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MARKET OUTLOOK - Global & Local, Perspectives & General Market Feeling
apache123
post Posted: Jan 10 2006, 08:27 AM
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New Year effect appears to have rubbed off onto Dow Jones...

Dow Jones rose above the 11000 mark earlier today...


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Attached File  _dow1.gif ( 19.62K ) Number of downloads: 7

 




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Buyer beware: Do your own research before investing....
 
apache123
post Posted: Dec 30 2005, 10:26 AM
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yet more new year tips.....

http://www.theage.com.au/news/business/all...ge#contentSwap1

QUOTE
.....So what to buy? We asked six experts to give us their six best stock tips for 2006. Not surprisingly, given the outlook for China and commodity prices generally, their picks were resource heavy. Tolhurst Noall's Freda Miriklis says the outlook for BHP is the best it has ever been.

"We believe the market's attention for 2006 will be on identifying sectors with strong earnings growth, as the backdrop increasingly favours growth over value at this point in the investment cycle," she says.

"Market sentiment will determine the degree of outperformance, with the financials, mining, energy and health-care sectors looking most favourable."

On the resources front, Ms Miriklis says that if you want to add a bit extra to your Christmas stocking, you could take a look at oil group Hardman Resources.

Intersuisse's Peter Russell plumps for four resource companies among his six. "We are very confident that Australian Worldwide will be back on track with its Bass Strait gas project by February," he says.

"Gold is glittering at the moment and Bendigo is very attractive, and will be one of the country's largest and lowest-cost producers by 2011."

He also likes manganese producer Consolidate Minerals because of its fundamentals, while Holst's Mr Heffernan goes for Zinifex because he believes the market for zinc will tighten in 2006.

"There's very little new zinc production coming on stream so it ought to do really well this year," he says.

SpiWatch's Ms Wilcox says Perseverance Corp is an interesting gold play. "We are still bullish on gold through 2006 and this Victorian gold producer has big reserves with some serious upside potential if all goes as management plans."

She believes oil, like gold, will continue to climb, and picks Oil Search to ride that price higher. "Some big risks, big costs, but with very big upside if it all falls into place". She also likes Indian sandalwood producer TFS Corp, which is involved in all stages of plantation growing at a time when sandalwood is becoming more difficult to source.

Macquarie's Mr Sonnemann likes stocks with either strong offshore growth or strong local franchises, while ABN AMRO's Mr Bond believes those with the pricing power will make solid progress in 2006.




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Buyer beware: Do your own research before investing....
 
apache123
post Posted: Dec 30 2005, 09:41 AM
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some new years (blue chip) tips from the broking houses.....

http://www.thecouriermail.news.com.au/comm...55E3122,00.html

QUOTE
Resources shares tipped to shine in strong market
Patrick Lion
30dec05

RESOURCE stocks have been tipped to outperform a bumpier but still strong sharemarket in 2006.

Global demand for commodities and steel are expected to fuel the resource boom but analysts are split on which stocks will hold the best returns.

The face-off between big miners BHP Billiton and Rio Tinto also has them on different sides of the fence.

Wilson HTM tips BHP for its better management personnel and long-term strategy but Macquarie Equities prefers Rio Tinto.

Macquarie did not mind either but Rio won out because of its capacity to pay higher dividends, its ability to control costs and a greater capacity in iron ore.

"BHP are running at full steam now but I don't think Rio has hit that point yet," said David Halliday, a Macquarie associate director.

"But if the China demand story holds up and commodity prices keep moving higher, then the resource sector should be the strongest area on the market."

Mr Halliday said material stocks with international exposure, such as metal recycler Sims Group, would lead the way in that sector thanks to strong global demand for steel.

Ord Minnett was tipping Boral for its strong price earnings growth potential and its ability to capitalise if the construction downturn abated later in the year.

Elsewhere on the market, analysts expect another strong year as the major indices push as high as 5000 points despite increased volatility.

But the problem is finding value stocks in what is considered an expensive market, highlighted, according to Macquarie, by higher P/E (price to earnings) ratios in smaller caps and industrials.

Analysts said investors must be picky and choose stocks that can avoid the danger and ride related economic fundamentals to a higher share price.

ABN Amro Morgans is tipping Suncorp and Tabcorp Holdings as the best value options in their sectors.

Rebecca Sullivan, an analyst at the broking house, said traders should be on the lookout for such opportunities over the holiday season.

"Tabcorp, in our opinion, looks really cheap against the rest of the gaming sector," she said. "Perhaps it's now the gaming bet in that while it might have some issues, it's better priced than its nearest rival in PBL, which also has issues now."

