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MARKET OUTLOOK - Technology, Perspectives & General Market Feeling
nipper
post Posted: Aug 16 2020, 01:43 PM
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Is 5G all hype or real investable opportunity?

QUOTE
The impact 5G will have on a wide range of industries is likely to be bigger than we have seen with any previous generation of mobile telecoms. Each previous new generation of network has produced a big jump in speed. And we will certainly see this with 5G, which is estimated to be between 10 and 100 times faster than 4G. But 5G is about much more than quicker phone downloads. It brings lower latency, greater network capacity, and significantly extends battery life. In time, this will produce a robust network in which millions more devices will communicate with one another remotely 10 to100 times faster than at present, and it is what opens the door to 5G full potential: the capacity for machine to machine communication.

What is the timeframe for 5G?

The initial impact will be gradual. Most countries are not yet actively rolling out 5G infrastructure. However, there has been initial build in the US, the UK and other parts of Europe, and much more extended implementation in China, South Korea and Australia. China now has at least partial 5G networks in 50 cities and is accelerating 5G implementation. Part of its unannounced fiscal stimulus as a result of COVID19 could be accelerated spending on 5G infrastructure, and there may also be 5G phone subsidies.
Why is global adoption slow? To some extent, this is an inevitable lag... it took 4G six years to achieve 90% penetration. In the case of 5G rollout, it is partly down to physics: 5G is a high performance network because of its high frequency, but its shorter wavelengths are more readily absorbed by objects, meaning that the 5G signal doesn't travel well through buildings and is even absorbed by plants and rain. In practical terms, it needs more base stations much closer together.

Putting a 5G system in place will take some time. It's not going to be the immediate revolution that some expect.

So what are the opportunities in 5G at the moment? Is it really investable?

Three levels of 5G beneficiaries
A helpful framework for the journey through 5G investment over the next five years is to think of 5G companies in three layers:
5G providers

These are the telecom companies that provide 5G services. While research suggests incremental revenues for telecoms will grow, they are expected to remain relatively small in dollar terms until the middle of the coming decade, when a real acceleration is anticipated, which could in principle be attractive.

But there is a problem: building the infrastructure to access those revenues is going to require massive, upfront capital expenditure, compressing the margins of telecom companies and making them a less than compelling 5G investment.

5G enablers

This second layer comprises the organisations building infrastructure and providing the components necessary to take part in 5G. I believe this is currently a much more attractive area than the providers. The demand for cell towers, network equipment, devices, components and data storage requirements over the next few years could see very significant growth.

Examples of the enablers include tower providers, which supply sites to telecom companies for their infrastructure. The logistics behind providing a vast interconnected network, particularly in cities, is a huge undertaking...

The semiconductor industry is likely to be another beneficiary of 5G. High performance applications such as 5G require even smaller semiconductors. The essential technology required to manufacture these semiconductors is highly specialised... . Device and component makers that produce memory chips, OLED display screens, mobile phones and consumer electronics (or the Internet of Things) are positioned to benefit from the increased connectivity of 5G. Companies like Samsung have been leading the market developing end-to-end 5G offerings.

Data centre providers are also likely to see growing demand from 5G adoption. These data storage centres allow enterprises to take advantage of 5G mobile networks when accessing cloud infrastructure, while improving network and application performance over low latency connections.

5G users These comprise the third level of beneficiary, and this is the area where 5G is potentially a gamechanger because it will enable devices and machines to talk to each other with accuracy and speed. Known as Machine Type Communication (MTC), this technology comes under two main headings.

Massive MTC is where lots of devices exchange large amounts of data but do not necessarily require exceptionally fast response times. Applications could include logistics or smart agriculture. The second category is critical MTC, where not only ultra-reliability is needed but also speed ... think of factory automation, autonomous vehicles and traffic safety.

While some of these themes such as factory automation are already familiar to the market, 5G could accelerate the trend. Similarly, autonomous vehicle development is already making significant headway, but 5G could enable autonomous vehicles to start communicating with one another more effectively, allowing greater safety, efficiency and reducing emissions.

Across industries, 5G is expected to lead to a flood of innovation. In health care, it could allow not just online consultations with doctors but monitoring health conditions and remote surgery. In the energy sector, 5G could enable remote facility inspection or repair, and smart grids.

