Australia

Investment Insights by our experts and thought leaders

Australian Equities Outlook - January 2019

The S&P/ASX 200 Accumulation Index returned -0.1% during December.

Australian Fixed Income Outlook - January 2019

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 1.50% over the month, outperforming Australian equities which fell 0.12%.

Postcards from Hong Kong

I recently attended an investment conference in Hong Kong where I heard from leading corporations within the Asia Pacific region, as well as global thought leaders. Here are a few observations I took away from the event.

All dollars and no sense: Value vs. Growth

In August of this year, our paper Value vs Growth and the Divergence to the Extreme highlighted the fact that value as a style has been significantly out of favour for some time, particularly in Australia over the past year and a half. Three months on, and with heightened volatility in markets, we reflect on that sentiment and provide an update on what’s driving markets and why patience pays off.

From the Australian Equities Desk - November 18

The S&P/ASX 200 Accumulation Index returned -2.2% during November.

From the Australian Fixed Income Desk - November 18

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 0.24% over the month, outperforming Australian equities which fell over 2%.

Australian Housing - Don't Panic

Over the past year Australian house prices have seen 12 consecutive months of decline, the longest streak of persistent falls in over 20 years.

Stop making sense: the state of volatility in markets

Volatility is back in a big way in 2018. A large increase in the VIX is showing an annual level not witnessed since 2007. The sell-off that started in October appears to have been triggered by a number of negative technical forces in the USA coming into effect at the same time, which impacted global markets.

Reporting season through the eyes of a value manager

As a fund manager, reporting season is the most intensive period of the year for stock-specific information and news flow. At this time of year, share price moves are typically more dominated by idiosyncratic factors rather than broader market issues. Given this dynamic, the outcome of reporting season for value stocks was mixed.

North to Alaska - not as frontier as thought

In December 2017, Oil Search announced its entry into the North American oil industry via the acquisition of an interest in the Pikka Oil project, located on the North Slope of Alaska. While the project looked interesting on paper from a valuation point of view, we had the image of frontier territory within the Arctic Circle. However, it was surprising how a brief visit to the region helped put the new asset into context.

The highs and lows of unemployment and wages

The September employment report showed that the Australian unemployment rate has fallen to 5%, its lowest level since 2011. While this is undoubtedly a strong result, two labour market indicators raise questions over whether this will translate into higher wages.

From the Australian Equities Desk - October 18

The S&P/ASX 200 Accumulation Index returned -6.1% during the month.

From the Australian Fixed Income Desk - October 18

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 0.48% over the month, outperforming Australian equities which tumbled over 6%.

ESG Insights : Assessing Stranded Assets in the Electricity Sector

Nikko AM values companies based on their sustainable earnings capacity. Embedded in our research process is a consideration of all relevant risks that impact sustainable earnings and therefore have valuation implications. This obviously includes risk factors that fall within the ESG realm.

From the Australian Equities Desk - September 18

The S&P/ASX 200 Accumulation Index returned -1.8% during the month.

From the Australian Fixed Income Desk - September 18

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was down 0.42% over the month.

From the Australian Fixed Income Desks - August 18

The Australian bond market (as measured by the Bloomberg AusBond Composite 0+ Yr Index) was up 0.81% over the month. The yield curve flattened as the spread between long-term and short-term bond yields narrowed.

From the Australian Equities desk - August 18

The S&P/ASX 200 Accumulation Index rose 1.4% during the month.

A Numbers Game: The Changing Face of Demographics

In 2011 a dramatic shift occurred throughout the developed world — working age populations began a multi-decade decline. Demographic shifts like this in an economy can have profound effects, including changes in growth and debt metrics.

August 2018 Reporting Season: The Good, The Bad, and The Oddly

Confession season was eerily quiet leading into reporting season, unlike the noise from the Royal Commission and the incredible events out of Canberra, where another Prime Minister didn’t reach their full term.

Nikko AM has been certified as carbon neutral for the first time, after entering into a carbon offset programme with the UK-based international organisation Carbon Footprint Ltd.

Read the full press release.