Will the US dollar recovery continue through 2010?

Will a second wave of US mortgage defaults cause a repeat of the sub-prime crisis?

Will direct government investment begin to unwind and will the “too big to fail” companies be allowed to exist?

Dubai unnerved investors – are more shocks in the pipeline?

Where are the Property Markets heading?

How will china fare in 2010 ?

The climb back for Mount gibson

It was the day that Mt Gibson Iron announced many of its customers had requested delays for shipments of iron ore. And it lead – or at least was the first real sign – of a broader market crash among mining stocks, with Rio Tinto soon forced to follow suit and admit it was also having problems selling ore.

But a year on – and after the injection of Chinese capital at the depths of the market – business has improved substantially for Mt Gibson.

In a presentation to a Macquarie Equities conference, the West Australian iron ore miner said it had taken some lessons away from last year’s market crash that would prove useful for all smaller iron ore miners. Among the lessons learned are that the quality of customers is more important than the quantity. Mt Gibson had been particularly vulnerable last year  because most of its sales were made to iron ore traders rather than actual steel mills.

Mount gibson has plans to grow organically and through mergers and acquisitions after selling 5.4 million tonnes of iron ore last year, which led to earnings of $43 million.

TODAYS MGX  PRICE: MGX 1.200 -3.23%

Company Name:
Mount Gibson Iron Limited

Stock Code:
MGX

Website:

www.mtgibsoniron.com.au

Market Cap ($M):
1,446

Equiv. Shares (M):
1,075

Some news history on Mount Gibson Iron Ore:

Mount Gibson shareholders approve Chinese rescue plan

Wednesday, 31 Dec 2008

Shareholders in Mount Gibson Iron Ltd have voted in favor of a AUD 162.5 million rescue package that could result in the ailing iron ore miner being more than 40% held by two associated Chinese interests.
The company gained approval at a general meeting in Perth on Tuesday to conduct a rights issue to its largest shareholder, Chinese resources investment house APAC, and a separate placement to Hong Kong Stock Exchange listed Shougang Concord.

—————————————————————–

Sydney, Sep 24, 2009 (ABN Newswire) – Mount Gibson Iron Limited (ASX:MGX) has entered into two agreements with Fushan International Energy Group (HKG:0639), Shougang Concord International Enterprises Company Limited (HKG:0697), Shougang Holding (Hong Kong) Limited and various subsidiaries of those companies.
Under the first agreement, Chinese coal producer Fushan has agreed to purchase from Shougang Concord all of its shares in Mount Gibson in return for the issue of shares in Fushan valued at HK$1.188 billion.

—————————————————————-

LINKS:
Mount Gibson Official website :http://www.mtgibsoniron.com.au/

[PDF]

MOUNT GIBSON FOSSICKING AREA

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At present, you can send applications for a mortgage online or over the Internet. Applying for a home mortgage loan had never been so easy. You only need to be ready to complete the online mortgage application. Following are some useful steps to apply for a mortgage online.

• Gather all the details. You would require your employment record and residential record. You would also require the income tax statements of the past year, your bank statements and a paycheck stub.
• Make a list of all your assets like boats, cars and IRAs (Individual Retirement Accounts). Collateral might help you determine if you are eligible for a loan.
• Understand what is stated on your credit report. If there are any queries regarding your credit report, you would understand what to speak when questioned.
• Work out your payments and expenditures in order to ensure that the mortgage lender can help you determine what type of payments you’re able to afford.
• Study the prevailing interest rates to have an overview of what rate you might get for your particular financial condition.
• Determine what kind of mortgage you would like to take out, for example a 15-year fixed, 30-year fixed, 30-year fixed interest only and so on. Make a decision whether you wish to buy a house or refinance.
• Search for a mortgage lender online. You must be cautious while furnishing your personal financial details. Go for the one you think you’re convenient with.
• Get a few online mortgage applications and have the printouts. In this manner, you can complete them and be at ease with the application procedure prior to putting it forward over the Internet.
• Call up the number of customer service. Make queries till you comprehensively realize everything. If you don’t get a comprehensive idea, you must not sign on the documents. Go through the fine print carefully. Jot down your queries prior to calling them up.
• Complete the online mortgage application and submit that. If you’re refused for a loan, then try to ascertain why it happened. Take the help of a consumer credit counselor to solve any problem prior to submitting your application once more.