Virtual and augmented reality, VR and AR,are usually associated with entertainment, but they have massive potential in the maintenance of industrial facilities, where they could improve efficiency through faster repairs.

Where are the possible investable opportunities?
There are a number of listed companies that fall under the 5G enabler category. Importantly, though, they are positioned not just for the growth associated with 5G but for wider secular growth trends around digital disruption. We believe many of these companies represent attractive investment opportunities right now for long-term future growth.
While the real game-changing opportunity could be among the companies that become the ultimate 'users' of 5G, this segment is still in its infancy. That means we must be very careful about how we invest in 5G and for that reason, the concept of a fund overly reliant on 5G has limited appeal. The ability to flexibly invest across different themes and ensure that the investment theme evolves over time, just as the investment opportunity evolves, should be more robust.


Capital Group New Perspective Fund (AU) focuses on investing in companies benefiting from a range of secular trends, and one key theme is digital disruption. This includes companies across industry sectors that are using technology to disrupt their markets, and 5G comes squarely under that heading.


https://www.firstlinks.com.au/article/is-5g-all-hype-or-real-investable-opportunity



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: Pendragon  
 
nipper
post Posted: Jul 24 2020, 03:05 PM
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Technology

QUOTE
The trend we see in the market is clear. Clients want to modernise apps, move more workloads to the cloud and automate IT tasks. They want to infuse AI [artificial intelligence] into their workflows and secure their IT infrastructure to fend off growing cybersecurity threats. As a result, we are seeing an increased opportunity of large transformational projects
Arvind Krishna, CEO, IBM Corp

QUOTE
Acute skills shortages in tech, cyber security, software development, and data analysts for example continue unabated, reinforcing that the need for skills revolution is here in force.
Jonas Prising, CEO, ManpowerGroup Inc [world’s second largest employment firm]



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 29 2020, 05:10 PM
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In Reply To: lgrif's post @ Jun 29 2020, 05:00 PM

yep, and there's another Aussie aspirant, code AML3D Limited (AL3) trying something similar, with a wire arc welding process. It listed on ASX in April this year.
Relativity Space, in the video, looks like it does something similar with plasma arc?
QUOTE
AML3D specialises in providing commercial large-scale metal 3D printing services and solutions to defence, maritime, aerospace and resources customers. Founded in November 2014, AML3D has commercialised its wire arc additive manufacturing technology (under the trademark WAM®), an innovative metal additive manufacturing technology for the cost-effective production of large, high performance metal components and structures.

In conjunction with its WAM® technology, AML3D has developed its own proprietary software, WAMSoft®, which combines metallurgical science and engineering design to fully automate the 3D printing process utilising advanced robotics technology. The WAMSoft® software enables a highly tailored approach to the needs of each client by enabling different pathways and welding operations for different products and materials. AML3D's Adelaide Contract Manufacturing Centre was the first wire arc additive manufacturing facility globally to achieve 'Lloyds Certification'.

- I can not help but think the Yanks will out tech the little guys, every time.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
lgrif
post Posted: Jun 29 2020, 05:00 PM
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In Reply To: nipper's post @ Jun 29 2020, 03:59 PM

Thanks. Titomic also trying to get into this market, but in a smaller way. Maybe this company has beaten it ?

 
nipper
post Posted: Jun 29 2020, 03:59 PM
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3D printing .... like you never saw it before
LA based company Relativity Space https://www.relativityspace.com/ looking to 3D print rockets for space exploration, getting away from conventional mfg, + + thinking about the next step, of 3D printing water tanks and rockets on Mars.

https://www.sharecafe.com.au/2020/06/29/inn...k-2077-reviews/




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: rlane  Pendragon  
 
nipper
post Posted: Jun 22 2020, 02:31 PM
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In Reply To: nipper's post @ Jun 22 2020, 02:16 PM

Four Stocks set to ride the IT boom
QUOTE
1. Megaport
MP1 is perhaps the most recognised. As MP1 is a global player with a market capitalisation of more than $2 billion, it's fair to suggest the market has realised the opportunity here. In recognition of its price performance, the company will be added to the prestigious S&P/ASX 200 list on June 22, affirming its place among the market leaders.