But Wilson HTM private client adviser Joseph Kingsley said the market had not realised the full value of PBL's resort/casino joint venture in Macau.

"We think there's an extra $2.50 on top of the market's valuation (of $2.50)," he said.

Eddy Groves's ABC Learning Centres is attracting praise from several analysts, who expect the Queensland-based childcare group to be a good bet next year as it takes its initial steps into the US market. Solid local growth is also expected.

"They've got all the things you look for in a good growth company – great acquisitions and management," Mr Kingsley said.

Banks are expected to be buoyed by speculation of an end to interest rate rises.

Macquarie tipped NAB to continue its recovery after lagging the other majors this year.

Foster's Group was tipped by Ord Minnett and ABN Amro Morgans, with analysts expecting the wine and beer maker to be in a position to capitalise on a turnaround in the wine industry.

"They do have some very good assets in wine, but we think it's strength is primarily in premium beer and their ability to cut costs," said Ords private client adviser Gerard Paynter.

The recent bullish run in the gold price is expected to hold firm, with Newcrest the best bet due to its attractiveness as a takeover target.

Woolworths is another drawing interest from several analysts such as Mr Paynter after its Foodland acquisition, despite poor retail conditions this year.




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Buyer beware: Do your own research before investing....
 
apache123
post Posted: Dec 21 2005, 07:44 AM
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http://www.thecouriermail.news.com.au/comm...255E462,00.html

QUOTE
Australians aim to cut debt
By Nicki Bourlioufas
20dec05

FOR people with excess cash to invest, paying off a home loan is a priority, while buying another property does not rank highly, according to a poll of NEWS.com.au readers.

The survey of 2168 people found paying off the home loan featured as the first priority for 55 per cent of respondents.

The next closest category was direct investment in Australian shares at 11 per cent.

But reflecting caution about property, only 8 per cent would invest spare cash in direct property.

Just 7 per cent of NEWS.com.au readers would salary sacrifice, which financial planners consider one of the most tax-effective investments. Another 6 per cent would put funds into managed funds.

The survey of readers was conducted by polling firm Coredata and NEWS.com.au on December 1 to 4.

Australians have racked up huge debts in buying properties during the recent boom. Since 1996, bank lending to households has grown at an average rate of 13 per cent per year, and housing loans now account for more than half of banks' loans, according to the Reserve Bank of Australia.

The rapid expansion of household credit - reflecting lower and more stable interest rates - has helped boost house prices, with prices more than doubling between 1996 and the end of 2003.

However, house prices at the national level have stabilised in growth in recent times after increasing by almost 20 per cent in 2003.

And a fear of higher interest rates is driving people to reduce debt. Growth in household credit has slowed, as turnover in the housing market has declined and households have taken a more cautious approach to their finances.

The survey of NEWS.com.au readers found almost four out of five Australians believed houses were overvalued and many people expect property prices to fall.

Given the housing downturn, a large number of people (44 per cent) expected property prices to fall over the next quarter. Only 18 per cent of respondents expected house prices to improve and 37 per cent who expected no change.




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Buyer beware: Do your own research before investing....
 
apache123
post Posted: Dec 12 2005, 08:02 AM
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http://www.theaustralian.news.com.au/commo...255E643,00.html

QUOTE
Minerals boom to slow up
David Uren, Economics correspondent
December 12, 2005

THE economy will enjoy another year of record resource prices, but the election year of 2007 could see commodity markets thrown into reverse.

A Treasury Department review of the resources industry says the demand from China and India for minerals, which has driven massive price increases for Australian iron ore and coal, is likely to keep growing for decades.

However, it says the mining industry is responding to growing demand with a large expansion in its capacity.

"As more productive capacity comes into operation around the world, commodity prices will slow or fall back somewhat," the paper says.

The Treasury analysis of the industry follows comments last week by Peter Costello that it would be dangerous to become complacent about the high minerals prices.

"The minerals boom will not last forever and we cannot factor in these sorts of prices forever," the Treasurer said.

Mr Costello said Treasury was examining the effect a fall in minerals prices would have on the budget.

The Treasury study says the industrialisation of India and China does not mean there is a "super-cycle" in which minerals prices will head steadily upwards for years.

But it rejects the idea the boom is an aberration in a long-term slide in minerals prices.

Over the past century, there has been no clear trend in coal prices. Over the past 40 years, in fact, minerals prices have risen relative to the cost of manufactured goods.

Treasury says minerals prices bounce about much more violently than world economic growth. A small economic slowdown sends prices plummeting.

