Australian Economic News

Lucky country still have lots to sell to China after commodities...

Selling to China: secrets to cashing in on demand

• REBECCA URBAN
  
• THE AUSTRALIAN
  
• SEPTEMBER 14, 2015 12:00AM
  

[Image: 388614-1db68012-5873-11e5-a7dc-18321c6979b2.jpg]
Sydney-based online retailer Patrick Liu is capitalising on Australia’s reputation for high quality and safe products. Picture: Aaron Francis Source: News Corp Australia
[b]Australian businesses looking to capitalise on China’s growing ­demand for locally made products should be targeting health-conscious, middle-class women living in second- and third-tier ­cities, who care more about quality than price when sourcing overseas goods.[/b]
New research into the online shopping habits of Chinese ­consumers, provided exclusively to The Australian, has revealed milk powder, food, health supplements and skincare products to be the most preferred Australian products.
Digital marketing group Think China surveyed 3000 ­Chinese shoppers about their attitudes towards Australian products and analysed internet search data in a bid to inform local businesses considering exporting to China in anticipation of the ­impending China-Australia free trade agreement unlocking opportunities.
They found women to be the most active online shoppers, making up 66 per cent of internet users who had searched for ­Australian products via the e-commerce platforms Tmall and Taobao. More than 80 per cent of those surveyed cited “quality” as an “extremely important” consideration when buying overseas products online, with price having the least effect on a purchasing decision.
Australia was the second most searched-for country, behind the US, between 2011 and 2015, with the accompanying term “supplements” comprising 31 per cent of searches, followed by “skincare” (17 per cent), “dairy” (13 per cent) and “pharmaceuticals” (11 per cent).
Sydney-based online retailer Patrick Liu is capitalising on Australia’s reputation for high quality and safe products.
“Selling online actually cuts out the middle man and keeps costs competitive,” he said.
Think China’s Ben Sun, who wrote the report, said the number of Chinese online consumers was booming, reaching 361 million in December last year, up 19.4 per cent on the year before. About 75 per cent of online consumers lived in second- and third-tier cities outside Beijing, Shanghai and Guangzhou, he said.
“The growth in the number of online Chinese shoppers, and the formidable purchasing power of Chinese consumers, makes the online Chinese marketplace and important channel for Australian enterprises,” Mr Sun said. “Despite the popularity of Australian products in China, as of July, there were only 47 individual Australian brands with an ­online presence on Alibaba’s shopping platforms Tmall and Tmall Global. “As an Asian-literate trading nation, Australia certainly has a lot more to offer.”
The report comes as Austrade has been touring regional parts of the country in a bid to encourage rural and regional businesses to consider emerging opportunities to export to China.
Mr Liu agreed that many Australian companies were intimidated by the idea of selling to China, seeing it as complicated, highly regulated and costly. But he said selling online was “very transparent”. “ You can see how much of the product is sold, who is buying it, their age group and even where they are from.”
Launched in 2013, Mr Liu’s company CarePlus Australia, has a shopfront on China’s Tmall Global, an online platform that permits foreign companies to sell products into free-trade zones, avoiding significant taxes.
His suppliers include local icons Greens Foods, Blackmores, Swisse and Jurlique. Annual sales for the business were about $5 million last year and are forecast to double this year to $10-$12m.
Mr Liu said while the benefits of the ChAFTA might take time to manifest, the deal was good for Australia’s ties with China.
“When the Chinese previously think about Australia, they think of Australia as a tourist destination. Now they see it … as a partner, a place to buy things from, a place they know about, as a friend,” he said.
Brent Moore, Austrade’s trade commissioner based in Shanghai, spent last week travelling around Victoria, visiting regional areas to promote export opportunities in China.
“For a small business, the conventional way of selling to China was probably too difficult in the past,” Mr Moore said.
“With online selling those costs are coming down and we see good opportunities to sell to ­Chinese consumers looking for local brands, particular organic food, skincare, cosmetics and baby and maternity products.”
Mr Moore said e-commerce platforms were more interactive, featuring videos and other media.

Will the new PM, make a different in Australia economy?

Australian PM-elect Turnbull to focus on the economy

ANBERRA - Australian prime minister elect Malcolm Turnbull promised to focus on improving the country's faltering economy as the public woke up on Tuesday to its fourth leader in two years.

The ruling Liberal Party voted to oust Tony Abbott as prime minister in favor of Turnbull, a multi-millionaire former tech entrepreneur who is hugely popular with the electorate, in a secret ballot late on Monday.

"I'm filled with optimism and we will be setting out in the weeks ahead ... more of those foundations that will ensure our prosperity in the years ahead," Turnbull told reporters as he headed to parliament on Tuesday.
...
http://www.todayonline.com/world/austral...us-economy

(15-09-2015, 09:57 AM)CityFarmer Wrote: Will the new PM, make a different in Australia economy?

Australian PM-elect Turnbull to focus on the economy

ANBERRA - Australian prime minister elect Malcolm Turnbull promised to focus on improving the country's faltering economy as the public woke up on Tuesday to its fourth leader in two years.

The ruling Liberal Party voted to oust Tony Abbott as prime minister in favor of Turnbull, a multi-millionaire former tech entrepreneur who is hugely popular with the electorate, in a secret ballot late on Monday.

