Monday, 24 August 2015 09:59

China's Property Market - is it about to crash?

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We recently met with Andrew Clifford (Chief Investment Officer - Platinum Asset Management) and asked him whether he thinks the Chinese property market is about to crash.

Andrew puts perspective on the Chinese property market in the video below.  A full transcript follows.

















China’s Property Market, Is It About To Crash? Transcript

Mark Draper: Andrew, a lot of talk in Australian media at the moment about the Chinese Property Market which is important to Australia as a flow on and domino effect. Are we about to see a Chinese Property Market crash or where is the property market at there?

Andrew Clifford : Yeah, we’re not so concerned about the residential market in China. There are a few things we’d look at. Certainly there’s always a talk about the Ghost Cities and some of those certainly do exist but if you look at the broader context, there are reasons to be not so negative. Let’s say. So lets look at some of the numbers. So since we started private ownership of property commenced in 1999 in China, we’ve probably built about the order of one hundred million apartments since then. So if you think about it that, that represents the entire modern housing stock of China. So that leads a few hundred million households still living in communist housing, not that pleasant perhaps. Now maybe a question about affordability is indeed very significant latent demand for residential property and we expect that to be a significant part of this economy for some time to come. In terms of prices whether they’re too high or not, one of the things we’d look at is the development of the secondary market in property and in the big cities now as much as 40% of the turnover on property is the secondary market where you have individual owner selling to an individual buyer. And interestingly we’ve got a market here where there is millions of apartments turning over and prices are only down by a few percent from the highs, eighteen months ago.

Mark Draper: And the activity is actually trending up in tier one or tier two cities.

Andrew Clifford: So indeed, so when we look at the inventories and unsold inventories they’re not really that significant and those cities now, they’re going to be with the ghost cities, they’re going to tier three and four cities. Population growth is muted whereas in the big cities populations are growing at 3 or 4 percent so really again this underpins the demand here. I think also in terms of, you know, lets look at how big this market was and you know people get afraid because the numbers are big so we would probably at the peak building twelve million apartments but again what I would tell you is on a population adjusted basis is not very different to what we’re building in Australia today.

Mark Draper: Right.

Andrew Clifford: Perhaps that tells you more about Australia than China but the thing is that ,again, look there will be developers who will go bust because they’ve got bad developments there will be bad loans coming out of the industry but we don’t think it is a completely dire situation as it gets painted often in the paper.

Mark Draper: Thank you very much for your insights, Andrew. That’s really good information.

Andrew Clifford: Thank you.

Friday, 21 August 2015 00:35

$AUD - Lower for longer

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We recently met with Andrew Clifford (Chief Investment Officer - Platinum Asset Management) to ask him where he believes the $AUD is heading in the medium term.


Following the video is a transcript of the conversation.
















Mark Draper: Andrew, Aussie Dollar 74 cents, where do you think it’s going on a three to five year view?

Andrew Clifford: So we certainly think that, I guess it has become a fairly consensus view that the Australian Dollar can go a lot lower and we genuinely think that remains the case and it really just comes down to competitiveness that when we look particularly at labour cost it costs the range of industries, Australia just isn’t competitive now particularly with other develop markets, developed economies like Japan, Europe or the US. So we really think there is a lot more room for it to go lower. What I would caution though is that there are some positives remain, we are still one of the few developed economies which hasn’t seen our central bank print money with responds to housing or banking crisis so that is in our favour and it is the very fact that I said there are now many people who want to predict that the currency is going a lot lower would tend to make one cautious whenever you see that as investors we are all getting into the one position. So I suspect that at some point here we will actually shorter term not that such predictions are worth that much but I think that there is a real chance that the Aussie Dollar will go significantly higher before we actually see a further depreciation and what might cause that? I think simply any set of events that make people less concerned about, the prospects in China that the place will not have a very nasty or depression like term and it actually will come true this safely or indeed any sense that your representing a bit of this position. That general view of global growth I think will make people more comfortable owning the Australian Dollar in a short term since.

Mark Draper: And a medium term sense still comfortable ...

Andrew Clifford: And certainly we think Australian investors, while they have a little more exposure to off shore markets today then they have had, we still think that there’s are many people sitting there going oh well the Aussie Dollar’s already fallen a long way, that’s probably over and what we would think is on a medium to longer term, there is some way to go.

