Category: 2021

28 February 2021

Twice a year we summarise the half-year and full-year results of the companies in the ALCE portfolio. Most of the companies in the portfolio reported strong earnings recoveries in the December half-year, and dividend payouts were higher than our forecasts… [read more]

25 February 2021

• China’s top leaders have set out their top priorities for 2021 to 2025: achieving self-reliance in science and technology, and “dual circulation”.
• Self-reliance in science and technology means accelerating the development of vital high-tech industries such as semiconductors to ensure that China can develop regardless of US “threats”.
• Dual circulation means encouraging production for domestic markets as well as for export markets, and upgrading China’s internal logistics systems so as to build a unified national market.
• China is also committed to restructuring the energy sector and energy-intensive industries so as to meet the target of peak carbon emissions by 2030.
• The investment implications are obvious: China’s demand for Australian coal and iron ore will not be rising.

 

4 February 2021

In November 2008 a panicked Chinese government launched a stimulus package equivalent to 12% of then GDP. The package propelled China out of the GFC, but it created more problems than it solved, e.g.:

• A tenfold increase in corruption
• Useless or non-economic projects: “bridges to nowhere”
• A surge in banks’ bad loans
• A sharp increase in the ratio of debt to GDP
• Unsafe buildings, and highways that collapsed

20 January 2021

• Coronavirus vaccines will help us return to normal, but there will be risks, obstacles, and delays through 2021.
• 2021 will bring a W-shaped recovery in the economy and the share market: two steps forward, one step back.
• The Australian dollar is headed toward USD 90c much faster than we expected.

After the grim events of 2020, the November news of three coronavirus vaccines set off a surge of investor optimism about the future… [read more]