"I'm filled with optimism and we will be setting out in the weeks ahead ... more of those foundations that will ensure our prosperity in the years ahead," Turnbull told reporters as he headed to parliament on Tuesday.
...
http://www.todayonline.com/world/austral...us-economy

• Sep 15 2015 at 7:37 PM 
   
  
  
•  Updated Sep 15 2015 at 8:32 PM 
  

Malcolm Turnbull unites Coalition, business hopes surge

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/n/f/s/4/image.related.afrArticleLead.620x350.gjmnkq.png/1442321733393.jpg[/img]Prime Minister Malcolm Turnbull and Treasurer Joe Hockey during Question Time at Parliament House in Canberra on Tuesday 15 September 2015. Alex Ellinghausen
[Image: 1435296557869.png]

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by Phillip Coorey

Malcolm Turnbull has secured the support of the Nationals with $2 billion in extra payments for stay-at-home mothers, control over water policy, and a promise to back in Cabinet changes to competition law - a pledge that has big business warning its embrace of the new Prime Minister could sour fast.
While business in general was ecstatic at Mr Turnbull's elevationto the leadership and his vow to advocate economic reform, corporate Australia warned it would fight him if he succeeded in having cabinet adopt an effects test to crack down on the misuse of market power, mainly by big companies such as Wesfarmers and Woolworths.  
The Nationals sent Mr Turnbull a stern and early message they expected him to deliver when three Senators crossed the floor to vote against Labor and the Liberals and support a Greens motion backing an effects test.
[img=620x0]http://www.afr.com/content/dam/images/g/j/n/e/r/z/image.imgtype.afrArticleInline.620x0.png/1442321733188.jpg[/img]Treasurer Joe Hockey, who is standing firm, Employment Minster Eric Abetz and Defence Minster Kevin Andrews are expected to be dumped or demoted. Alex Ellinghausen
The Business Council of Australia returned fire, tweeting than under an effects test "prices will rise and consumers will suffer".
Keen to unite the Liberal Party and the Coalition following Monday's spill, Mr Turnbull also adopted the position of Tony Abbott and the party room majority onsame sex marriage by consigning the decision to the outcome of a post-election plebiscite. He also promised to make no changes to direct action climate change policy.
RESHUFFLE TO COME
Mr Turnbull is also unlikely to purge his cabinet entirely of Abbott supporters when he announces an upheaval of the ministry on Monday, which will include the promotion of several women to reduce the gender imbalance.

[img=620x0]http://www.afr.com/content/dam/images/g/j/n/0/7/b/image.imgtype.afrArticleInline.620x0.png/1442326153916.jpg[/img]Mr Turnbull at Government House with his daughter Daisy, wife Lucy and grandson Jack. Andrew Meares
There is pressure to retain Abbott supporters but top performers such as Finance Minister Mathias Cormann, Assistant Treasurer Josh Frydenberg, Trade Minister Andrew Robb and possibly Environment Minister Greg Hunt, to be left alone.
But Treasurer Joe Hockey, who is standing firm, Employment Minster Eric Abetz and Defence Minster Kevin Andrews are expected to be dumped or demoted.
Social Service Minister Scott Morrison is all but certain to become Treasurer while Christopher Pyne was being touted as defence minister, a move which would be a sop to his home state of South Australia. 
Former assistant treasurer Arthur Sinodinos and Turnbull supporter is believed to want back in to the ministry and would deserve a cabinet portfolio.

Early polls showed immediate results. A snap Morgan Poll showed Mr Turnbull beating Bill Shorten as preferred prime minster by 70 per cent to 24 per cent.
'NO SNIPING'
A bitterly disappointed Mr Abbott blamed the media and treacherous colleagues for his downfall but vowed to do nothing to destabilise Mr Turnbull.
Mr Abbott attributed hs ouster to "poll-driven panic" and a "febrile media culture that has developed that rewards treachery".

He accused the media of acting like the "assassin's knife" for quoting unnamed sources when reporting leadership speculation.
Mr Abbott indicated he would stay in the backbench and would allow Mr Turnbull to govern unimpeded.
"There will be no leaking, no undermining, no sniping," he said.
"I want our government and our country to succeed."
When Mr Turnbull was Opposition leader in 2009, the Nationals almost split from the Coalition they were so angy over Mr Turnbulls' support for a carbon price.
NO CARBON PRICE PLEDGE
Under the Coalition agreement that was renegotiated by Mr Turnbull and Nationals leader Warren Truss on Tuesday, Mr Turnbull agreed to never adopt an emissions trading scheme or price on carbon for the remainder of his prime ministership. 
He agreed to give stay at home mothers which children aged under one year old an extra $1000 a year if they were eligible for the Family Tax Benefit Part B payment. Ths will cost the budget about $00 million a year. Mr Truss said the extra spending would be offset but declined to say how.
Also, the responsibility for water policy will stripped from the Environment Department and the Murray Darling Basin Authority and given the Agriculture Department, under minister Barnaby Joyce.
The pledge to take back to cabinet the original effects test as proposed by Small Business Minster Bruce Billson, and fight for it, looms as the most troublesome undertaking.