Mark Draper: Andrew, thanks for your thoughts. Much appreciated.

Andrew Clifford: Yeah, thank you.



Tuesday, 28 July 2015 13:30

Understanding the Chinese Sharemarket in Charts

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With the surge in volatility in the Chinese share market - we have sourced a collection of charts that puts the Chinese share market into perspective.





















































































The Chinese share market trading is dominated by retail investors, which is the opposite of Western markets, where institutions dominate trading.




































Monday, 29 June 2015 07:10

Age Pension proposals have been legislated

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One of the key messages from the 2015 Federal Budget was the need to rebalance the Assets Test to help make access to government pensions fairer.  to do this, the Government proposed to increase the Assets Test thresholds and the Assets Test taper rate from 1 January 2017.

Increase in the Assets Test thresholds

The first change to the Assets Test relates to the threshold above which a pensioner's entitlement will start to reduce.  Subject to the Income Test, the proposed increase in the Assets Test thresholds from 1 January 2017 will enable approximately 50,000 part-pensioners to qualify for hte full pension under the new rules, according to the Federal Government.

The current and proposed thresholds are as follows:

Example:  Ben is a 67 year old retiree who is single and owns his home.  he has $10,000 in personal effects, $240,000 in an allocated pension that was created several years ago and he is currently drawing the minimum income from that pension.  Based on current ruiles, he is entitled to an Age Pension of $20,943 pa under the Assets Test.  If he was subject to the proposed thresholds today, he would be entitled to the full pension (currently $22,365pa)

In fact, under the proposed changes, several classes of retirees may receive a higher pension entitlement.

Increase in the taper rate

The other main proposal, which will effectivley reverse cahnges to the taper rate introduced in 2007, increases the current taper rate from $1-50 per $1,000 to $3 per $1,000.  this means that the amount of assets a pensioner can have on top o their familiy home and still receive a part pension (Assets Test upper threshold) will be reduced.  An estimate of the new Assets Test upper thresholds can be found in Graph 1.

The Government will ensure that anyone who is affected by the scaling back of the maximum asset threshold will be guaranteed eligibility for Commonwealth Seniors Health Card for those who are above Age Pension age or Health Care Card for those under Age Pension age.  The Governmentn has not provided grandfathering for the actual Assets Test changes, so those with assets above the new Asset Test upper thresholds will lose their part-pensions and become self funded.

It is interesting to note that the higher taper rate affects homeowners more than non-homeowners and is reflected in the larger proportional drop of the Assets Test upper threshold.  For example, the Assets Test upper threshold for a single homeowner reduces by about 32% compared with a single non-homeowner which reduces by 22%.

Althought the new taper rate will affect some more than others, those affected most will be pensioners with assets around the new Assets Test upper thresholds.  The next chart is another way of highlighting the winners and losers from these changes.  The areas highlighted in red show the the asset levels where pensions will be lower, while those areas in green indicate asset levels where the pension increases.

For example, couple homeowners will be affected the most if they have assets of $823,000 on 1 January 2017.  Under the new rules, the couples pension would reduce to zero based on the Assets Test.  Under the current rules, they would be entitled to Age Pension of $14,467pa.  These retirees may need to withdraw more from their retirement capital to maintain their lifestyle.

Assets Test crossover points

The proposed rules will change the Assets Test crossover points.  The crossover point, which assumes all assets are financial assets, highlights where a retiree's pension entitlement changes from being determined by the Income Test to being determined by the Assets Test.  Graph 1 summaries the crossover points based on current and proposed rules, showing a larger change for couple retirees rather than singles.

Ways to reduce assessed assets (other than additional spending)

Those looking to reduce their assessable assets could consider the following options (in conjunction with professional advice):

1. Gifting within the allowable limits

2. Purchasing Funeral Bond

3. Superannuation contributions on behalf of a spouse under Age Pension age.

4. Capital expenditure around the home


This is a complex area and we recommend those impacted by these rule changes seek professional advice well before 1st January 2017.


Monday, 15 June 2015 10:48

Are you investing in a Tyrannosaurus Rex?

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The Montgomery Fund provide some interesting insights into the impact of changing technology when considering investment.


Saturday, 30 May 2015 04:45

Navigating expensive Australian share market

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Transcript from video


Mark Draper: Here with the Roger Montgomery from Montgomery Funds. Roger thank you for joining us.