MP1's value proposition is that it can connect its customers to different data hosts, through varied data centres, offering a scalable solution that is multi-cloud connected, and with flexible terms to allow businesses to scale up or down as required. It has been successful in attaining customers and continues to invest heavily in this. Investors need to take a long-term view given it trades at a price to revenue above 30 and is unlikely to be profitable within the next two years.
QUOTE
2. Uniti Group
UWL is involved in the provision of internet and associated telecommunication products focused on infrastructure such as fibre, wireless towers and ground leases. With a leadership team possessing deep experience in the telecommunications space, UWL has a vision of driving connectivity to residents and businesses across Australia.

Recently, the company acquired OptiComm, which itself was a recently-listed entity providing similar services. The acquisition not only gives UWL precious network capacity, but exposure to a range of different clients in areas where the company is yet to establish a presence. Beyond the strategic rationale, the acquisition will contribute immediately to profit growth. Coupled with cost synergy benefits, it enhances UWL's chances of growing market share.
QUOTE
3. 5G Networks
5GN aims to be a vertically-integrated business providing data connectivity, cloud and data centre services to businesses in Australia. Although it is still in the early stages of achieving its end game, early signs are promising. In a recent update, the company confirmed that cash flow generation was strong, contributing to a growing funding capacity. Further, the pipeline of possible future contracts remains strong, boding well for the future.

The company recently raised more than $20 million to expand its fibre network and pursue further merger and acquisition activity so as to boost network capacity and earnings margins.
QUOTE
4. Macquarie Telecom Group
MAQ provides a range of tele, cloud and data centre services to government and business. The business was founded in 1992 with its roots in government. But it is expanding, in particular its data centre business with an aim to have a total power capacity of 50MW.

In a recent presentation to investors, it reaffirmed long-stated earnings guidance, which highlights the resilience of the business model and long-term nature of its larger client base. Its plans for the data centre expansion remain on track. Like competitor NextDC, though, MAQ does not pay a dividend as it continues to invest heavily back into the business with an expected $85 million to $90 million to be spent on capex this year.





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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


nipper
post Posted: Jun 22 2020, 02:16 PM
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Four stocks set to ride the IT boom
https://www.afr.com/wealth/personal-finance...20200619-p5545r

QUOTE
Throughout the COVID-19 crisis, the IT sector has shown incredible resilience, supported by juicy margins, recurring earnings and strong long-term growth opportunities.

Further, companies whose businesses lean heavily on the internet, even those within the most significantly challenged of sectors, have emerged strongly after the shutdown and are poised to become the new benchmark within their respective industries.

However, with our lives moving increasingly online, is our telecommunications infrastructure adequate to meet the demands of future internet thirst?

Although our current needs are met, it would be a far stretch to suggest that our infrastructure is ready for emerging innovations on a broad scale such as driverless cars, mass augmented reality and the artificial intelligence revolution. Unfortunately, the NBN is grossly inadequate and will fail to help us all reap the rewards of technology discoveries yet to come.

Private enterprise has stepped up to fill the imminent void and a new technology infrastructure future is being built by companies, many of which are listed on the sharemarket. Investors will be familiar with household names such as telecommunications services companies Telstra, Optus and TPG. Then there are data centres such as US based Equinix and NextDC.

But the burden of building out the future super highway on which our IT will run is a huge task. Here a number of other companies share responsibility. Although some have already experienced meteoric share price rises, their names will become familiar to investors seeking out themes with a future focus.

1. MegaPort MP1 ..... 2. Uniti Group UWL ..... 3. 5G Networks 5GN ..... 4. Macquarie Telecoms MAQ



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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nipper
post Posted: Jun 10 2020, 12:29 PM
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QUOTE
At the end of April, Australia had 186 ETFs with 205 listings and assets of $US37 billion ($54 billion), according to the latest available data from the London-based research group ETFGI. Funds under management have more than doubled since 2015.

Technology is a big part of that success story because of the strong investor appetite for companies focused on disruption of traditional industries and capable of capital growth many times the rate of growth in GDP.