During a subdued meeting of the party room meeting on Tuesday,people on both sides of the coup called for unity.
Mr Robb, who voted for Mr Abbott, told the party room "there will be some deep bruising" but there would be an election within a year and "we have to get on with it".
Mr Pyne, who was instrumental in dumping Mr Abbott, told MPs they should "get back on stage and keep on singing".
Liberal Senator Cory Bernardi was bitter about the result and accused his colleagues of treachery.
"Mr Turnbull as PM will receive a great deal more loyalty than he displayed but then again that's not setting the bar very high, is it," he said.
He said it would be obvious from the new ministerial lineup "those who have taken the 30 pieces of silver".
"It's treachery of the highest order but what's done is done and they'll get the spoils of office."
Others who backed Mr Turnbull and helped marshall numbers include Victorians Scott Ryan, Mitch Fifield and Kelly O'Dwyer, Queenslander James McGrath, Mal Brough, Steve Ciobo, and Stuart Robert, South Australians Simon Birmingham and Mr Pyne, and NSW's Peter Hendy, Marise Payne and Paul Fletcher.
LABOR SCAMBLES
Labor scrambled on Tuesday to frame Mr Turnbull as somebody who had sold out his policy principles for the leadership. Mr Shorten said Australia needed a change of government, not a new Liberal leader.
Business was overjoyed with the change, expressing hope that Mr Turnbull would generate confidence and make good n his pledge to explain to voters the need for economic change.
The head of the government's Audit Commission Tony Shepherd was blunt in his support for the switch.
"Business will be pleased that the decision was quick and emphatic and expect that the new Prime Minister Turnbull and his team will get on with the job and deliver," he said.
"The economy is treading water with some ominous signs. Our economy must transform itself and we cannot afford to kick the can down the road any further.
"We are encouraged by Mr Turnbull's commitment to traditional government by Cabinet, a system which has served us so well."

(13-09-2015, 11:12 PM)greengiraffe Wrote: Lucky country still have lots to sell to China after commodities...

Selling to China: secrets to cashing in on demand

• REBECCA URBAN
  
• THE AUSTRALIAN
  
• SEPTEMBER 14, 2015 12:00AM
  

0

[Image: 388614-1db68012-5873-11e5-a7dc-18321c6979b2.jpg]
Sydney-based online retailer Patrick Liu is capitalising on Australia’s reputation for high quality and safe products. Picture: Aaron Francis Source: News Corp Australia
[b]Australian businesses looking to capitalise on China’s growing ­demand for locally made products should be targeting health-conscious, middle-class women living in second- and third-tier ­cities, who care more about quality than price when sourcing overseas goods.[/b]
New research into the online shopping habits of Chinese ­consumers, provided exclusively to The Australian, has revealed milk powder, food, health supplements and skincare products to be the most preferred Australian products.
Digital marketing group Think China surveyed 3000 ­Chinese shoppers about their attitudes towards Australian products and analysed internet search data in a bid to inform local businesses considering exporting to China in anticipation of the ­impending China-Australia free trade agreement unlocking opportunities.
They found women to be the most active online shoppers, making up 66 per cent of internet users who had searched for ­Australian products via the e-commerce platforms Tmall and Taobao. More than 80 per cent of those surveyed cited “quality” as an “extremely important” consideration when buying overseas products online, with price having the least effect on a purchasing decision.
Australia was the second most searched-for country, behind the US, between 2011 and 2015, with the accompanying term “supplements” comprising 31 per cent of searches, followed by “skincare” (17 per cent), “dairy” (13 per cent) and “pharmaceuticals” (11 per cent).
Sydney-based online retailer Patrick Liu is capitalising on Australia’s reputation for high quality and safe products.
“Selling online actually cuts out the middle man and keeps costs competitive,” he said.
Think China’s Ben Sun, who wrote the report, said the number of Chinese online consumers was booming, reaching 361 million in December last year, up 19.4 per cent on the year before. About 75 per cent of online consumers lived in second- and third-tier cities outside Beijing, Shanghai and Guangzhou, he said.
“The growth in the number of online Chinese shoppers, and the formidable purchasing power of Chinese consumers, makes the online Chinese marketplace and important channel for Australian enterprises,” Mr Sun said. “Despite the popularity of Australian products in China, as of July, there were only 47 individual Australian brands with an ­online presence on Alibaba’s shopping platforms Tmall and Tmall Global. “As an Asian-literate trading nation, Australia certainly has a lot more to offer.”
The report comes as Austrade has been touring regional parts of the country in a bid to encourage rural and regional businesses to consider emerging opportunities to export to China.
Mr Liu agreed that many Australian companies were intimidated by the idea of selling to China, seeing it as complicated, highly regulated and costly. But he said selling online was “very transparent”. “ You can see how much of the product is sold, who is buying it, their age group and even where they are from.”
Launched in 2013, Mr Liu’s company CarePlus Australia, has a shopfront on China’s Tmall Global, an online platform that permits foreign companies to sell products into free-trade zones, avoiding significant taxes.
His suppliers include local icons Greens Foods, Blackmores, Swisse and Jurlique. Annual sales for the business were about $5 million last year and are forecast to double this year to $10-$12m.
Mr Liu said while the benefits of the ChAFTA might take time to manifest, the deal was good for Australia’s ties with China.
“When the Chinese previously think about Australia, they think of Australia as a tourist destination. Now they see it … as a partner, a place to buy things from, a place they know about, as a friend,” he said.
Brent Moore, Austrade’s trade commissioner based in Shanghai, spent last week travelling around Victoria, visiting regional areas to promote export opportunities in China.
“For a small business, the conventional way of selling to China was probably too difficult in the past,” Mr Moore said.
“With online selling those costs are coming down and we see good opportunities to sell to ­Chinese consumers looking for local brands, particular organic food, skincare, cosmetics and baby and maternity products.”
Mr Moore said e-commerce platforms were more interactive, featuring videos and other media.

Lai liao... that's the beauty of a freely floating exchange rates. In addition, as long as you have quality eports, you will stay relevant and survive.

