China backlash bandwagon rolls over Li Ka-shing 11 Aug 2016 Australia may block an $8 bln power grid sell-off on security grounds, since both bidders had ties to China. But the Hong Kong tycoon is very different from Beijing-owned State Grid. After recent snubs in Britain and Canada, the climate for Chinese investment is souring rapidly.
Australian economy can cope with political turmoil 4 Jul 2016 National elections have failed to give Prime Minister Malcolm Turnbull the decisive support he sought. Fragmented politics make reining in the budget deficit and broadening the tax base even harder. Still, solid economic growth means Australia can weather a bit of uncertainty.
Australia’s rebalancing act can survive politics 23 Jun 2016 Rival parties campaigning for election on July 2 are short on solutions to eliminate the country’s fiscal deficit. But with net debt at just 18 percent of GDP and enviable growth, the next government will have room to manoeuvre. The pivot from mining to services is well underway.
Crown Resorts can shine brighter without Macau 16 Jun 2016 James Packer’s $6 bln casino business may split up. A big rally in its shares looks justified. Not only will the Australian group lift payouts and put hotels into a low-tax trust. The business will also get simpler and no longer be tied to China’s struggling gambling territory.
China’s HNA buys frenemies at Virgin Australia 31 May 2016 The Chinese behemoth may be able to improve its foothold in a key market by buying 13 pct of its peer Down Under. Virgin is a struggling carrier, however, in need of a huge capital injection and it already has three other big airline investors. That caps HNA’s potential returns.
Oilmen fix smart $2.2 bln deal in Papua New Guinea 20 May 2016 Oil Search’s offer to buy InterOil is canny and opportunistic. The buyer will only pay later for future gas discoveries. An agreement to sell a big chunk straight on to France’s Total also cuts the chance of a rival bid. It leaves InterOil investors with an unattractive choice.
Eurovision puts Ukraine in helpful spotlight 16 May 2016 Kiev’s pride in winning Saturday’s annual croon-fest has a downside: it has to pay to host next year’s. Russia has pointed out Ukraine has a ropey economy and a war in the east. The experience of former hosts, though, suggests there could be a return on the investment.
Australian central bank comes to miners’ aid 3 May 2016 Cutting interest rates to an all-time low of 1.75 percent will weaken the currency and help stave off deflation. Reversing the Aussie dollar’s recent rise will help make miners Down Under more competitive. That offsets the risk of further heating up the country’s housing market.
Gas faces a lost decade as customers dry up 23 Mar 2016 Australia’s Woodside has scrapped a costly $30 billion liquid natural gas project after struggling to find customers. A global oversupply and weakening market in Asia meant the project was no longer bankable. It could take a decade before giant LNG projects again make sense.
Rio Tinto new boss can end foolish price war 17 Mar 2016 Outgoing chief Sam Walsh cut costs and investment to leave the miner admirably lean. But he also boosted production, pushing down iron prices in the belief that rivals would go to the wall. They didn’t. His successor has a chance to copy the first strategy and ditch the second.
BHP admits dividend pledges and mining don’t mix 23 Feb 2016 The world’s largest miner slashed its interim dividend 74 pct and followed rival Rio in scrapping a “progressive” policy. About time. Promising payouts will only ever go up is daft in such a cyclical sector. Consistency matters less than safeguarding the balance sheet.
Unusual truce holds water in Aussie ports fracas 23 Feb 2016 Rival bidders Brookfield and Qube are mulling a joint $6.5 bln breakup of Asciano, the rail and container-terminals operator. It’s rare for M&A adversaries to make peace. But an armistice would sidestep competition and funding problems while ensuring no-one is left empty-handed.
Australian infrastructure party is getting crowded 18 Feb 2016 The $6 bln-plus bid battle for port and rail operator Asciano has become heated, drawing in backers from Canada, China and Qatar. No wonder: borrowing is cheap and demand for infrastructure investments outstrips supply. This bodes well for future Australian state sell-offs.
Aussie port and rail battle defies market gravity 28 Jan 2016 Takeover interest has kept Asciano’s stock afloat in falling markets. Now that local rival Qube has formalised its $6.3 bln breakup bid, original suitor Brookfield is under pressure to respond or lose the backing of Asciano’s board. The recent selloff raises the stakes further.
NAB sets suitably low bar for Clydesdale float 18 Jan 2016 The Australian lender will IPO its UK arm for as little as 0.6 times tangible book value, a discount to rivals even after recent price falls. Clydesdale’s restructuring means it may eventually deserve better; its current numbers and buy-to-let exposures suggest it doesn’t yet.
BHP Billiton plays catch-up with $7 bln shale hit 15 Jan 2016 Plunging energy prices forced the miner to write down its U.S. oil and gas assets again. The non-cash charge is large but just brings BHP’s balance sheet closer to the outside world’s estimation. A bigger step would be to follow the market’s lead once more and slash the dividend.
Cheap batteries will give utilities electric shock 28 Dec 2015 Local power suppliers have long enjoyed a natural monopoly. But the arrival of low-cost home energy storage from the likes of Tesla makes consumers less dependent on electricity networks. Batteries may even let some developing countries skip the grid altogether.
Qube edges ahead in Aussie infrastructure fight 26 Nov 2015 Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.
Aussie target Asciano could push for higher bid 10 Nov 2015 The ports and rail group is now fielding competing, $6 bln-plus takeover proposals from Canada’s Brookfield and a break-up consortium led by local interloper Qube. The target’s board may want to see a clearer gulf in value before hitching itself to Qube’s wagon.
No knockout in Australia’s $6 bln waterfront brawl 6 Nov 2015 Canada’s Brookfield moved to salvage its takeover of Asciano, buying a 19 pct stake to match last week’s lightning raid by rival Qube. The Aussie challenger could hit back by making a full bid for the ports and rail group. Or antitrust referees could haul Brookfield away.