Over the quarter ending 30 September 2014 the ASX 200
Accumulation index fell by -0.60%.
ASZ 200 Accumulation Index
Overall the August corporate reporting season was broadly
positive, with few disappointments. The ASX 200 delivered earnings
growth of around 10% (6% industrials, 30% resources). Analysts on
average expect earnings growth to accelerate in FY15, with
industrials expected to rise by 8%, resources by 17% and property
trusts by 5%. Assuming these estimates are delivered, the ASX 200
Price to Earnings multiple for FY15 is currently just under the
longer term average, implying that the market is neither cheap nor
Nevertheless, in the short term we expect further volatility
given the conflicting economic forces at play. On the one hand, the
economy retains sufficient underlying momentum for earnings to
continue to improve across sectors exposed to consumer spending,
housing, and services. On the other hand, uncertainty surrounding
China's growth trajectory is likely to continue to weigh on the
mining sector. In addition, the RBA's concern about the debt
fuelled housing boom and the possibility of imposing
macro-prudential controls (whether they be in the form of stricter
capital requirements on banks or lower loan to valuation ratios)
may further diminish support for the banking sector. Collectively
the market capitalisation of the banking and mining sectors account
for a significant proportion of the index and so will have a major
bearing on the short term direction of the sharemarket.
Given the divergent economic outlook, elevated geopolitical
risks and uncompelling valuations, we recommend investors err on
the side of caution and maintain a slight underweight allocation to
An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
CIVs will have flow-through status for tax purposes and similar criteria as the MITs, to encourage foreign investment.
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