Services sector such as tourism and education have yet to be factored into the following survey... 

Like that always say... its a no worries and beautiful country...

No Vested Interests 


Manufacturing boosted by lower Australian dollar

• AAP
  
• SEPTEMBER 17, 2015 10:56AM
  

[b]Manufacturing is becoming a key beneficiary of low interest rates and a weaker Australian dollar, a new survey suggests.[/b]
The latest Westpac-Australian Chamber of Commerce and Industry survey of industrial trends shows that, while moderating in the September quarter, results remain well above those of 2014.
“The sharp drop in the Australian dollar is reshaping the economy ... boosting the export competitiveness of manufacturers and increasing export returns,” Westpac senior economist Andrew Hanlan says.

(17-09-2015, 01:34 PM)greengiraffe Wrote:

(13-09-2015, 11:12 PM)greengiraffe Wrote: Lucky country still have lots to sell to China after commodities...

Selling to China: secrets to cashing in on demand

• REBECCA URBAN
  
• THE AUSTRALIAN
  
• SEPTEMBER 14, 2015 12:00AM
  

0

[Image: 388614-1db68012-5873-11e5-a7dc-18321c6979b2.jpg]
Sydney-based online retailer Patrick Liu is capitalising on Australia’s reputation for high quality and safe products. Picture: Aaron Francis Source: News Corp Australia
[b]Australian businesses looking to capitalise on China’s growing ­demand for locally made products should be targeting health-conscious, middle-class women living in second- and third-tier ­cities, who care more about quality than price when sourcing overseas goods.[/b]
New research into the online shopping habits of Chinese ­consumers, provided exclusively to The Australian, has revealed milk powder, food, health supplements and skincare products to be the most preferred Australian products.
Digital marketing group Think China surveyed 3000 ­Chinese shoppers about their attitudes towards Australian products and analysed internet search data in a bid to inform local businesses considering exporting to China in anticipation of the ­impending China-Australia free trade agreement unlocking opportunities.
They found women to be the most active online shoppers, making up 66 per cent of internet users who had searched for ­Australian products via the e-commerce platforms Tmall and Taobao. More than 80 per cent of those surveyed cited “quality” as an “extremely important” consideration when buying overseas products online, with price having the least effect on a purchasing decision.
Australia was the second most searched-for country, behind the US, between 2011 and 2015, with the accompanying term “supplements” comprising 31 per cent of searches, followed by “skincare” (17 per cent), “dairy” (13 per cent) and “pharmaceuticals” (11 per cent).
Sydney-based online retailer Patrick Liu is capitalising on Australia’s reputation for high quality and safe products.
“Selling online actually cuts out the middle man and keeps costs competitive,” he said.
Think China’s Ben Sun, who wrote the report, said the number of Chinese online consumers was booming, reaching 361 million in December last year, up 19.4 per cent on the year before. About 75 per cent of online consumers lived in second- and third-tier cities outside Beijing, Shanghai and Guangzhou, he said.
“The growth in the number of online Chinese shoppers, and the formidable purchasing power of Chinese consumers, makes the online Chinese marketplace and important channel for Australian enterprises,” Mr Sun said. “Despite the popularity of Australian products in China, as of July, there were only 47 individual Australian brands with an ­online presence on Alibaba’s shopping platforms Tmall and Tmall Global. “As an Asian-literate trading nation, Australia certainly has a lot more to offer.”
The report comes as Austrade has been touring regional parts of the country in a bid to encourage rural and regional businesses to consider emerging opportunities to export to China.
Mr Liu agreed that many Australian companies were intimidated by the idea of selling to China, seeing it as complicated, highly regulated and costly. But he said selling online was “very transparent”. “ You can see how much of the product is sold, who is buying it, their age group and even where they are from.”
Launched in 2013, Mr Liu’s company CarePlus Australia, has a shopfront on China’s Tmall Global, an online platform that permits foreign companies to sell products into free-trade zones, avoiding significant taxes.
His suppliers include local icons Greens Foods, Blackmores, Swisse and Jurlique. Annual sales for the business were about $5 million last year and are forecast to double this year to $10-$12m.
Mr Liu said while the benefits of the ChAFTA might take time to manifest, the deal was good for Australia’s ties with China.
“When the Chinese previously think about Australia, they think of Australia as a tourist destination. Now they see it … as a partner, a place to buy things from, a place they know about, as a friend,” he said.
Brent Moore, Austrade’s trade commissioner based in Shanghai, spent last week travelling around Victoria, visiting regional areas to promote export opportunities in China.
“For a small business, the conventional way of selling to China was probably too difficult in the past,” Mr Moore said.
“With online selling those costs are coming down and we see good opportunities to sell to ­Chinese consumers looking for local brands, particular organic food, skincare, cosmetics and baby and maternity products.”
Mr Moore said e-commerce platforms were more interactive, featuring videos and other media.

Lai liao... that's the beauty of a freely floating exchange rates. In addition, as long as you have quality eports, you will stay relevant and survive.

Services sector such as tourism and education have yet to be factored into the following survey... 

Like that always say... its a no worries and beautiful country...

No Vested Interests 


Manufacturing boosted by lower Australian dollar

• AAP
  
• SEPTEMBER 17, 2015 10:56AM
  

[b]Manufacturing is becoming a key beneficiary of low interest rates and a weaker Australian dollar, a new survey suggests.[/b]
The latest Westpac-Australian Chamber of Commerce and Industry survey of industrial trends shows that, while moderating in the September quarter, results remain well above those of 2014.
“The sharp drop in the Australian dollar is reshaping the economy ... boosting the export competitiveness of manufacturers and increasing export returns,” Westpac senior economist Andrew Hanlan says.

http://www.valuebuddies.com/thread-5485-...#pid119793

My deductions proven right on the service sector Down Under... Lucky country still?

