Saturday, September 26, 2009

ASIC-Lame on Insider Trading (IT)

I read with great humour the front page article of the AFR a few weeks ago about ASIC investigations into Insider Trading at KPMG-Notably Adam Wilson and Ben Ingham. Both these gentlemen worked with me at KPMG Corporate Finance. I was shocked when Mordant and Hunt at Caliburn employed Wilson. He is a joke and in my experience, he would cross the fine line without thinking about it. Ben Ingham- I am surprised by his alleged involvement and would not think he would have deliberately broken the law.

Regardless, this is the tip of the iceberg as Audit Firm Corporate Finance teams trade information for leads with audit partners, breaching totally, price sensitive information rules and established Chinese Wall protocols. Audit based Accounting firms should not be given Corporate Finance Licenses. ASIC knows it, and this token investigation is a pretty poor attempt at window dressing a problem that is a cancer. The Business Community knows it and this is the reason why Audit Firm Based Corporate Finance teams get little in the way of on-market transaction activity.

ASIC brings our market into disrepute internationally and increases the costs of capital to our companies if it does not try and eradicate this tumour!

Sunday, July 12, 2009

Renewables Starts at Home

With Energy Companies now providing for 100% Renewable retail electricity options, the move to renewable energy can be consumer driven and not necessarily investment or government driven. At 6.6c per KWH or there abouts, a premium for renewable energy is the consumers way of supporting investment in this sector which will lead to prices coming down over the next ten years. By 2020, Renewable Energy will be cheaper than traditional electricity sources for all!

Why not offset the premium with solar domestic, home based options that enable excess generation to be churned back into the grid leading to credits to offset retail electricity charges.

With government support for capital spent by consumers on solar based home options, a payback period for a large family can be as low as 4 years. Short term steps that have short term costs and long term benefits for future generations. Consumers can show their support of global policy alternatives to fossil fuels. The move to renewables starts at home.

Thursday, July 9, 2009

Investment Units the long term preference

Unemployment, first-home buyers grant, stock shortages and low new building approvals (due to financing constraints) are conspiring to make investment in units and apartments a growth sector. Lower maintenance, rising rental demand, lower capital levels required for investment entry and immigration from countries whose living habits are accommodated in apartment living are all driving interest in the sector as capital and rental yields improve.

Liquidity concerns and stamp duties makes the investment class a medium and long term play. Given the market cycle, socio-economic trends and taxation treatment, investment in apartments in the right suburbs is definitely back on the agenda for many.

Friday, July 3, 2009

Sydney Property Market set for FY10 Growth

Undoubtedly key markets in Sydney will see property values increase in the next financial year. The key question for SME business owners is " will the banks lend for expansion capital against these higher equity levels offered up as security in property based/backed business lending?"

The banks who are working hard to try and win market share in the retail customer base, may need to loosen credit policy or return to pre 2008 policies to sure up SME business in the face of competition. But will there be lending competition and will foreign institutions provide key competition driving a business investment led recovery?

Are domestic conditions and priorities for foreign based institutions returning where they can provide capital and competition in Australia?

Is there a financial institution who can do for home buyers what John Symond and Aussie did in the 90's? There is market share to be had for some visionary institution as property prices rise based on Government first buyer stimulus and the up-curve value effect in Sydney property markets.