The BetaShares S&P/ASX All Technology Index ETF had an inauspicious beginning. It began trading in the first week of March amid the first rumblings that there could be a coronavirus shutdown in Australia. The index plunged 34 per cent as investors panicked in the face of uncertainty about how COVID-19 would affect the local and international economies.

Rational assessment
By March 23, the fear and panic had given way to more rational assessments of the medium to long term impact of the virus on technology companies. The smart money in the market realised most of the tech stocks in the index would thrive in the increasingly digitally-connected world created by the global lockdown.

Instead of being victims of the crisis, many companies included in the index were rightly seen to be big beneficiaries of the shift in consumer behaviour. There were many winners from the accelerated adoption of software as a service, increased use of global payment platforms and the added momentum for e-commerce across real estate, finance and healthcare.

Investors were given a lesson in extreme volatility as the tech index soared over the nine weeks to the end of May by 73 per cent.

Tech was definitely the place to be in the month of May judging from the latest analysis of the S&P/ASX 200 and its component indices by Sherifa Issifu, analyst, index investment strategy at S&P Dow Jones Indices.

He says information technology led the way among Australian sectors, gaining 15 per cent in May. The sector now boasts a positive total return for 2020 as well as over the past 12 months, where the tech index has gained 14 per cent compared with a 6.7 per cent decline in the top-200 shares on a total return basis.

The volatility over the past few months has been extraordinary. After experiencing a 46.8 per cent drawdown between its February 17 peak and March 23 low, the tech index is down 8.1 per cent from the peak. In comparison, the S&P/ASX 200 was down 18.8 per cent from its 2020 peak at the end of May.

High dispersion
Those who argue in favour of diversification as a protection against concentration risk will see the merit in owning an ETF rather than one or two high-profile tech stocks.

The high dispersion in performance between index constituents can be seen in the fact that seven of them have gained at least 30 per cent in 2020 led by Pushpay Holdings, up 85 per cent, and Afterpay, up 62 per cent. However, nine index constituents have declined by at least 30 per cent this year.

The S&P/ASX All Technology Index is weighted by float-adjusted market capitalisation, subject to a single constituent weight cap of 25 per cent of the total index weight.

Securities included in the index must, as of the rebalancing reference date, have a minimum three-month average float-adjusted market capitalisation of $120 million.

Also, stocks require a minimum relative liquidity of 30 per cent and if any stock's relative liquidity drops below half of the 30 per cent threshold, it becomes ineligible and is removed at the next rebalancing.

The index will be rebalanced each quarter.
https://www.afr.com/markets/equity-markets/...20200604-p54zel



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Feb 25 2020, 11:43 AM
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Last nights DOW meltdown negated in one swoop all of the gains for 2020.
Now thats a correction.
Mick




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nipper
post Posted: Feb 24 2020, 07:33 PM
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QUOTE
Accounting technology giant Xero will head the Australian Securities Exchange's new technology index unveiled today, giving investors the chance to invest in the fastest-growing segment of the market in one trade.

The ASX will launch the S&P/ASX All Technology Index or the S&P/ASX All Tech for short, at a ceremony at the exchange in Sydney, with technology minister Karen Andrews and executives from each of the WAAAX stocks (Wisetech, Afterpay, Altium, Appen and Xero) there for the ribbon cutting.

The index will go live from Monday morning and will be a smaller, localised version of the US's Nasdaq composite index.

The executive general manager of listings and issuer services at the ASX, Max Cunningham, said returns from investing in tech have exceeded the benchmark S&P/ASX 200 Index in recent years, and this new index would be seen as highly investable.

"There are 20 tech companies with market caps over $1 billion, and the index is a barometer of the general health and performance of that part of the market," he said.
Add Nearmap, and do we have WAAANX?

QUOTE
The number of tech stocks listed on the ASX has doubled from 100 to over 200 in the last five years and the All Tech will have 46 stocks included from Monday morning.

The index does not have a set number of stocks and will be rebalanced quarterly. To qualify, a company must have a market capitalisation of at least $120 million, have a minimum of $120,000 worth of value traded every day, a minimal investable weight factor of 0.3 and a minimum relative liquidity ratio of 30 per cent.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 


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