Vitamin boom shows there are still opportunities in a tough market

• THE AUSTRALIAN
  
• SEPTEMBER 19, 2015 12:00AM
  

[Image: 841244-be8da27e-5dd5-11e5-896e-4e71406d3561.jpg]
Blackmores chairman Marcus Blackmore at the company’s Warriewood headquarters in Sydney.Source: News Limited
[b]The dramatic jump in the shares of Australia’s vitamin makers Blackmores and Vitaco exemplify the opportunities that can still be found in an overall dull and directionless market.[/b]
Blackmores shares vaulted above $130 this week, up from $105 at the start of the month and a fourfold increase from $30 a year ago.
Smaller rival Vitaco, a vitamins and sports nutrition company, listed on the ASX boards this week, vindicating the owners’ unusual move of meeting with fund managers in the middle of earnings season. It saw a hearty 23 per cent rally on the open before ending up 14 per cent on its maiden day.
Australia’s economic growth is stuck around 2 per cent and potential may also be lower than the 3.25 per cent cheerfully pencilled in to the federal budget. But companies in certain niches are still able to thrive and grow, as the vitamin companies demonstrate.
A third vitamin maker, Swisse Wellness, was sold yesterday for a hefty $1.67 billion, well above a mooted $1bn price, to Hong Kong-listed Biostine, beating out final offers from Chinese drug maker Shanghai Pharma and Hony Capital.
The vitamin firms have tapped into a growth thematic — a sudden surge in Chinese demand for quality vitamins from a reputable source — that will insulate revenues regardless of the economic backdrop. The same is true of healthcare firms and the growing aged care sector.
“We see no point in worrying about the Federal Reserve, slowing global growth, falling commodity prices and an uncertain macro outlook, as these exogenous events by definition are beyond our control,” Morgans analysts Derek Jellinek and Scott Power told clients.
“Defensive, structural-growth thematic of healthcare and continued AUD weakness will reign supreme,” they said, naming their top picks as Healthscope, CSL, Sonic and Regis Healthcare.
The vitamin makers are the beneficiaries of health scares in China involving food manufacturers and baby formula that have driven demand for Western brands.
Australian companies are in particular favour for their ethically sourced and quality ingredients, which feature prominently on the websites.
The Chinese market is massive, with health supplements and vitamin sales estimated at $17bn a year.
Vitaco exports its vitamins and dietary supplements to 30 countries, mainly in Asia and the Middle East, and is just tapping into China, which it estimates accounts for 8 to 10 per cent of sales.
Vitamins and supplements make up 44 per cent of revenue, with sports nutrition accounting for 38 per cent and health products like infant formula and milk biscuits (made with compressed milk powder) at 18 per cent.
Blackmores has found that aside from the company’s own exports, tourists and entrepreneurs are taking home suitcases full of vitamins and selling them on e-commerce sites, or having boxes shipped directly from Australian discount pharmacies.
Australians are also mailing vitamins to relatives back in China and some of the large discount chemists report being out of stock on popular lines. Both Black­mores and Vitaco also sell through the Chinese online marketplace Tmall.
Blackmores estimates direct sales to Asia totalled $84m last financial year, rising to $150m when Asian tourists and individuals are added in.
It has already doubled capacity at its bottling facility on Sydney’s North Shore, and plans to double capacity again this year to a target of 750 million capsules a month, up from 200 million 18 months ago.
Investors need to look far beyond the perennial ASX favourites of the banks and other yield plays to find growth.
UBS Global Asset Management Australia head of investment strategy Tracey Mc­Naughton warns that in a world of lower potential growth and lower interest rates than in previous economic cycles, investors need to be more nimble in seeking out opportunities. “You need to be far more active. In a world where it’s very hard to get returns, you need to look far and wide — bonds, currencies, going short as well as well as long,” McNaughton says.
“Having as wide an investable universe as possible is critical.”

Australia hit hardest by China investment crunch, IMF says

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/m/0/p/c/image.related.afrArticleLead.620x350.gjreuu.png/1442830557280.jpg[/img]Slowing down: Robots work on the welding line in Beijing. Bloomberg
[Image: 1425257720877.png]

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by Jacob Greber
Australia will be the worst-hit advanced economy from slowing Chinese investment growth, according to secretive International Monetary Fund research considered too politically sensitive for full publication.
Only Iran, Kazakhstan, Saudi Arabia, Zambia and Chile would suffer a bigger effects on their economies.
An indicative interpretation of the IMF's modelling based on Treasury budget numbers also suggests it expects Australia's annual growth growth rate will be 2.5 per cent from 2020 onwards, making it harder to return the budget to surplus early next decade.
The findings are a reality check for Australia's new Prime Minister, Malcolm Turnbull, and Treasurer Scott Morrison, who inherit a 10-year budget outlook that assumes the economy will grow 3.5 per cent for five years after 2017-18.
[img=620x0]http://www.afr.com/content/dam/images/g/j/r/r/c/f/image.imgtype.afrArticleInline.620x0.png/1442826599405.png[/img]
Some economists, including at the Reserve Bank of Australia, have argued Australia's potential growth may now be less than 3 per cent, implying growth of less than 2 per cent if the IMF's predictions come true.
The research forms the analytical basis of a series of coded warnings delivered by IMF managing director Christine Lagarde in recent weeks that have put emerging economies on notice to watch for potential shocks out of China.
While Ms Lagarde hasn't provided details of the findings in her speeches, deputy managing director Min Zhu told an audience in Dalian, China, this month that a near halving of investment growth in the second-biggest economy over the next five years would cut about1 percentage point from Australia's potential GDP growth rate by the end of that period.
The estimate – revealed in a photograph of slides presented at a World Economic Forum by Dr Zhu, and seen by The Australian Financial Review – indicates Australia's economy will miss out on no less than $16 billion a year of additional GDP by 2020.


