Implications Of Proposed Media Reforms

The mulling over what to do with the fractious media has reached a pivot point in political circles with the Commonwealth Government’s reform package to front parliament in the next two weeks. While there is a fair amount of water to go under the bridge beforehand, media analysts have scrutinised the proposals for the likely impact on key stocks, should the reforms get up. Citi finds that, if they go ahead, the reforms are only minor regarding the status quo but represent implication for the sustainability of traditional media companies in the medium term.

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QRxPharma Poised For Pain Relief

Biotech QRxPharma ((QRX)) has sparked speculative interest this year, given the potential for a positive review of a New Drug Application with the US Food and Drug Administration. Brokers are keenly aware that a go-ahead from the US authority for the MoxDuo IR oxycodone-morphine combination could be a game changer for the stock.

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Amcor Packages A Good Story

Packaging major Amcor (AMC) has been on the receiving end of a variety of responses to its half year result. There have been two downgrades and one upgrade on the FNArena database. JP Morgan has downgraded its recommendation to Sell from Hold, Citi has downgraded to Hold from Buy while Credit Suisse has upgraded to Buy from Sell. What’s going on?

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Royal Wolf Whistles Up A Buy Rating

Royal Wolf ((RWH)), a provider of portable containers with a curious name, has received a Buy recommendation with the initiation of coverage by Deutsche Bank. This broker joins two others already on the FNArena database. Key to the company’s attraction is the spread of its exposure to a number of industries. It has managed to grow earnings over the last two years despite the soft Australian economy.

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Oz Businesses Exhibit Record Gloom

Australian businesses are gloomy. According to the latest quarterly Dunn & Bradstreet survey, the nascent optimism present in the December quarter with regard to the March quarter outlook has petered out. In fact, 68 per cent of businesses that were surveyed this quarter are concerned that cash flow will be an issue for the June quarter. Furthermore, 28% of surveyed businesses see outstanding accounts receivable as affecting cash flow, and therefore an impediment to growth. However, only 6% are intending to seek finance or credit to grow, revealing business is as cautious as its consumer counterpart.

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Tax Issues Fog Sydney Airport

Sydney Airport ((SYD)) is unlikely to find clear air until its tax issues are resolved. According to CIMB this will overhang the stock in FY13 even though the outlook for traffic growth is solid. CIMB estimates the worst case scenario could cost the company up to 7c per share in annual cash flow. Other than that, forecasts are holding up and CIMB has kept a Hold rating with a price target of $3.47.

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Treasury Wine Estates Goes For Premium

After a company presentation brokers were quite bubbly on Treasury Wine Estates ((TWE)). The part of the business that intrigues them is Penfolds, the originator of the famous ‘Grange’ tipple. Penfolds falls into the luxury wine category, which TWE is intent on expanding. TWE management has noted the majority of grape price volatility, historically, has been in commodity, commercial and lower-end wine products. Luxury wine grape prices have been far more stable due to the excess demand for these products in the market.

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Which Miners? Which Commodities?

The past decade marked a mining resurgence but will it continue? Are the boom times over? This was the question posed at a recent forum organised by BlackRock Investment Institute and the participants – BlackRock portfolio managers, six industry executives and two experts from research firm Wood Mackenzie – suggest investors need to delve a bit deeper to gauge whether a miner of the glorious past can still perform.

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Material Matters: Coal, Base And Precious Metals

A high Australian dollar, a drop in prices, delays in government approvals, a lack of funding options – it’s not a good look for coal, according to Credit Suisse. The broker has re-visited its valuations of the Australian coal sector and cut its outlook for both metallurgical and thermal coal, although the latter’s revisions are more minor. Credit Suisse describes metallurgical coal’s short-term fundamentals as ‘torrid’ and sees only a modest recovery in prices for this coal – perhaps back towards USD190/t by 2015. The broker has cut its price forecasts for metallurgical/coking coal prices by an average 17% in 2013 and 10% in 2014. Others are not so severe. Goldman Sachs still ranks coal amongst its top tier of commodities for equity investment purposes and sees prices recovering going into 2013. The broker expects the production cuts currently in train will be supportive of prices down the track.

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Australian Fund Managers Turn Bullish

According to the latest Russell Investments quarterly survey of Australian investment managers, we should expect a sustainable turnaround in the Australian share market within 12 months. From a sample set of 40 fund managers, Russell found 77% expect the local market to turn around by end-2013 and 63% expect this occur by end-FY13. The survey was conducted last month and we note that the ASX 200 has now broken up through stiff one-year resistance in a steady rally which began in June. The emphasis here is thus on the word "sustainable".

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