Roger Montgomery: It is a pleasure mate. Great to be here.


Mark Draper: Share market looks its best, pretty expensive at the moment, certainly no bargains or not many bargains out there. What would your advice be to investors on how they should be thinking about the share market right now?


Roger Montgomery: Well look, it is one man’s opinion. I concerned that if you’re buying today the gains that might be made from a continuation of this chase for yield would ultimately be wiped out. We are now getting to the riskier end, more speculative end for yield so when the United States Federal Reserve first cut rates to zero, people were scratching their heads, wondering what would happen next and historical the whole point of quantitative easing was to get people to stop saving and force them into buying riskier assets so that the wealth effect would take, would have an impact on people’s consumption and what happened is there hasn’t really been that much improvement in consumption but asset prices have gone up, namely, the shares of property, so as the prices started to move up, that dragged in more and more people and that migration turned into a stampede and the last phase is obviously the panic, a fear of missing out, and the very real concern is that what happened is share prices have disengaged from the profit performance of the underline businesses. The top 200 companies, the half year fifteen, their profit, their revenue went up by 0.2% for the half and compared to previous corresponding period and reported profits went down 26% for the ASX200 companies but share prices went up so there has been disengagement. Prices are no longer engaged to or connected to the reality that our economy is doing poorly. Now, there is no relationship between the economic, the economic growth and the share market in any situation. If the stock market goes up, sorry no, if the economy grows faster than trend 50% of the time the market goes well and 50% of the time the market does badly, similarly when the economy does poorly. So there is no relationship there but the economy does drive profits for companies and company profits are falling but because interest rates are so low, share prices have gone up so if the market simply turns its attention to the poor state of the economy and investors who have been chasing yield are simply sated, in other words, it is not because they are selling stocks, they are just no longer buying them because they have bought enough, they feel like they have taken on enough risk and what you might find is that attention turns to the economy and Hilary Clinton steps on a landmine, heaven forbid, you know something weird and leftfield and blackswan happens and that causes people to want to get out of stocks and the whole thing unravels and now we can predict with some confidence the profit of companies, we can predict with less confidence the economic outlook, we can predict with no confidence the sentiment shifts.


Mark Draper: Yes.



Roger Montgomery: and we rely on sentiment and as long as sentiment remains positive, everything will be fine but if sentiment shifts everyone will be in a lot of trouble.



Mark Draper: What is your advice to someone sitting in the living room at home watching this, what would your advice be to them in terms of their share portfolio or their investment portfolio.



Roger Montgomery: So if your time frame is a short time frame and you believe that you’re going to need all the money you have got in the stock market within two years, then I would suggest starting to liquidate the portfolio, believe it or not, and that just means raising some cash. If you are fully invested in the market looking for the most expensive companies or the poorest quality companies in your portfolio and realising some gains on those and now that is sacrilege to financial planning because you do not want to pay tax but I would rather pay some tax than have a carry forward tax loss which seems to be all the rage in Australia, you wait for a tax loss, you wait for a capital loss then you can carry forward that tax loss and that is when you sell. You don’t sell when there is profit. That is not how you should invest. You shouldn’t invest based on tax, so you take your most expensive companies of the table, so to speak and I hate using that expression, and the poorer quality companies. They are the things you might want to think about selling and that doesn’t mean the share market won’t keep going up, it is just like what I said earlier sentiment can shift very quickly and I would rather be six months early than six minutes late.



Mark Draper: Roger that is good advice. Thank you so much for your time and I appreciate your comments.



Roger Montgomery: It is a pleasure.

Thursday, 21 May 2015 21:02

Kerr Neilson - it's all about the price

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Kerr Neilson, Managing Director of Platinum Asset Management, was interviewed by Vincent O’Neill, Director of Private Wealth at Stanford Brown, on 24 April 2015 at the Stanford Brown Quarterly Investor Insight luncheon.

VO: What makes a good investment manager?

KN: You need to have some idea about what you bring to the game. You wouldn’t enter the Olympics without some ‘edge’, and it’s the same in the investing business. You have to define your ‘edge’ to yourself. One ‘edge’ you could bring is that which others find difficult, such as thinking in a contrarian manner. There’s a big problem with investments. Believe it or not, there’s no specific price for any asset. Some good companies are now worth 10 times the amount they got down to in the GFC. They haven’t become 10 times better companies. When you buy and sell in the stockmarket, you need to have a reference point against what other people think. Value can shift around massively. You need to be a contrarian to start looking for gaps. You need a way to distill out the confusion and noise.