INVESTMENT TO FALL FURTHER
Critically, the estimates are built on the Chinese government's expectation that investment will fall steadily across the world's second largest economy from 46 per cent of GDP to around 35 per cent over the next five to 10 years.
The country's authorities – who are trying to engineer a shift away from a reliance on exports to more domestic-sources of economic growth – expect investment growth to fall to 4.6 per cent over the next half decade from an average of 9.5 per cent over the last five years.
For each percentage point decline in Chinese investment growth, Australia's potential GDP falls by 0.2 of a percentage point, Dr Zhu's modelling predicts.

By contrast, the fallout for Brazil, Australia's main iron ore competitor, would be abouthalf that amount per year, as would be the case for Germany. Countries likely to suffer the most from China's investment slowdown, according to the IMF, would be Zambia and Chile, where growth would fall by twice as much as Australia.
If Chinese investment growth slows even faster, as many China experts believe, the affect on Australia and key commodity-based emerging economies will be correspondingly larger.
"This is the good scenario," said Alphabeta economist Andrew Charlton, who attended the briefing just over a week ago. "This is the IMF pumping up everyone's tyres and not offending the Chinese scenario where everything happens smoothly."
"Even if the Chinese government manages a smooth transition, the planned investment slowdown represents a 1 per cent drag on Australian GDP growth for the next decade."

Dr Charlton, a former adviser to Labor prime minister Kevin Rudd and former senior Australian government official to Group of 20 economic summits, says the IMF research underscores the need for Australia to re-position itself to capture "the China of the future, not the past".
"There's not much we can do tearing our hair out about falling commodity prices, that's here to stay. This is about how quickly we adapt and seize new opportunities," he said.
Alphabeta, a consultancy firm, has identified and analysed what it describes as the "lucky eight" sectors outside mining that businesses and investors should focus on, not least because of the recent trade deal signed by former prime minister Tony Abbott with his Chinese counterpart.
These are retail, agriculture, tourism, financial services, clean energy and environmental services, healthcare, advanced manufacturing and education.
"For 10 years, Australians drank the commodities Kool-Aid. We built our economy around the assumption that the China supercycle would extend as far as the eye could see," he said.
"Successive governments loaded up the budget, the miners poured shareholder funds into unrestrained expansion and households took on unprecedented debt."
Dr Charlton argues the next phase of China's growth won't be so straightforward for Australia to tap into. "It will require much more active positioning to ensure we can benefit from China's growth," he said.

PM change ‘boost to confidence’

• AAP
  
• SEPTEMBER 22, 2015 3:05PM
  

[b]A change in the nation’s leader has helped spark a turnaround in consumer confidence.[/b]
The ANZ/Roy Morgan weekly consumer confidence index rose 8.7 per cent the week Malcolm Turnbull became prime minister, bouncing back from three weeks of falls.
ANZ chief economist Warren Hogan said the change in prime minister was the most likely reason for the surge in confidence, but the new administration would need to deliver on the economy to maintain that bounce.
“The sharp jump in consumer confidence last week is a clear vote of confidence in the new prime minister, Malcolm Turnbull,” he said.
“We believe the new prime minister’s first 100 days in office will be essential to formulating a new narrative for the economy that underpins confidence in the economic outlook,” he said.
Mr Hogan said expectations for the new prime minister were clearly high, not unlike when the coalition won government in September 2013, with Tony Abbott as leader.
“The community will be sensitive to disappointment on this front,” he said.
“Consumer caution and gloom in the long-term outlook could easily re-emerge, given weak wages growth and sub-par global economic activity.”
CommSec chief economist Craig James said performance of the new administration would be a key factor on whether the bounce in consumer confidence would be sustained.
“Increased confidence is certainly a positive for the Australian economy hopefully translating into increased spending, investment and employment,” he said.
Mr James said other factors such as a 1.5 per cent lift in the local stockmarkets over the week and some positive comments on the economy from Reserve Bank governor on the economy would also have helped consumer confidence.
“Even before the latest survey, the RBA noted that views on family finances were above average and supporting consumer spending,” he said.
“The latest consumer confidence data just reinforces the Reserve Bank view.”
The ANZ survey was conducted the weekend after Malcolm Turnbull beat Tony Abbott in a liberal leadership spill on September 14.

If Aussie economy is so jelek... why the following?

