Aussies embrace financial stocks

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Reserve Bank Bulletin The Reserve Bank Bulletin released yesterday has provided a breakdown of the ownership of Aussie equities. The portfolio allocations between households and institutional investors differ significantly. Mum and Dad investors hold 65 per cent of their portfolio in financial stocks – more than double the portfolio allocation of institutional investors. The large […]

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Powerhouse mining sector

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Quarterly Labour force data; RBA Speech; Imports In percentage terms, employment in the mining sector expanded rapidly over the past year. In the year to August, mining sector employment grew by 33,000 workers or 20 per cent, significantly outperforming other sectors. Over the three months to August, employment across Australia grew by 78,500 or 0.7 […]

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Are shares good value & what about bank deposits?

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Key points Shares are cheap using forward price to earnings ratios and when comparing the level of the dividend yield to the bond yield. Thanks to low government bond yields and higher dividend yields, shares should provide a good risk premium over bonds for the decade ahead. While Australian bank deposit rates are attractive for […]

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Consumers display caution

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Dwelling starts at six-year Consumer sentiment; New car sales; Dwelling starts The Westpac/Melbourne Institute index of consumer confidence eased in the latest month. The index fell by 5.0 per cent to a three-month low of 113.2 in September. Aussie consumers believe that bank deposits are the wisest place for savings (30.7 per cent of respondents), […]

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Businesses hopeful; Farmers rejoice; Cash is still king

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NAB business survey; ABARE Crop Report; Consumer finances Business confidence is up; conditions are down. According to the NAB business survey, the business confidence index rose from +2.4 in July to +11.2 in August. The business conditions index fell from +5.3 in July to +4.5 in August – the fourth decline in five months. Retail […]

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More joy for motorists; Construction loans slump

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Lending finance; Petrol price; Credit/debit cards The Australian Institute of Petroleum reports that the average Australian petrol price fell by 2.2 cents last week. Over the past fortnight prices have fallen by 4.9 cents a litre – the biggest fortnightly fall in 21 months. The national pump price is now holding at a near 11-month […]

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Aussie tourism in trouble

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Regional economy Australia’s tourism sector was already in trouble, but it is now set to come under even more pressure from renewed strength of the Aussie dollar. The Australian dollar rose to near 21-year highs against the Euro this morning while also lifting above US93 cents. The tourism deficit (excess of departures over arrivals) is […]

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Chinese economy powers along

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Chinese economic data The Chinese economy strengthened in August. Production, retail trade, inflation and money supply all grew at a stronger annual rate in August suggesting that authorities will need to lift rates to slow the economy. Industrial production rose at a 13.9 per cent annual rate in August with retail spending up 18.4 per […]

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China engineers a soft landing

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Chinese economic data; Mobile phone sales Chinese trade surplus eases as imports surge. China recorded a trade surplus of US$20.03 billion in August – below forecasts centred on a result near US$26.9 billion. Exports were up 34.4 per cent on a year ago (consensus +35.0 per cent) and imports were up 35.2 per cent (consensus […]

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Weekly market & economic update 10 September 2010

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Headline developments of the past week US President Obama announced plans for another round of fiscal stimulus including increased infrastructure spending, accelerated tax write-offs for new investment that would allow companies to write off all new investment undertaken before the end of 2011 and an extension of the Bush tax cuts for those earning less […]

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