VO: And what have you changed or learned over the years?

KN: Like all investors, you initially start looking for a bargain. But now we have the internet, it’s completely transformational. It’s as important as the railways and the automobile. On the one hand, you know what you’d pay for traditional companies, but then you’ve got this ginormous event which opens up the world to everyone. A company can be so much more valuable even though it started in a garage in Sydney. The value proposition is difficult to understand. With these changes, you need to change your own approach, at least at the margin.

VO: And you need a recognition that some are speculative.

KN: You need a high upside to justify the uncertainty and you need peripheral vision. A problem analysts have is that they spend a lot of time on a company, and they feel they need to be rewarded for that time. They still want to buy it, but you can’t do that if you’re running money.

VO: In what conditions does Platinum underperform?

KN: The times we are least effective are the times like the last six years, where there is little dispersion of valuations, and huge trending. The herd is going in one direction. The one market you had to be in was the US, and we have been progressively moving out of it.

VO: Does that make it difficult for you, as people question your stance?

KN: You need to build a team slowly over a long period of time because you have to think differently. To keep people of that nature is not easy, it’s a certain type of mentality.

VO: You’re a keen student of history. Can you share some of the key lessons from the past, including any insights for the current conditions of extreme monetary policy.

KN: You don’t need to be an historian, just start with the human condition. We are all slaves to our frailties, and we have little ability to suppress those animal instincts: fear, greed, jealousy, all these weaknesses we have. When you read the literature of the 1930’s, we had all this discussion about when to tighten monetary policy, and then you had some very volatile markets. So you can find precedents in history, but you must always look for the differences. We have a big change which is globalisation, and it is more powerful now. We have a transfer of capital and technology, and a massive pool of labour in China and India that is priced at $100 a week rather than $100 an hour. You need to be careful because we’ll have a lot of labour substitution which implies that growth in the West will be lower. The gap is so huge and the biggest problem we face is this arbitrage of labour costs. Through technology, you can quickly teach people how to do things, you can automate so much of this.

VO: Older people spend less on goods and services, they don’t have babies or buy houses, while they have higher health costs. What do you think about the drag on global growth from changing demographics over coming decades?

KN: In my view, technology is more disruptive than the ageing of the population. And India and Indonesia have the opposite problem of millions of young people entering the labour force, what do they do? The challenge is expectations. We’ve had 24 years of growth in this country. We’re not prepared to make these adjustments and it will come through the exchange rate. I don’t think the exchange rate will drop right now, but our labour costs are making us uncompetitive, so there must be more reduction in the currency. Our expectations have to be reined in.

VO: Can you talk us through your views on China.

KN: China will grow slower and in our view, India will outpace it by a factor of two. China might go down to 4½% to 5%. It was spending $4 out of $10 on building for the future, capital works like bridges and roads. In China, the locals are switching from property to shares, at the same time superannuation and insurance is growing, so there is more of a market economy going into financial assets. We can still buy companies at reasonable prices but they’ve moved very quickly.

Here’s a point I can never repeat often enough. This business is not about creativity and great dreaming. It’s all about price. When the price of something has collapsed by two-thirds, as the Chinese stockmarket did until a year ago, that’s not when you get worried. It’s when it’s gone up three-fold you should be worried. When it goes down you should be delighting in the prospect. Let me labour this point. If I offered you the car of your dreams, you’d be hounding me to tell you the price. I used to be in stockbroking, and as prices went up, our clients really lusted after shares as they became more expensive. But that’s not what they’d do with their Mercedes Benz S- Class.

VO: You’ve had a lot of exposure to Japan, can we expect Japanese companies to be managed to deliver shareholder value better?

KN: This is a remarkably introverted country, but we are seeing clear evidence of the leading companies changing in the way they select directors and the focus on profit. They don’t have bad returns on sales but they always over invest. They have such social cohesion that they’ll all fall into line. The market’s around 20,000 and it’s likely to get to 25,000 and then get into trouble at 30,000 – I think it’s got 50% to go over the next couple of years. When you have a currency that falls from 75 to 120, your cost competitiveness is spectacular.

VO: What are your views on the economic outlook for Europe.