Confused Gong Gong

Foreign takeovers tipped to surge

• THE AUSTRALIAN
  
• SEPTEMBER 23, 2015 12:00AM
  

Andrew White
[Image: andrew_white.png]
Associate Editor
Sydney

[Image: 332008-e0654cc8-6116-11e5-a366-6ffd7a84795b.jpg]
Australia inbound M&A. Source: TheAustralian

[b]Foreign takeovers are heading for a banner year in 2015 as the ­combination of a lower dollar and a falling sharemarket push ­companies into the target zone for offshore acquirers.[/b]
More than a week before the end of the September quarter, ­inbound takeovers of Australian companies total $35.3 billion, boosted last week by bids for ­vitamin maker Swisse and credit reporting bureau Veda.
The tally is just $2bn below last year’s figure of $37.6bn, and with a quarter to go is on track for the best year since 2011 when foreign raiders scooped up $55.78bn, according to data from Thomson Reuters Deals Intelligence.
Bankers said interest from offshore acquirers had been high all year, particularly from the US and from Asia, where several countries peg their exchange rate to the resurgent greenback.
“Part of it is currency-related,’’ said Anthony Sweetman, the head of investment banking at UBS Australia. “But in any given year it is only a small number of deals that make a difference to the tally and you are seeing more of them now.’’
The resurgence in inbound takeovers coincides with a fall in the Australian dollar exchange rate from above parity in 2013 to a low of US69.08c this month and a sharemarket rout that saw the S&P/ index fall 16.4 per cent from its April peak by late August. Both have acted to lower the US dollar cost of buying local companies and made it more expensive and difficult for local companies to ­expand offshore.
The Australian dollar has held up better against other major ­currencies including the yen, euro and Canadian dollar.
Canadian investor Brookfield Infrastructure Partners’ $9bn bid for ports and rail operator Asciano and Japan Post’s $6bn takeover of transport group Toll headline the big foreign takeovers this year, while private equity groups KKR and Varde Partners bought GE Capital’s local operations for $4.5bn and Macquarie Group paid $4bn for aircraft leasing business AWAS.
The year could be headed for a strong finish, with Ausgrid’s electricity distribution business and IFM Investors’ renewable energy business Pacific Hydro being auctioned to consortia of local and international groups.
The figures show the volume and value of deals climbed with the Australian dollar from lows near 60c in the aftermath of the GFC to above parity in 2011. Foreign buyers’ interest in Australian deals waned for two years after that; however, as the currency held above parity with the greenback, before beginning to climb again as the exchange rate fell.
Investment bankers said there was no strict correlation between the exchange rate and inbound M&A. But they said it could act as a trigger for buyers who were ­already looking at local targets.
“I don’t think that someone is going to wake one day and say: ‘The dollar is at US70c, I will go out and buy something’,’’ said Gareth Cope, co-head of Rothschild Australia. “Companies are not making major strategic decisions based on what the dollar is doing. But if the strategic decision has been taken, the exchange rate can be a factor.
“Most companies have a list of things that they would like to acquire; they know what they want and they know where it is, even on the other side of the world,’’ said John Gidney, vice-chairman of boutique advisory firm Greenhill’s Australian operations.
“If they think the dollar is going to drop another 10 per cent you might wait another couple of months, but it is a timing issue, not a strategic issue,’’ he added.
UBS’s Mr Sweetman said the level of foreign interest also reflected increased confidence on the part of US companies as their home economy continues to recover and they look for growth. The continuing weakness of the European economies, as well as the lower euro, helped explain the lack of activity from acquirers there. The heightened activity is in contrast to continuing subdued outbound M&A by Australian companies, with activity running at about half the level of boom years in 2006 and 2007.
Despite the high exchange rate between 2011 and 2013 vastly improving their purchasing power for offshore assets, Australian companies shaken by the GFC ­focused instead on cost-cutting and lifting dividend payouts.
Mr Cope pointed out the low level of outbound deals highlighted the conservative nature of ­Australian boards, as well as pressure from institutions to lift returns, even with subdued revenue growth.
But he said companies including Macquarie, BT Funds Management, and Ramsay Health Care, were now reaping the rewards of offshore earnings boosted by the falling exchange rate.

(22-09-2015, 04:26 PM)greengiraffe Wrote: PM change ‘boost to confidence’

• AAP
  
• SEPTEMBER 22, 2015 3:05PM
  

[b]A change in the nation’s leader has helped spark a turnaround in consumer confidence.[/b]
The ANZ/Roy Morgan weekly consumer confidence index rose 8.7 per cent the week Malcolm Turnbull became prime minister, bouncing back from three weeks of falls.
ANZ chief economist Warren Hogan said the change in prime minister was the most likely reason for the surge in confidence, but the new administration would need to deliver on the economy to maintain that bounce.
“The sharp jump in consumer confidence last week is a clear vote of confidence in the new prime minister, Malcolm Turnbull,” he said.
“We believe the new prime minister’s first 100 days in office will be essential to formulating a new narrative for the economy that underpins confidence in the economic outlook,” he said.
Mr Hogan said expectations for the new prime minister were clearly high, not unlike when the coalition won government in September 2013, with Tony Abbott as leader.
“The community will be sensitive to disappointment on this front,” he said.
“Consumer caution and gloom in the long-term outlook could easily re-emerge, given weak wages growth and sub-par global economic activity.”
CommSec chief economist Craig James said performance of the new administration would be a key factor on whether the bounce in consumer confidence would be sustained.
“Increased confidence is certainly a positive for the Australian economy hopefully translating into increased spending, investment and employment,” he said.
Mr James said other factors such as a 1.5 per cent lift in the local stockmarkets over the week and some positive comments on the economy from Reserve Bank governor on the economy would also have helped consumer confidence.
“Even before the latest survey, the RBA noted that views on family finances were above average and supporting consumer spending,” he said.
“The latest consumer confidence data just reinforces the Reserve Bank view.”
The ANZ survey was conducted the weekend after Malcolm Turnbull beat Tony Abbott in a liberal leadership spill on September 14.