"This reflects the fact that mining companies attempt to increase production when prices rise, but due to the large fixed costs and capital intensive nature of modern mining technology, new production may lag the initial investment decision by a number of years," it says.

"As a result, prices run up more than desired and are followed by periods of weakening as global supply expands."

World steel production, which reflects the pace of industrialisation, has been growing at an average rate of about 6 per cent a year over the past five years, compared with long-term average growth of less than 2per cent.




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Buyer beware: Do your own research before investing....
 
happy2
post Posted: Dec 8 2005, 01:33 PM
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Wavestrength Newsletter editor Adam Lass commenting on the US 7/12.05

So maybe it was the word that the much-argued housing bubble pop isn’t a maybe but a definite proposition for 2006, and will cost the U.S. some 800,000 jobs?

As per the reasonably-trusted Anderson Forecast: “The slowdown is likely to last several years, with as many as 500,000 construction jobs and 300,000 financial sector positions lost.”

Wow, that would sure cause me to stand up and notice.

“In some regions, homes are remaining unsold longer and the pace of housing construction is outpacing population growth, which could spell a decline in demand. On all these grounds, we believe housing is due for a sustained decline. The remaining questions are how hard the fall will be and when it will begin.” – Anderson Forecast economist Michael Bazdarich

The report went on to point out that “Eight of the last 10 economic recessions were started by housing market slowdowns.”

I wonder how investors felt about that?

Finally, there was John Challenger’s contribution to today’s sour mood.

Regular readers know by now that I trust employment placement specialists Challenger, Gray & Christmas’ private report re: the jobs picture far more then the fuzzy math we get from Washington.

Well today, John and his crew informed us that while the Bureau of Labor Statistics may be painting a picture of the best of all possible job markets, they see are seeing the highest planned U.S. layoffs figures since July: “So far this year, U.S. employers have announced 964,232 job cuts, 3.6 percent more than the 930,690 cuts announced through November 2004. Also, U.S. firms announced plans to hire 96,282 in November, bringing hiring for the year to 257,804.”





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Have a good one

Happy 2





"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.
 

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apache123
post Posted: Dec 8 2005, 11:27 AM
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Sorry, only included part of Jim Rogers interview....

http://www.resourceinvestor.com/pebble.asp?relid=15218

QUOTE
Can Gold Reach $900?

By Lindsay Williams
07 Dec 2005 at 11:14 AM EST

JOHANNESBURG (Business Day) -- Classic Business Day gets multi-billionaire Jim Rogers, former partner of George Soros in the legendary Quantum Fund, on the line about the performance of commodities in 2005, and the outlook for 2006.

....LINDSAY WILLIAMS: What do you think about the implications for the other asset class - that being equities. We’re seeing the Dow Jones getting very close to 11,000 and everyone getting very enthusiastic. Ben Bernanke is coming in to take over the chairmanship of the U.S. Federal Reserve - what are your predictions for the financial markets?

JIM ROGERS: I’m not optimistic about the U.S. stock market in 2006. The economy will slow down, the market will slow down - the market has been flat for a couple of years now basically, and Ben Bernanke will be a disaster for the Federal Reserve. His solution to everything is to print money - so I’m not optimistic about the dollar, the stock market, the economy in the U.S. next year....




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Buyer beware: Do your own research before investing....
 
Smartman_plc
post Posted: Nov 30 2005, 05:29 PM
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From an OZEQUITIES newsletter that my broker sent to me today.
QUOTE
DR METZ: US EQUITIES RALLY TO CONTINUE INTO NEXT YEAR, GOLD IN EXPLOSIVE MULTI YEAR BULL MARKET, JAPANESE MARKET RISING
By Jenny Prabhu

Dr Michael Metz, Chief Market Strategist at Oppenheimer’s in New York told OzEquities today he believes the US market will continue higher early next year, at least into early spring while gold is in an explosive multi year bull market.

Dr Metz said over the next few weeks at least if the hedge funds are to make significant earnings the US equities market is likely to trade the high end of the range. After early spring he expects a trading market but no great disaster next year.

On the strength in the US dollar, Dr Metz said while the recent strength has surprised him, and a significant amount of the strength is due to the repatriation of money back into the US, there is also a lot of scepticism about the Euro, with people preferring to hold the US currency.
Dr Metz said, “My feeling is interest rates (in the US) may very well peak in the next month or two. The Fed has done its job and broken the back of the housing market. My guess is rates will be coming down. The economic outlook is not terribly bright, the consumer will have problems maintaining spending and the end of the consumption boom (is near).”