KN: The central problem is the productivity gap between the north and the south. The south can’t close the gap. There’s no central exchequer, there’s no backing of a central bank. I suspect somewhere down the line we will get into trouble again.

VO: Are you still happy to be overweight in shares and not too much in cash at the moment?

KN: It depends on your time frame. In 1939 if you owned shares in Deutschland and your cities were flattened and industrial base destroyed, it took until 1954 to get your money back. The same is true in Japan. The only places that you did not retrieve your wealth was in China and Russia because there was a regime change. So you’re talking to a junkie here, we always see the benefit of shares because of the rewards over the long history. The trouble is, most of us go to water because we do not fully comprehend that it’s the very essence of our living, our whole structure, to own these companies. To lose faith in equities, you have to believe there’s a change in the entire structure. A fundamental change in the economic management of the system. So that’s why we say it is volatile but it is the underpinnings of our living standards. Even in the worst of times, capital will migrate to the best business opportunities. It’s a constant in our system, and to lose that, you must think we’re going back to some form of central control and ownership.

Please take away from this one critical message. Price is critical. What does the price say? It’s not about the headlines, it’s what is in the price.

This transcript was sourced from Cuffelinks.

This information is commentary only (i.e. general thoughts). It is not intended to be, nor should it be construed as, investment advice. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Before making any investment decision you need to consider (with your financial adviser) your particular investment needs, objectives and circumstances.

Thursday, 30 April 2015 03:13

Sonic Healthcare - the investment case

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We discuss the investment case for Sonic Healthcare, a global pathology provider with Dan Moore (analyst Investors Mutual).  With the ageing of the population, thematically healthcare seems like a good investment.





Transcript of Podcast


Mark Draper: Here with Dan Moore, Investors Mutual analyst and we are talking about Sonic Healthcare which is a pathology operator that most people would know as Clinpath. That is an Adelaide name and is different interstate. Dan can you give us a flyover view of Sonic Healthcare and what they do and where they are located, I think is most interesting.

Dan Moore: Sure. Thanks Mark. Sonic Healthcare is really a global pathology planner and that they operate in a number of countries around the world. They have substantial earnings in Australia but they also, and they are the biggest pathology planner in Australia but they are also the largest player in Germany which they have a very significant operation. They are the largest player in the U.K. They are the largest player in Switzerland and close to the largest in Belgium and they are number three in the U.S. so they are quite a big global player. They also own a small radiology business in Australia and a medical centre business in Australia which I think is also the largest as well so globally diversified, diagnostics company but mainly pathology and they like to be and their strategy is to be the largest player in whatever geography they operate in.

Mark Draper: And in terms of management team, I think one of the features of Sonic, you have had a very stable management team Colin Goldschmidt has been there forever and the strategies have been in place forever. Can you talk through just a little bit of what their strategy has been in the last ten to fifteen years?

Dan Moore: Sure. Their strategy, as I said before, is to be the largest player in any market they operate in and they have achieved that through consolidating a number of markets over twenty years and they started doing that in Australia where pathology was a cottage industry and the benefits of consolidation and why this is the strategy that they tried to achieve is pathology is a fixed cost business. If you are the largest player, you will have the lowest cost base per test and it is quite synergistic if you own your own lab and then you can buy another lab and bring the pathology volume from that lab into yours and then effectively shut down the other lab. It is very synergistic to earnings and it delivers a lot of cost savings and they have done that very successfully in Australia. They have done it very successfully in Germany. They are starting to be quite successful in the U.K. and in the U.S they are number three so in the U.S they are getting there but that has been the strategy and when you are the largest player, it also allows you to deal with any government funding cuts that happen from time to time. If you are a small player, you know, those funding cuts can put you out of business but if you are the largest player who can survive any cuts, it allows you the opportunity to buy out the smaller players at cheap prices when they are really struggling. So that has been the general strategy for over twenty years executed by Colin and Chris, the CEO and the CFO, they have been there well over twenty years. It has been quite a big success story in Australia.

Mark Draper: So consolidation is part of cost cutting story, the other side of it and most people will relate to the aging of the population and a health care player like this, can you give us any feel for the growth in pathology tests and revenues and the flip side of the cost-cutting story?