Start of a more stable political environment Down Under?


Group hugs as Malcolm Turnbull’s age of inclusion begins

• THE AUSTRALIAN
  
• SEPTEMBER 24, 2015 12:00AM
  

Niki Savva
[Image: niki_savva.png]
Opinion Columnist
Canberra

[Image: 987984-ba7b5016-61cf-11e5-afef-4942db4d24a5.jpg]
Illustration: Eric Lobbecke Source: TheAustralian
[b]Malcolm Turnbull’s first ministry has sent a powerful message of inclusion as well as regeneration. The photo of the new Prime Minister surrounded by all the women he has appointed to the cabinet and outer ministry, with his deputy Julie Bishop in the vanguard, will act as a clarion call to women that not only are they welcome inside the Liberal Party again, there is room for them at the top.[/b]
The previous administration kept talking about it, complaining incessantly about the shortage of prominent women despite the fact there were talented women there all along, waiting for the call, only to be locked out despite any number of opportunities to promote them. It was left to Turnbull to do it. He did it partly by having the courage to retire men who had a better run than they deserved or by appealing to mates such as Ian Macfarlane to step aside, which he did with great poise. Eric Abetz likewise maintained his dignity.
Will the country be less safe with Marise Payne as Defence Minister? Methinks her first press conference in that job showed it will not, nor would it have been a year ago when there was an opening. Michaelia Cash and Kelly O’Dwyer also have finally been given the opportunity to shine.
Importantly, Turnbull has conveyed a message of tolerance too. Many of those promoted, or who retained their positions, did not vote for him. Check them out: Andrew Robb, Scott Morrison, Mathias Cormann, Greg Hunt, Peter Dutton, Josh Frydenberg, Christian Porter. One of them went so far as to say he had spent more time discussing with the new Prime Minister the shape of things to come than he ever did with his predecessor. Those who suggest Turnbull has engaged in retribution, or that conservatives have been sidelined, are peddling self-serving nonsense.
While we wait for the changes in policy, there has been an immediate and welcome change in rhetoric, in tone and in manner. On Monday night, in a flirty, expansive interview with Leigh Sales, those viewers who had forgotten what Turnbull was like got an insight into an intelligent, complex personality. It also laid down some markers on matters on which he can be judged later, such as tax reform, the importance of polling in the lives of politicians, and the setting of policies within a free-market framework.
Yesterday, in another long interview, this time with Sky News, he was confident, cool, determined not to be led by one of the nation’s sharpest interviewers, David Speers, on to paths too dangerous to tread.
Turnbull has learned the value of consultation, and it shows. His colleagues are flattered he is asking, even more delighted when their suggestions are taken up, as some have been. It has come as a revelation to them, dispelling at least one doubt about his capacity to learn from his first time around. He has learned that colleagues often have good ideas too, so setting aside the time to talk to them pays off in more ways than one. Hallelujah.
The thrashing and gnashing of the capital-C conservatives continues, reminiscent if anything of the last moments of Pris, the replicant terminated by Deckard in the filmBlade Runner. If they want Bill Shorten to become prime minister, with everything that entails, they should keep it up. The lying, delusion, bitterness or vengefulness of the vanquished and their supporters is really smart. Dignified too. Not.
Turnbull cannot pander to those carrying on like they want him to fail, nor can he afford to ignore them. He needs to deliver another message, by way of a thoughtful, broad-ranging speech to promote the healing — or the bonding, if you like — of the party’s conservative and liberal wings.
It should come sooner rather than later because there is no point allowing things to fester.
The idea was prompted from one of many wise heads wanting him to succeed, one key to the success of the Howard era who became so disillusioned with the Abbott regime that he had stopped listening but is now, like many others, hopeful and alert.
The objective of such a speech should be to show Liberals, not just inside the government but in the party’s heartland (and to steal a favourite expression of John Howard’s) that what unites conservatives and small-l liberals is greater and more enduring than that which divides.
Take budget repair. Fulfilling the dream of returning it to surplus is both a liberal project and a conservative one. It is about prudent management of taxpayers’ dollars to ensure there will be money there for things society needs and cares about: strong defence, a proper safety net, improved health and education services.
Border protection is both a liberal project and a conservative one. Governments should be able to control who comes here, and if they can do that, they provide a vehicle for a more generous immigration and refugee program.
Tackling social problems with a strong focus on personal responsibility (such as domestic violence) is both a liberal project and a conservative one. Nowhere was that demonstrated more emphatically than when Howard reformed gun laws in the wake of the Port Arthur massacre. People are free only when they feel safe.
And so on.
Turnbull was restored to the leadership because he repaired relations with enough of the sensible Right to win. Others, except the completely unhinged, will gradually come across after a suitable period of mourning if he shows what they can achieve if they all work together.
But it will take more than words. Integral to the success of this government is the relationship between the Prime Minister and Scott Morrison.
When prime ministers and treasurers work well together, when both are at their peak in their jobs (which is the polite way of saying when both are up to their jobs) the government overall works well. That was the case with Bob Hawke and Paul Keating, then with Howard and Peter Costello. Keating slotted into the leadership role; however, after John Dawkins resigned as treasurer, the government struggled. A competent prime minister cannot succeed on his own.
Turnbull and Morrison have had a complicated relationship, which is now on a sound footing. Given their combined talents there is no reason, in the early years at least, they should not secure strong foundations for the Coalition, despite the best efforts of some to besmirch the Treasurer’s reputation.