However, the US equities market is being driven by enormous liquidity and stocks are relatively cheap against other US asset classes. There is a huge amount of merger activity – at something like a two trillion dollar annual rate, Dr Metz said.
The OPEC countries are looking to acquire assets in North America, and the Chinese, if possible are also buyers of North American assets.

Gold is in an explosive bull market
Dr Metz said a great historical shift of wealth is occurring from the west to the OPEC and developing nations. These countries are culturally attuned to holding gold.
Meanwhile, the central banks will stop selling gold, while some central banks are buying.
The strategist said this will lead to an explosively positive demand situation for gold for the next few years, basically driven by this transference of wealth.

China growth expected to continue
Dr Metz said while the questionmark has been whether China’s growth will fall as the US consumer’s spending moderates he believes China’s growth may slow somewhat but will continue, driven by its international trade including intercountry trade in Asia as well as by rising domestic consumption.

Japanese market will be the great bull market of this decade
Dr Metz said the Japanese market still has a long way to go. “The great bull markets  of this decade will be led by the Japanese”, the strategist said.




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Cheers,
Smartman
 
happy2
post Posted: Nov 30 2005, 08:30 AM
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In reply to: apache123 on Wednesday 30/11/05 09:05am

apache,

We have had some rises in interest and these took the wind out of the sails of the housing market rises. As a result house prices have come back a bit. But not in all areas. Certain suburbs will always outperform most other areas.

The bottom line is always how much borrowing capacity people have and how much banks can affort to lend.

Right now, we would have to be around 6 oclock in the housing market, at least for Eastern Australia.





--------------------
Have a good one

Happy 2





"Knowledge is a process of piling up facts; wisdom lies in their simplification".

Caveat Emptor: the above comments are merely opinion, not advice.
 
apache123
post Posted: Nov 30 2005, 08:05 AM
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Posts: 5,297
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http://www.theaustralian.news.com.au/commo...5E31037,00.html

QUOTE
Australian property 'over-valued'
By Shane Wright
November 29, 2005

AUSTRALIA has beaten the world in over-valuing its homes – and property owners should prepare for price falls until late next year.

A special Organisation for Economic Cooperation and Development (OECD) report into housing markets in the world's richest nations has found Australia is the most over-valued property market.

The report was prompted by sharp spikes in property prices in developed nations in recent years.

The OECD found the estimated over-valuation of Australian homes in 2004 was 51.8 per cent. The next highest over-valuation was in Britain at 32.8 per cent.

That over-valuation was coupled with the second highest mortgage rates in the developed world, at an average of 7.1 per cent – only eclipsed by New Zealand where they were eight per cent.

There have been plenty of signs of the slowing property and housing market since prices peaked early last year.

But the OECD believes prices are likely to fall for some time.

Since 1970, Australia has had six upturns in the property market – the highest number of the developed world. Those upturns have averaged 14.3 quarters, or about 43 months.

During those upturns, average prices have increased 31.6 per cent.

But between the first quarter of 1996 and the first quarter of 2004 Australian real house prices climbed 84.7 per cent.

Downturns in the Australian house market have averaged around 10 quarters, or 30 months, with an average price fall of 10.1 per cent.

The current downturn started in Sydney and Melbourne early last year, which means on the OECD's figures, prices are likely to fall – or not rise – until the fourth quarter of 2006.

The OECD said the strong growth in house prices in developed nations was unprecedented, partly because of how it has not mirrored the global economy.

"The current house price boom is strikingly out of step with the business cycle," it found.

The OECD pins down several factors for the way people had bid up the price of houses across the developed world.

It suggests a lack of housing stock, higher migration levels, low interest rates and more competition from lenders have all contributed to the strong rises in prices.

"A combination of generalised low interest rates across OECD economies, coupled with the development of new and innovative financial products, have no doubt played an important role," it said.

"In Australia, increased competition among credit providers has contributed to the doubling of the number of products provided by lenders."

Another factor with special importance to Australia is the growth in people investing in property specifically to rent.

Buy-to-let mortgages, as they are called internationally, have grown in most nations. Around seven per cent of loans in Britain are for investment, while in the US 15 per cent of home sales last year were for investment.

But in Australia, around 30 per cent of mortgages (by late 2003) were for investment. In NSW the rate was 42 per cent of all mortgages, and in Victoria it was 35 per cent.

The OECD said even a small rise in interest rates could prove problematic for the housing sector.

"If house prices were to adjust downward, possibly in response to an increase in interest rates or for other reasons, the historical record suggests that the drops might be large and the process could be protracted," it found.


Where does this place property on the Investment Clock?



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Buyer beware: Do your own research before investing....
 
 


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