Dan Moore: Sure. Yeah, no it is definitely one of the other benefits of pathology is being a diagnostics service. It can save you money through the health care system. If you diagnose diseases earlier on, it can save you a lot of money so if it is something that has been new tests are always, there is a lot of result done to develop new tests to diagnose diseases earlier and Sonic is a beneficiary of that so you can see new tests are always being develop, that’s one, and then with an aging population, obviously you have a higher prevalence of disease as you age so they are also a beneficiary of that so volume growth of pathology tests, you know, through a long period of time has grown at five to seven percent compound for a very long period of time and Sonic’s revenue should have approximated that before any acquisitions with some year to year volatility if there are funding cuts.

Mark Draper: So it is a nice space to be, you just have to be careful of government funding risks that we mentioned before. Dan thanks for that. Thanks for the helicopter view of Sonic and I appreciate your time.

Dan Moore: Thank you.


This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. We strongly suggest that no person should act specifically on the basis of the information contained herein, but should obtain appropriate professional advice based upon their own personal circumstances including personal financial advice from a licensed financial adviser and legal advice. Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306

Thursday, 30 April 2015 03:09

Why do we like Origin Energy

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We recently met with Dan Moore - analyst from Investors Mutual to discuss Origin Energy.

In this podcast we discuss the reasons why Origin Energy is attractive to investors.




Transcript of Podcast


Why do we like Origin Energy?

Mark Draper: Here with Dan Moore, analyst at Investors Mutual. Thanks for joining us.

Dan Moore: Thanks Mark.

Mark Draper: And today we are talking about Origin Energy which is an energy retailer in Australia and what people don’t know is that they are building a LNG plant in Queensland, so Dan what is the attraction of this business to you guys when you look at it from an investment perspective?

Dan Moore: Sure thanks Mark, what we like about Origin is it sort of has two parts to the business. The first part, as you said, is sort of utilities business which evolves power generation and its electricity retailing business. That business is quite a stable business, it is a business that has been stable for a long period of time. That business makes about sixty five cents per share of earnings which funds their dividends so they pay about fifty cents dividends every year and have for a number of years and we can see that going forward for quite a long period of time. At the current share price, it is close to a five percent yield so when you are buying it today, you are getting a company which can pay a five percent yield sustainably. Then the sort of I guess the upside is the LNG business. And APLNG is what it is called and it is a massive LNG project in Gladstone. Origin spent eight billion dollars and they earned thirty-seven and a half percent of the project so that is a big project and that is not delivering any earnings at all today. In two years the business will earn about sixty five cents based on our assumptions for oil price and currency which is about seventy five cents Aussie dollar and about sixty five dollars for oil. The current oil price is high fifties so we sort of see at the moment we get a company which is almost paying a five percent yield based on the existing based business but in two years, you know that yield, maybe not double, but go up over fifty percent, you know, based on relatively conservative oil price assumptions and currency assumptions so we see we get a bit of both. We have got some stability and then some upside from this new project.

Mark Draper: And in terms of the oil price, if the oil price was to go above sixty five dollars because there are some in the marketplace who believe the medium term oil price will go to closer to one hundred, what are the upsides you are talking about then if the oil price goes above sixty five?

Dan Moore: Yes, it is a very good question and because the project has a lot of fixed costs, the leverage is quite significant. It almost, I have got some assumptions and some sensitivities here between sixty dollars a barrel of oil and eighty five, the earnings is double so for every twenty five dollar increase in oil the earnings from APLNG will actually double so the upside is significant. Leverage can work both ways but we sort of feel, with our assumptions of around sixty five to sixty dollars a barrel, we think that is a conservative assumption where they can make good money. The upside is free and it will be great if it happens but using conservative assumptions we still think it is really cheap.

Mark Draper: And finally what do you think are the major risks of that stock at the moment as things stand at the moment but with respect to balance sheet and any other things that you can see.

Dan Moore: I guess that short term oil price volatility, you know, could see the stock bounce around a little and probably the other risk is the ramp up of the LNG plant. Sometimes in the commissioning phase there are some risks but with this sort of plant, our analysis shows it is relatively low risk. The operator Conoco Phillips has done this many times before, they are an experienced operator and while it is a risk, we are relatively comfortable with where the company is.

Mark Draper: Dan, thank you for that, for the fine review of Origin Energy. Thanks for your time.

Dan Moore: Thank you.



This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. We strongly suggest that no person should act specifically on the basis of the information contained herein, but should obtain appropriate professional advice based upon their own personal circumstances including personal financial advice from a licensed financial adviser and legal advice. Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306