The Australian share market’s rise to a fresh 10-month high on Monday was erased by a fall in Asian share markets, leaving traders wary of profit taking after sharp gains in the Australian market since March.

Banks sustained their gains on the back of a positive trading update from Australia and New Zealand Banking Group, while resources succumbed to falls in Chinese and Japanese equity markets.

The benchmark S&P/ASX 200 closed down 10.5 points or 0.2% at 4479.1 after hitting 4537.2 in early trading.

The index was up 43% from its March low and 21% above its July low, thanks to signs of global economic recovery and a better-than-expected Australian earnings period.

It rose 5.5% in August, notching up its sixth-consecutive monthly gain.

Australian economy shines

The Australian economy may be faring better than most, but the global economic crisis is hitting profits and wages hard

The slump in profits and wages is sizeable. Company profits fell by 7.8 per cent in the three months to June, Mark, to be almost 15 per cent lower than a year ago and wages fell by 1.1 per cent, they’ve fallen now for the past six months wages and it’s very unusual for wages to actually be going backwards.
It was a tale of different sectors however; you had a big fall in mining profits with the cuts to commodity prices, you had slight falls in profits in wholesale trade and construction as margins got squeezed, but in the retail sector, profits were up nearly nine per cent in the quarter and up more than 20 per cent on a year ago, so the retail sector, thanks to the government stimulus has had a boom.

27/07/2009 

Alan Kohler Australia’s top business and finance commentator is starting a weekly column for ninemsn Money.

Starting Wednesday August 5, Alan will file weekly for Money giving his expert take on the markets, the economy and business.

About Alan Kohler

One of Australia’s most experienced commentators and journalists. Former editor of the Australian Financial Review and The Age, former business and economics editor of the 7.30 Report, former Chanticleer columnist for the Australian Financial Review and a former columnist for The Age and theSydney Morning Herald. In addition to Eureka Report and its sister publication Business Spectator, Alan is also the finance presenter on ABC News and host of Inside Business on ABC TV each Sunday

Join Alan every week on Money and make his insight part of your knowledge portfolio.

 On 28 July 2009 Transfield Services (TSE) announced its FY09 result would be impacted by an impairment charge of A$168m (US$135m) on a pre-tax basis relating to its USM business. It also confirmed guidance for FY09 NPAT pre-amortisation growth at the lower end of the 10–20% range.
Implication

 Hitting guidance is encouraging. Prior to the announcement CBA was forecasting growth of 8.7% and consensus expected growth of 7.9%. We noted in June that the sale of the wind farm developments (at an estimated pre-tax profit of $3–5m) significantly increased the chances of it hitting its FY09 guidance. This will be an ongoing revenue item for TSE and so we do not see it as low quality.

 Impairment charge flagged. With the new CEO coming on board in March we thought that there was a good chance of impairment charges in USM. TSE has written down the carrying value of USM (which includes the Horizon and Whelan’s bolt-ons) by 32% to US$283m. In 2006, we commented that TSE overpaid when it acquired USM for $372m on an EV/EBITA multiple of 9.7x. At the time USM’s EBITDA margins were double digit. We argued this was unsustainable given the low single digit margins in the Australian facilities management business and since the acquisition USM’s margins have fallen to high single digit. Revenue has also been $100m below the assumptions in TSE’s acquisition model.

