|
| |
Become a Better Negotiator and Avoid Arguments
Ever noticed the outcome of an argument between two people or groups with contradicting views? Was there really a winner? It is important to come to some kind of understanding without burning bridges with the other party. If you're on the winning side of ...
Don’t Discount the Temporary Position Interview
If you think, 'it's just an interview for a temp job -- no big deal,' that's where you're mistaken. Some wonderful opportunities, networking connections and careers have resulted from temporary positions. Temporary assignments today run the gamut from ...
Offshore Outsourcing Best Practices Increase Your Profit Margin
When your company is forming long-term offshore outsourcing relationships with another company, the foundation of the success of this venture should be laid during the negotiation period itself. The centerpiece of this negotiation period is the Service ...
|
|
|
|
| |
- Complicated and rigid labor rules continue to hamper productivity growth, which seems to be slowing.
- The total tax take by the Australian federal government is 22%, which is higher than the rest of Asian competitors and the U.S. (average of 16%).
- From 2000-2004 housing prices were up 100%, and household debt is now 160% of disposable income. Australia is taking some measures to address these matters. It recently enacted a $17 billion cut in personal income taxes over three years, and the independent central bank is raising rates. The leadership has also introduced a package of "radical" labor reforms, which if enacted would also be a big plus. The aim is to give employers more flexibility and to bring labor negotiations down to the local level. The measures would increase probationary period for new employees from three to six months, exempt businesses with less than 100 employees from unfair dismissal laws, and favor individual contracts over collective bargaining. All of these measures will be fought by the
Labor Party and trade unions. While much is made of Australia's dependence on China and commodity exports, the Australian economy is well diversified, with 5% of gross domestic product attributed to mining, 5% to tourism and 80% to services. It also has the third-largest stock market in the region and a leading regional financial center. Taking Profits After looking closely at the situation, I have decided to keep Australia in our portfolio, but will take some profits by halving our position. Here is my reasoning: - The decline in housing prices has been incremental and has therefore not affected banking, consumer and construction stocks as expected.
- International fund managers are underweight on Australia.
- The market is not especially expensive. The 12-month forward price-to earnings ratio is about 15, in line with the average over the past three years and below a high of 18. But keep in mind that this low multiple is based on forward and aggressive forecasts of corporate profits.
- Average dividend yield for Australian stocks is around 5%. One company to keep an eye on is BHP Billiton (NYSE: BBL), the world's biggest mining group, which reported an 85% rise in net profit, compared with a year ago, to $6.5 billion for the year ended June 30, 2005. The Anglo-Australian firm set a new Australian corporate profit record, and after being up sharply in 2003 and 2004, it has confounded skeptics by going up 26% so far this year. The company's good fortune, like that of other mining concerns, comes from rising demand in China. Another great Australian mining company is Rio Tinto (NYSE: RTP), which has a lower valuation because it doesn't have oil and gas operations, which contribute about 30% of BHP's total revenue. Last Bit of Advice The center of gravity for the world's economy is shifting to the Asia-Pacific region, and Australia is in the sweet spot. Keep an eye on housing prices and corporate profit performance, but for now keep some exposure to Australia in your global portfolio.
For more information go to www.chartwellasia.com or call 877-221-1496
About the Author
Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of the Chartwell Advisor and the Asia Investor Intelligence newsletters. He served on the executive board of the Asian Development Bank and is the author of The New Global Investor. For more information go to http://www.chartwellasia.com or call 877-221-1496
|
|
|
|
|
|
 |
Sudan and South Sudan to resume negotiationsChristian Science MonitorAfter weeks of fighting, in which South Sudan took out one of Sudan's last remaining oil fields, the two countries are returning to the negotiation table, under African Union mediation. By Scott Baldauf, Staff writer / May 25, 2012 After a series of ...and more » |
|
Negotiation is not a solution in itselfMontreal Gazette“Negotiation” – almost everybody in Quebec still seems to believe in its magical powers to solve the current protest crisis, even after it's already failed once. Three-quarters of Quebecers in a recent poll by Léger Marketing for Québecor-owned media ...and more » |
|
