potentially the first batch of vaccines becoming available before the end of CY20,
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The outcome of the U.S. elections remain difficult to predict and will likely be a tight finish. Given all the polls and surveys to date, if one had to pick a result today, it is hard not to back Biden. However, the issue at present is consensus appears to be pricing in a significant Biden
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US markets were weaker in the month, with the Dow Jones down -2.28% and S&P500 down -3.92% amid concern over tighter coronavirus restrictions and cloudy prospects for more economic stimulus. Long-dated US treasury yields were mixed, with the 2-Yr yield steady at 0.13% and 10-Yr yield lower at 0.68%. European markets were lower with the
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Since the reports emerged in the media that Responsible Lending laws relating to the banks are likely to be relaxed, we have spent some time talking to various stakeholders (including the major banks) to better understand the implications. Overall, post our discussions our initial read is that investors and analysts need to curb their enthusiasm.
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I wanted to share a worthwhile article from our colleague arguing for investors to take the lead on climate change through allocation rather than wait for government intervention (who appear paralysed to an extent on this issue). Attached for your convenience and also available on our LinkedIn page. Additionally, I wanted to provide an example
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We recently had a one-on-one meeting with Richard Tegoni (Chairman) at SECOS Group Ltd (SES). Given we do not cover the stock, the main purpose of this call was to get an initial understanding of the Company’s business model as we develop our knowledge on the stock. SES is a developer and manufacturer of sustainable
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BanyanTree Investment Group was recently featured on Ausbiz where Fund Manager Zach Riaz offered his views on the recent market correction and the periphery services that will see increased commercial activity once a COVID-19 vaccine is developed. Here are this thoughts. Vaccine timeline Clearly this will have a material impact on investor sentiment, the health
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US markets were stronger in the month, with the Dow Jones up +7.57% and S&P500 up +7.01%, on back of vaccine progress with Russia giving regulatory approval for the world’s first Covid-19 vaccine for use with mass inoculation to start soon and Pfizer Inc. announcing its Covid-19 vaccine is on track to seeking regulatory review
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US markets were stronger in the month, with the Dow Jones up +1.69% and S&P500 up +1.84%, as investors looked past concerns over a second coronavirus wave and focused on reopening of economies, better-than-expected economic data and potential new stimulus measures. Long-dated US treasury yields were mixed, with the 2-Yr yield higher at 0.15% and
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During our recent meeting with TAH, it was raised with us that investors need to consider Lotteries as an infrastructure asset. Without doubt the highly attractive Lotteries business is currently being overshadowed by the problems in Wagering and Gaming Services (which is now a non-core asset and likely to be divested at earliest opportunity). Post
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Global oil giant BP Plc “now sees the prospect of the COVID-19 pandemic having an enduring impact on the global economy with the potential for weaker demand for energy for a sustained period. The pandemic will accelerate the pace of transition to a lower carbon economy and energy system.” Revised long-term price assumption & impairments.
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The U.S. Fed’s unprecedented market interventions was recently on display. If you are trying to work out why there is such a difference between Main Street and Wall Street, the example below may provide some clues. As of 12 May 2020, the U.S. Fed has started to purchase ETFs as part of its emergency program
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A client put a fair question to us this morning – will bank hybrid distribution payments come under threat as major banks start to reduce or defer dividends? Bank dividends. As most investors by now appreciate, major Australian banks have (or are expected to) either reduce, defer or cut dividends on ordinary shares. National Australia
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“Don’t fight the Fed” as you are being paid to take risks. Your investment thesis on asset classes at this present moment will be to follow the Fed (or central bank) dollar. Moral hazard is too costly it seems, and the latest unprecedented stimulus measures announced by the U.S. Fed in corporate credit markets highlights that the “whatever
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As we have previously written, investors need to keep an eye on company announcements for further clarity on near-term impact from COVID-19 as Feb-20 updates/commentary were largely redundant by the end of February. In this regard, we have been keeping up with the recent ASX company announcements across a diverse range of companies to get
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The question is at what point do equities start looking cheap. We think about markets and opportunities from an portfolio construction perspective. However, we appreciate clients want some context around current market prices so hopefully comments below help. Have equities fallen far enough? Potentially not but they are more closer to the bottom than they were
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Energy markets are grappling with tensions between Russia and Saudi Arabia, with a price war emerging post recent OPEC+Russia meeting. ASX energy sector sold off yesterday as a result. Energy valuation summary (prices as of end of day yesterday OPEC+Russia delivers a nasty surprise. Most investors were holding out on the hope that the recent OPEC+Russia
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No doubt, after many weeks with coronavirus, dubbed “COVID-19”, lingering in the background of U.S and Australian corporate reporting season, investment markets, have reacted strongly over the past week. On public health concerns and uncertainty over the economic impact, we saw a sell-off in equities and yield on “safe-haven” 10-year Treasuries being pushed to record
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Given so many coronavirus experts have appeared since its outbreak, we haven’t felt the need to add to the noise. But we have been closely monitoring the situation through macro data, bottom up company research, discussions with company management teams, with our partners here and offshore. The recent offshore and current ASX reporting season has
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Given the success (and astronomical returns, if you got in early) of tech investing over the past decade, every investor is trying to find the next “unicorn”. In order to understand what the next big tech thing is, we spoke to some of the largest and most active early stage and venture capital firms around
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In the past week, China’s Coronavirus as potentially our next black swan event weighed heavily on financial markets. Whilst it remains too early and difficult to quantify the precise impact, market analysts have estimated that if the problem is prolonged for another month, the financial impact could be, and that is a big ‘could be’,
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Happy new year. We have just published a primer on our Sustainable strategy. But I wanted to give a little more colour to the topic. Some points for consideration: (1) We have of course discussed our approach to Sustainable investing with several clients leading up to this publication and we have incorporated some of these suggestions.
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There is never a dull moment in financial markets. U.S. Phase-One Trade Deal It has been reported U.S. President Donald Trump has signed off on a phase-one deal, which will importantly prevent additional tariffs being introduced on 15 December on approximately $160bn consumer goods. From our perspective, its 13 Dec-19 and something had to be announced
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