 Dividends not impacted by writedown. TSE has stated that the impairment does not impact its ability to pay dividends. The writedown will not be recorded in the parent entity’s retained earnings account which was last quoted at $62m in the FY08 accounts. Dividends are paid from this account and the balance will be sufficient to pay future dividends.
Earnings and valuation revisions

 We have increased our EPS forecast in FY09 by 1% to reflect 10% NPAT growth (as per guidance). Our forecasts in FY10 and FY11 are unchanged, as are the DCF valuation of $3.63 and 12-month price target of $3.15.

 NPAT: FY09 $116.3m; FY10 $121.5m; FY11 $127.4m.

 EPS: FY09 31.8 cps; FY10 29.0 cps; FY11 29.9 cps.

Investment view We look forward to the FY09 result where we expect an update on TSE’s strategy, particularly with respect to its international expansion of recent years. Domestically, the business has struggled to retain some large contracts. Notwithstanding current challenges, we see significant valuation upside in TSE on both an absolute and relative basis (particularly when compared to UGL which trades at 12.4x FY10 EPS vs TSE at 8.4x). Our recommendation remains ACCUMULATE / MARKET PERFORM. TSE will report its FY09 results on 26 August 2009.

We all celebrated when copper rose above $US2 a pound but now it is 20% higher. Oil has almost doubled from its lows, and so on. Remember, it was only last March when the ASX 200 almost touched 3100 – a fall of more than 50% on the peak of November 2007. Now it is trading more than 30% above that low.

Todays update  for the share market

The Australian share market rose more than 1 per cent today, driven by a strong performance of the resources and financial sectors.

At the close, the S&P/ASX 200 was 45.9 points higher, or 1.1 per cent, at 4309.3, while the broader All Ordinaries rose 43.4 points, or 1 per cent, to 4313.9.

Among the sectors, materials jumped 2 per cent, financial stocks rose 1.7 per cent and energy gained 0.7 per cent.

Stockbrokers are now contacting their clients suggesting stocks to buy, and real estate agents are over the moon. Australian companies have raised about $90 billion over the past year or about 15% of the world total. Our leading companies are in good shape.

What the market is telling us is that we are headed for a “V” shaped recovery, which will be rapid and that the doomsayers are simply wrong.

- Asian stocks climb to 11-month high
- The dollar rose above 84 US cents on robust data
- Oil hovers above $US71 on demand optimism
- Gold holds above $US955 but appetite wanes
- Dow futures are 32 points lower at 9216.

Mergers and Acquisitions 2009 2010

Eastern Star Gas (ESG) During a most difficult year in the stockmarket, the performance of the coal seam gas (CSG) sector was, thanks to M&A activity, nothing short of breathtaking. At the large end, BG bid unsuccessfully for Origin and successfully for Queensland Gas, while Petronas and Santos committed to a large joint venture, something former target Origin also did with US giant ConocoPhillips.

At the smaller end. both Sunshine Gas and Pure Energy were taken over, and we think another target in this range is Eastern Star. It has vast CSG reserves in Queensland and recently “welcomed” Santos on to its register after the latter bought a 20% stake from Hillgrove Resources.

Origin (ORG)/Santos (STO) At the larger end of the CSG sector, there is still a strong chance Origin and Santos will either merge their Queensland-based assets (much like is currently occurring with BHP and Rio’s iron ore holdings in Western Australia) or their entire corporate structures.

Along with the aforementioned BG, both companies are attempting to build huge CSG plants around Gladstone in Queensland to supply energy-hungry Asian customers. At present each of the three players plans to develop separately owned pieces of infrastructure, but given the many billions of dollhttp://www.australianstockwatch.com/ars this would require, at some stage the three main players will become two – or even one.

 So we look forward to a fruitful start to a booming year of Mergers and Acquisitions

ANZ head of economics Warren Hogan said the global financial crisis was affecting the Australian labour market.

“As a leading indicator of economic conditions in Australia, the latest job advertisements data suggest the global financial crisis has had a substantial impact on the Australian economy in the December quarter,” he said.

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