As most investors will be aware, the Commonwealth Bank of Australia (ASX:CBA) is currently under investigation from AUSTRAC for failing to adequately report cash deposits of over $10,000 to the authorities. They have allegedly breached this 53,000 times with a maximum penalty of $18m per breach. As a result, financial professionals have been answering a lot of phone calls from retirees and investors concerned about the financial position of the company.Details
Arguably since the formation of the Euro Monetary Zone, there has never been such a high threat to its survival as exists today. As the world has seen with the election of President Trump and Brexit, populism is gaining wider political support amongst Western democracies. In 2017 and beyond, this populist movement could have wide ramifications for European Union residents and also for the Farnam International Opportunities Portfolio.Details
Without a doubt, JB Hi-Fi is the beacon of Australian bricks and mortar retail. While other companies find themselves struggling in a low wage growth, low consumer spending environment, JB Hi-Fi has consistently managed to shake off those concerns and post tremendous growth and returns to shareholders.
That said, a recent article in the Australian Financial Review highlighted the on-coming threat presented by Amazon, the all-encompassing retail/technology giant from Seattle. While no official date has been set, Amazon has confirmed their intentions to begin to sell directly to Australian consumers through their website, and already offers their video streaming service ‘Amazon Prime’ to Australians.Details
In today’s ageing environment where super funds are collectively an enormous participant in the stock market, the hunt for yield can be unrelenting. Dividend stocks are highly sought after because they offer a consistent revenue stream of cash that is generally higher than both bonds and term deposits.
Compounding this desire is the availability of franking credits, whereby investors will receive a refund of the tax that has already been paid on the earnings related to the dividend. This is a unique tax law found only in Australia and a few other nations, but it increases the attractiveness of dividends as this tax refund effectively increases the yield of the dividend.Details
My colleague Luke Durbin recently wrote a great blog post on how a DIY investor can search for investment ideas on the ASX. It makes a lot of sense for an Australian investor to focus on ASX listed equities (particularly if their time or effort is limited) given that we have much better visibility and exposure to these Australian companies. Because of this we often can understand a company better, how they operate, what their market is and what their growth prospects are.Details
The ASX is currently undertaking a public consultation for feedback on a proposal to place stricter regulations on small companies trying to list on the ASX, particularly those with little or no revenue. While the changes aren’t significant, it creates an interesting debate around what the role of the ASX should be between companies seeking capital, and the investing public willing to provide it.Details
For the last few years the government-owned NBN Co has been busily building and selling their national broadband network (NBN) that is expected to bring Australia up to world internet standards. Whether or not this is accurate is not the point of this article, but to ask the question does the existence of a government controlled entity in a monopolistic position undermine the free market element of its economy?Details
As I’m sure you’ve heard by now, Pokémon Go – the new Augmented Reality app created by Niantic – has been taking over our world through smartphones. A few of us here at Farnam have tried it out and we have been discussing the effects it is having on businesses and industries around the world.Details
Recently on the blog we looked at the 2016 financial year IPOs that performed well and those that did not. When a new stock does well it is usually very easy to see the reasons why. Among other things, the reasons generally relate to a clear upward trajectory of earnings, a strong balance sheet, and minimal fluff from manegement. However, in amongst the prospectus, selective language, and colourful, upward trending graphs, it can often be more difficult to predict the losers before they happen. Using hindsight though, we can point to certain similarities that could help investors avoid these in the future.Details
With the end of the financial year approaching I decided to have a look back at all the new companies that listed on the ASX last year. By my count there were 111 new floats on the ASX so far this year (not including backdoor listings and including re-listings and demergers). So let’s have a quick look at some of the best and worst offerings and discuss potential strategies for the next financial year.Details