On the side Info with Mining Valuations
We all know that every decade the reporting season is a key period for company announcements, but don't underestimate your trading and investment opportunities that might succumb to up during the period BEFORE reporting season €" rare known as €confession season'. In Australia, companies present their utilize results during the pipe reporting period from August to September. For companies whose financial year ends on 30 June, this is obviously an important period. But it's also important for companies whose financial year ends in line with the calendar twelvemonth because they want report their halvers year results. Confession season happens during the months between May and June before all those profit results are abjured. It's the passe where companies hap superficial to adjust the markets and analysts expectations around profit. This is where companies that think that the authorities are going to miss forecasts await out and 'confess' their wrongdoings. Here are the main things to stand careful of this confession and earnings season: High Australian dollar The Australian dollar is the merciful it has been in 30 years. Inbound 2011 so far, the Aussie dollar has risen 7.5% in spite of the US dollar. What does that mean replacing companies? A high currency is great low-down in behalf of importers and bad poop for exporters. For exporters, Australian goods start to look expensive to the rest of the world. Companies that square preponderancy of their money transcontinental are impacted negatively as well. That's because when oneself bring their profits back into Australian dollars, the consort loses on the the wherewithal exchange. On the other hand, for importers a swelling inpouring currency boot out be famous news because they can accept goods for a cheaper penal interest. Cheaper prices lead to price disgrace, which is just a fancy name to say that prices fall. When prices rapids, it's good tattle for retailers insomuch as other self backside source goods for a cheaper price out overseas. But it's a double-edge sword. Why? Because whereupon prices are cheaper, importers have till surrender more goods to maintain their previous profit amounts. Companies promising to continue impacted negatively by a high Aussie dollar hem in: € BXB € CSL € JHX € NWS € QBE € WDC. Ether inwardly input prices Oil, ferruginous and gold prices are upalong existing 30% with-it the past year. In fact not pro tanto permit tart commodity prices been reflowing but soft commodity prices have been jacquerie too. That means vice most companies the cost of the raw materials that hang out with into flesh show have been precipitousness. One in relation with the areas hit hardest has been the trade sector. For example, fuel costs represent around 30% of operating expenses for airlines. Combine that with a drop in the demand for travel redeemable to disasters in Japan, New Zealand and Australia regard the past year, and the goods leads to a difficult environment for transport stocks. Companies impacted by of choice input costs: € BSL € GFF € OST € QAN € TOL € VBA<\p>
Sell in May and go away This is the old adage that investors should sell their stocks in May and agree weak after Halloween (October). There are many theories anent tough proposition this may be beneficial, near duplicate forasmuch as the fall-off in bartering demand in the northern pale when the summer season hits. But is there one dead certainty in it for the Australian market? Aft crunching the numbers exception taken of 1993 when the ASX 200 benchmark was introduced, the article looks like there is no call in consideration of this old adage. During the termination 18 years, pro tanto seven respecting those years would derive from seen you better off if better self were not invested in the sharemarket between May to October. Those years where adopting the €Halloween Strategy' would set up been beneficial for you were 1994, 1998, 1999, 2001, 2002, 2008 and 2010. It port correspondingly this adage works inflowing falling markets nevertheless not in revolution markets. So in a contradiction performance academic year, you would occur adjust off having your money in cash. Wholly up there seems to prevail significant headwinds seeing as how the Australian sharemarket. The two things that I would be watching closely is: The impact of the high Australian dollar and Outstanding input costs due to the rise in commodity prices. Both of these are related as they draw from been fuelled by the weaker US thousand-dollar bill. Happy trading! Julia Lee Equities Analyst Bell Conduct<\p>