Tag Archive | Australia

Two Coal ETFs Impacted By Australian Floods

Australia is currently witnessing the worst flooding that it has seen in over thirty years, causing many open pit coal mines and railway links to submerge having a major impact on coal supply.

The excessive rainfall and flooding has resulted in the closures of many of Australia’s businesses, with the most recent announcement of New Hope, the Sydney-listed thermal coal miner, announcing that it was suspending operations.  In fact, the floods have influenced the operations of more than 40 coal mines throughout the nation and could impact more if Mother Nature doesn’t let up and the rainfall spreads to other parts of the country. 

This inclimate weather is of such importance because Australia is the world’s largest exporter of coking coal, accounting for nearly one-third of global supply, which is a major component in steelmaking as well as the world’s second largest in thermal coal which is used in operating power plants for generation of electricity.   According to Australia & New Zealand Bank, coal production in Queensland represents more than 40 percent of the world’s metallurgical coal exports and 8 percent of the world’s thermal coal exports, which is one of the hardest hit parts of Australia and is practically underwater. Read More…

Four ETFs Supported By Copper’s Supply Woes

The price of copper has witnessed positive support over the last few months and imbalances in supply and demand of the base metal are expected to provide further support to prices in the near future, enabling the iPath Dow Jones Copper Index ETN (JJC), the PowerShares DB Base Metals (DBB), the iShares MSCI Chile Index (ECH) and the iShares MSCI Australia Index (EWA) to reap the benefits. Read More…

5 ETFs To Play Australia

Over the last century, Australia has outperformed its counterparties in the developed world, while offering one of the lowest volatilities to investors. As for the future, the Land Down Under is expected to continue its growth, providing returns and the path to opportunity for some. 

A major reason that the future remains prosperous for Australia is due to its close ties with Asia.  According to the International Monetary Fund (IMF), exports to China and India have been growing at a rate of 18%-19% per year and are expected to continue to grow.  As China and India continue to emerge as global economic powerhouses, Australia will likely continue to reap the benefits.  In fact, Asia as a region is expected to witness economic growth of nearly 50 percent over the next five years and account for more than a third of total global output.  Read More…

3 Reasons Australian ETFs Could Shine

Historically speaking, over the last century, Australia’s stock market has outperformed all others and has offered the one of the lowest volatilities amongst all of its peers.  As for the future, there are three forces that could enable the nation down under to continue to shine. 

According to a study conducted by Credit Suisse, during the period of 1900 to 2009, Australia’s markets posted 7.5% after inflation returns per year while witnessing a standard deviation of 18.2%, the highest returns and the second lowest volatility of the 19 major, mostly-developed markets studied.  In comparison, during the same time period, the U.S. stock market made a 6.2% return with a standard deviation of 20.4%.  What this demonstrates is that investors would have made more money and taken less risk by investing in Australian markets. 

One force that could enable Australia to remain prosperous is its close ties to Asia, states Howard Gold of Market Watch.  Half of Australia’s exports go to Asia, with China being its largest trading partner.  With economic growth prospects in Asia, in particularly China, remaining relatively healthy for the next 10 years, Australia is set to reap the benefits. Read More…

How To Play The Diamond Market

By Kevin Grewal

As the global economy recovers and the middle class widens in developing nations, the outlook for the diamond sector is likely to be promising.

The rough diamond market has already starting to rebound and prices are close to levels seen before the global financial meltdown which forced demand for diamonds and jewelry to dwindle dramatically down.  In fact, some analysts and diamond experts suggest that valuations of diamond stocks appear to be relatively cheap.

Another factor that is likely to benefit the diamond markets includes an increased willingness of investors to provide financing to diamond mining and exploration companies.   Additionally, an expected rebound in consumer spending will likely result in increased demand for jewelry and bolster revenues for diamond producers.    Most notably, demand is likely to increase in nations like China, India and Brazil as incomes start to increase and consumers demand the finer things in life. Read More…

Australia Expected to Continue To Shine

Australia was the only major economy to avoid a technical recession in 2009 and was the first G-20 nation to tighten interest rates since the beginning of the financial crisis, which are two reasons the nation down under is expected to shine in the coming year.

A massive government stimulus plan, which included billions of dollars in cash handouts to low and middle income earners boosted private consumption and business investment, which has further bolstered increases in consumer confidence, housing construction and public infrastructure spending.  These three efforts are expected to keep Australia’s economy in growth mode. Read More…

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