Wednesday, July 29, 2015

Quote of the Day

A Nick Dalton classic:

Chamber chief executive Deb Hancock said expansion of the port over time would provide for “sustainable development to growth and prosperity of the region, in pace with the market’s growth”.

Who even among those who claim to understand what she has said  could possibly disagree?

Monday, July 27, 2015

Aquis: the timeline titans

Have been quiet recently on the Friendly Fung Family (FFF) and Aquis. So after some recent distractions updated today developments re the backdoor listing on ASX of the Aquis empire and amazing investment opportunity offered by this investment.

My previous post noted that Aquis seemed to have a problem with timelines: Aquis Entertainment lost in Canberra fog?

I must update this in detail. Aquis have since splurged on a high profile sponsorship of the NRL Gold Coast Titans. Thousands of billionaires have been queueing up to back this sponsorship but were seriously disappointed when they were beaten to it by the FFF.

Never minds the chart looks fantastic:

However. DIS (aka Aquis Entertainment) remains suspended today. A replacement prospectus for the capital raising was lodged last week. This expired Friday. DIS lodged notice of extension only today. There were reasons which will be referred to the video referee at Loose Change.
Given that DIS last closed at 19c after languishing well below that and the capital raising is at 20c one can only presume that Aquis Entertainment has not been knocked over in the rush or it would have been quickly closed? 
Who knows? When it comes to repetitive underperformance on their own timelines, Aquis make their Gold Coast Titans look like premiers!

NT - The Joke State

Predictably, the Northern Australia white paper hype has seen another push for the NT to become a state by 2018. Bob Gosford nails this on his Northern Myth blog at Crikey: Joe Hockey was right – Adam Giles’ push for NT Statehood is a joke
Just in case you might believe this tosh the NT will NOT be getting Statehood by 2018 or anytime soon after. 

Gosford has previously noted:
As [Nicolas] Rothwell notes, the tax-payers of the Australian south-east fork out around $4 billion a year to keep the NT running. Divide that number by the 220,000 people in the NT—-about the population of your local shire council but without the productivity and contribution to GDP—-and the figure is around $18,000 per head.

At least they will have a catchy vehicle number plate slogan all ready to go.

Thursday, July 23, 2015

Adventure Festival boosts Airport

Passenger numbers grew strongly in June with domestic up 6.3% and international up 16% on the previous year. The airport attributed this to a later date for the Adventure Festival with participants arriving in June whereas arrivals the previous year started in May.

School holidays also started a few days earlier and the domestic growth figure also comes off the back of a rare negative growth month in June 2014. The big international growth number while encouraging also needs to be kept in perspective following the slump throughout 1H 2014.

The good domestic growth doesn't reverse my cynicism about the most recent HTW domestic trend growth of 8.2% with only a single monthly number above that or even close since January 2014, although this trend hasn't been updated since their April report.
Elsewhere both Sydney and Auckland airports reported positive international trends in June. Auckland was particularly impressive with international growth in June of 7.2% driven by China and the USA. Their Queenstown Airport numbers are also growing very strongly.

Tuesday, July 21, 2015

The regional rental gap

A few media reports lately on rental trends from property research houses but can't see why the quarterly data from the RTA based on actual new bonds lodged isn't the best data. The June quarterly data for the NQ cities shows a very different story for each over recent years:

In the three largest rental categories Cairns has opened up a significant gap over its southern neighbours in all as a relatively expensive place for rental housing.

Meanwhile, the real estate perma-bears at Macrobusiness have an interesting analysis and warning on the previously high flying Darwin market as the $34 billion Ichthys LNG Project approaches completion: Sell Darwin housing now! ($)
Look out below!

Sunday, July 12, 2015

Queensland's debt: financial engineering or transparent financial reporting?

If you hadn't noticed local Treasurer Curtiss Pitt has been leaking like a dunny with a faulty faucet ahead of his first budget. The big debate there is now the transfer of debt from the general gummint sector to the GOC's (government owned corporations).

Gene Tunny has been highly critical of this: Accounting trick wouldn’t improve Qld Government’s real financial position

Gene is absolutely correct on that. It does nothing for the overall financial position or interest payments. This has been wrongly reported by some media. It has though also been a 'source of funds' for previous administrations of both colours.

We could go back to basic Miller Modigliani economic theory. The value of a firm doesn't depend on how it is sliced. I recall an interview with Merton Miller. I cant find a link but it went like this:

Q: Can you explain your theory simply.
A: Yogi Berra was asked how he wanted his pizza cut, in quarters or eighths. He said cut it in eighths he was hungry today.
Q: You won a Nobel Prize for that?
A: We proved it rigorously.

There is some value IMHO in distinguishing between different types of government debt. Curtis has said that these GOC's would run with that level of debt in the private sector. Maybe so but is that appropriate? Should the public sector be taking the same risk as a private choice in the private sector?

There is a political issue beyond either the private or economic. During the last election I queried the local Greens candidate on why they were opposed to asset sales of coal power stations when they didn't actually see these as assets anyway. I think the response was that they were opposed because that would make the "assets" easier to shut down ..... in which case they are not "assets" at all.

Sunday, July 5, 2015

Pledging allegiance to Team Rupert

Opinion contributions this week from our newsroom elite:

"Green groups are also citing ocean acidification caused by carbon emissions as a threat to the Reef, but some scientists say just one volcano can spew out more CO2 in a day than mankind has in 250 years." - Cairns Post deputy editor Julian Tomlinson

"This week's unfolding Greek financial tragedy should be a cautionary tale for Queenslanders that relying on growth to fix government debt is a reckless response" - Courier Mail state political editor Steven Wardill

Would any further comment or discussion to refute either of these misguided (or even just arse-about wrong) statements be superfluous? Why bother to waste time poring through such as science or economic journals, or even recent IMF reports, to provide informed discussion and links to creditable sources when one can just go straight to the knowledge bank at Team Rupert?

A deeper understanding of the Euro crisis as Greece v Germany is provided from Monty Python: