Nick Cavallo is the second Mildura Rural City councillor to decide not to seek re-election in November.
The Mildura businessman wants to regain the 20 to 30 hours he spends each week on council commitments and hopes to achieve a better work-life balance.
For similar reasons in March this year, councillor Fiona Hilton-Wood decided against nominating for a second term.
She wanted to spend more time with family and focus on the law firm she runs with her husband.
Both Cr Cavallo and Cr Hilton-Wood will remain dedicated to their council roles until the end of October, just before the election in November.
As well as fulfilling his weekly council commitments, Cr Cavallo is a partner in Leading Edge Computers Mildura, president of Mildura Settlers’ Cricket Club and a committee member with groups including Willowfest, the Iluka Environment Review committee and Sunraysia Sustainability Network.
He said his decision not to run again was “not made lightly”.
“Basically it’s a combination of things, I couldn’t sustain what I did,” he said.
For more of this story, purchase your copy of Tuesday’s Sunraysia Daily 18/09/2012.
Standing down: Councillor Nick Cavallo has decided not to stand for re-election in the Mildura Rural City Council election in November.
This story Administrator ready to work first appeared on Nanjing Night Net.
Dubbo has one candidate for mayor and one for deputy mayor, but most councillors are keeping their cards close to their chest.
Incumbent Mathew Dickerson will seek to return to the top job on Thursday while re-elected councillor Lyn Griffiths has announced she will stand for deputy mayor.
Those positions and committee leaders will be subject to a vote at an extraordinary meeting of the new Dubbo City Council on Thursday.
The civic leaders – four new to the role and seven returning – have big decisions before them.
Cr Ben Shields gained the most votes and was the first candidate declared, but he declined to comment on the mayoral race yesterday.
Cr Dickerson gained the second-most votes followed by newcomer John Walkom.
Cr Dickerson said he thought he had worked hard to be a positive representative for Dubbo as mayor and the other leadership positions needed to be filled – for at least the first year of the term – by people with some experience.
When asked if it made sense to have Cr Shields in one of the two top roles, Cr Dickerson said he was not sure of his colleague’s intentions.
“At this stage Ben hasn’t contacted me and asked for my vote so I am not even certain if he will be standing for the position,” Cr Dickerson said.
“If he contacts me and informs me that he is standing and wants my vote I will certainly listen to his reasons why he would make a good deputy mayor.”
Deputy mayor-hopeful Cr Griffiths said Cr Shields’ good poll result was a moot point because Dubbo did not have a popularly-elected mayor.
“The factors that I consider important are the ability of the nominated person to work hard for Dubbo and to work with other councillors in a positive and productive manner,” she said.
Cr Rod Towney ruled out any run for a position and gave his support to Cr Dickerson and Cr Griffiths.
“Mathew Dickerson has done a good job, going out on a limb to try to bring councillors together,” he said.
“For all the females around town it would be good to have a woman as deputy mayor, and Lyn has the runs on the board.”
Bill Kelly ruled out nominating for a position and although he would not declare his support for anyone, he said he knew which way he would vote and why.
“I’m not prepared to discuss this now, you’ll see on Thursday,” he said.
“I have my mind made up and the reasons and then I’ll be doing my best to unify the council.”
He said the actions during the next 12 months of those he voted for would decide whether his support was ongoing.
Mr Walkom was also coy about commenting on the race.
“To ensure a cohesive united council for which I have been a great advocator during my campaign for election to council, I think it prudent that the process of the election of the various positions on council be left to the democratic process of the meeting this coming Thursday,” he said.
Cr Tina Reynolds also said the discussion about the leadership positions should be amongst the 11 councillors, not played out in the media.
The Daily Liberal had not received any other responses to its request for comment from all councillors-elect at the time of going to press.
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‘The much smaller size of NZ’s economy means it would probably be hitching itself to the stronger Aussie dollar.’A CURRENCY union between Australia and New Zealand has been rejected by top economic think tanks in both countries, with Europe’s woes with the euro weighing heavily on the proposal.
For decades a shared currency has been floated by economists as one way of reducing business costs and boosting trans-Tasman trade and investment. The ”Anzac” was suggested as a name.
A joint discussion paper from the productivity commissions of Australia and NZ will dismiss the proposal today. It says that without political integration, the move would give each country less flexibility in managing its economy.
Monetary union would require interest rates to be the same in both countries, giving them less room to respond to local economic conditions. Currencies also tend to act as ”shock absorbers” for economies, by falling in times of weakness, which helps to make exporters more competitive.
But the much smaller size of NZ’s economy means it would probably be hitching itself to the stronger Aussie dollar.
While the paper conceded trade may be increased by a common currency, it added: ”Monetary unions also entail some risks. They imply a loss of autonomy over monetary policy and exchange rate flexibility, which are important tools for macroeconomic stability. There are few instances where monetary union has worked effectively without some degree of political union.”
The proposal for a single currency was examined as part of an inquiry into how to deepen economic relations between Australia and NZ.
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CASH bonuses for the heads of Australia’s biggest companies have fallen to levels not seen before the financial crisis as profits and share prices have come under pressure.
The latest annual remuneration report by the Australian Council of Superannuation Investors, showed average bonus payments of $1.25 million last year were down to their lowest level since 2004. The bonus payments were 20 per cent below the previous year.
The ACSI report, to be released today shows the fixed pay of chief executives in Australia’s top 100 listed companies held steady in 2011.
Overall, the average cash pay for a top-100 CEO declined 8.9 per cent from 2010 levels to $3.05 million, reflecting the fall in bonus sizes.
ACSI chief executive Ann Byrne said a more mature conversation on executive pay was taking place between boards and investors.
”It is clear that directors began listening to shareholder views on bonus sizes during 2011 and began making the adjustments that have continued into the first part of 2012,” she said yesterday.
Even so, about 90 per cent of chief executives still received some form of bonus payments over their fixed pay cheque, she noted.
The analysis of remuneration for nation’s top 200 companies by ACSI, which advises the nation’s biggest superannuation funds, throws new light on how much our corporate leaders are really paid.
It shows the pay gap between what is reported in company disclosures and what chief executives often end up taking home. BHP Billiton’s Marius Kloppers was last year paid $11.08 million, but his realised pay was $17.3 million, the ACSI report shows.
Minimum disclosures often fail to take into account the upside chief executives often receive from additional packages such as deferred bonus shares or cashing in on options, which is a right to acquire shares in a company often at a heavily discounted price.
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RUMOURS about a potential takeover saw Leighton shares jump more than 8 per cent to close $1.32 higher at $17.05 yesterday, along with confirmation its desalination plant is now producing drinking water.
News that a French construction company could be interested in Hochtief’s Australian asset, Leighton Holdings, and a large late trade on Friday afternoon sent investors with short positions scrambling to cover themselves.
A Financial Times Deutschland interview with Xavier Huillard, chief executive of Vinci, revealed ”mergers and acquisitions are in [Vinci’s] genes” and that he finds Australia an ”interesting market”.
He agreed Vinci could be interested in particular activities of debt-laden Spanish firm ACS, which is the biggest shareholder in Hochtief, which owns 54 per cent of Leighton Holdings.
However, Vinci also likes to have full control of its investments, Mr Huillard said, and with Leighton’s complex ownership structure it would not have full control of the Australian company.
Leighton spokesman Justin Grogan said: ”We have no comment to make on the rumour which is a matter of speculation about our major shareholder and their major shareholder.”
A more likely explanation for yesterday’s 8.4 per cent jump against a market that closed 0.3 per cent higher was investors covering their short positions at the ”sniff of a takeover”, according to Commonwealth Bank equity analyst Ben Brownette.
”When you see that kind of volume go through a stock in that circumstance it would appear to be short covering,” he said.
Investors with short positions purchase shares when they believe the share price has bottomed.
Mr Brownette added that talk of Leighton as an acquisition target demonstrates how attractive the company’s geographical footprint across Australia and Asia is to global construction firms and illustrates how undervalued the stock is.
Leighton Holdings yesterday also revealed drinking water has been flowing for seven days from one of three streams at the desalination plant being built by its subsidiary Thiess in Victoria’s south-east. It made the announcement after construction partner Suez Environment put out a similar one on Friday afternoon.
However, the consortium – dubbed AquaSure – will still be denied revenue of $1.8 million per day from the Victorian government until it is operating at full capacity. Leighton has already flagged a $106 million hit to this year’s earnings because of delays at the plant.
”Under the contract, as per most public-private partnership contracts, payments do not commence until project milestones are met,” a spokeswoman for Water Minister Peter Walsh said.
”The current work program has the plant being finished by February 2013. The full payment of the holding charge of $654 million per annum will commence at that time.”
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THE Lord giveth, the Lord taketh away. Well, some of the time.
As the great iron ore truck in the sky prepares to unload on Twiggy Forrest’s Fortescue Metals, it’s good to know that even when you’re faced with selling a few assets to keep the banks happy there’s still a payday to look forward to.
Particularly given that Twiggy owns a great swath of Fortescue stock.
Twiggy’s wealth took a hit in the hundreds of millions last week as iron ore prices – and Fortescue’s share price, to which Twiggy’s wealth is inextricably linked – tumbled and concerns were raised about Fortescue’s ability to service its debt.
Twiggy spent about $38 million increasing his stake before the share price was mauled last week as iron ore prices slumped, leading to unpleasant talk about the need to raise capital if those lenders of the odd billion in debt don’t like it.
One can only wonder if an equity raising were to eventuate – and Citi analysts suggest a $500 million capital raising may be necessary – whether Twiggy might use any of the $41 million dividend he will receive to tip into a raising.
Or whether it’s best to hang onto what he still has while he’s got it.
What disclosure?
WHEN Aquila Resources 2011 full-year results were released, the coal and iron ore explorer’s executive pay restraint looked admirable.
In a year when the company reported a near doubling of an annual loss to $64.5 million, Aquila told shareholders that executive chairman and CEO Tony Poli’s salary rose just $14,500 to $572,000. Turns out Tony did a bit better than that, pocketing another $169.4 million. Easy mistake to make.
As the Australian Council of Super Investors pointed out yesterday, Poli had the largest gap between realised pay and reported pay in its latest report card on CEO remuneration on the back of a tidy gain on an exercise of options granted in 2005.
”In December 2010 he exercised 5 million options approved at the 2005 AGM with an exercise price of $4 each and received 19.2 million shares in exchange for a total value at the time of exercise of $169.36 million,” ACSI points out.
There’s no suggestion Aquila has under-reported Poli’s remuneration. We’d hate to appear presumptuous but perhaps the corporate plod might look at pay disclosure requirements.
Note of distinction
A NOTE from the corporate plod straight from the ”we don’t know whether to laugh or cry” files has come to our attention.
The watch-puppy has reminded financial market players of the difference between buffer money and client money. Specifically, it pointed out that ”buffer money is not client money”.
We’d hate to think that means those wearing smart suits and ties at the pointy end of town are having trouble figuring out the subtle difference between what is their money and what is yours.
Market participants regularly deal with large amounts of money relating to financial products on behalf of clients, the Australian Securities and Investments Commission explained. They are required to hold client money in trust accounts for investors who pay them to trade in financial products on their behalf.
”Buffer money is the term used to describe money added by a market participant to the trust account to ensure that the client money trust account has adequate funding,” the plod intoned.
Having pointed out the basic difference, ASIC goes on: ”Buffer money is not client money, as it does not fall within the client money definition in … the Corporations Act, and cannot be considered to be money for the purposes of a client money trust account.”
ASIC adds that the practice of depositing buffer money in a client money trust account is not permitted.
We suspect it’s trying to point out it’s not a good look to use client money to meet funding levels.
Disparate interests
ALIGNING shareholder and management interests may not be easy, but for shareholders at AGL, the contrast is stark enough.
Earnings per share slumped to 24¢ in the year to June from 118.5¢, but that didn’t stop directors giving chief executive Michael Fraser a hefty pay rise – he took home $6.3 million, up from $3.4 million a year earlier.
Still, even using the company’s reckoning of ”underlying” earnings per share of 100¢ for the latest year, up from 91.4¢ a year earlier, Fraser has done very well for himself, although perhaps the proof of the pudding will be in the eating, with the key to shareholders’ prospects lying with the purchase for about $450 million (plus a rather large lump of debt) of Loy Yang A during the year.
Tide’s out
WATCH this space: Steve van Barneveld, boss of Nathan Tinkler’s Hunter Ports, quit last Monday as a director of another Tinkler entity, Ocean Street Holdings, just as it squared off against Mirvac over a small matter of about $17 million it owes the developer for an unfinished property transaction, by order of the Supreme Court.
Van Barneveld’s resignation was effective immediately.
It will be interesting, when the matter reconvenes for a directions hearing in the New South Wales Land and Environment Court this morning, what new evidence Ocean Street seeks to bring as to why it should not have to abide by the umpire’s decision.
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The grounds of Budgewoi Football Club. Budgewoi Football Club.
Alessandro Del Piero faces the media in Sydney yesterday.
FROM the Stadio Olimpico in Rome to the humble surroundings of Budgewoi?
Until last night, this was the fate set to be bestowed on one of the greatest footballers of all time, Alessandro Del Piero.
”Our Holy Grail” – perhaps a more apt description for the 70,000-seat Olimpico – is how the Budgewoi Football Club website describes the modest Budgewoi Sports Complex on the central coast.
Pleasant a facility though it is, it could have hosted one of the most eagerly anticipated football events of 2012: Del Piero’s first match in a Sydney FC shirt.
It was there that Sydney were due to face the Newcastle Jets in a friendly match this Saturday, set to be held behind closed doors.
You couldn’t get a venue further removed from the place where Del Piero played his last competitive match. It was at the Stadio Olimpico, in front of a packed house, where his club of two decades, Juventus, faced Napoli in the Coppa Italia final on May 20.
Napoli won 2-0, but when Del Piero was substituted in the 68th minute both sets of fans gave him a standing ovation.
However, amid the exploding interest in Del Piero’s arrival – and the certainty of thousands trying to get a glimpse of Saturday’s clash – the match was cancelled last night by Newcastle, the host club.
The match could still be played elsewhere if the clubs can agree on a venue, but Sydney officials confirmed last night that they had no say on where the match would be played if it were to go ahead.
Del Piero now has just 18 days to prepare until his first A-League match for Sydney, away to Wellington Phoenix, on October 6.
The club has only one game left before the season proper – another closed-doors friendly, against Central Coast at Macquarie University on September 27.
Asked about his fitness at his first official news conference at the Star casino yesterday, Del Piero said he wouldn’t have any problems, having worked out with a team in Turin.
”I am coming from two months training with my personal trainer and with a young team in Italy,” he said. ”I do everything I can do to stay in better condition.
”Now I need to go with the team, to know the other players, the coach [and] what he needs.”
This story Administrator ready to work first appeared on Nanjing Night Net.
“I have a lot of things to do in two years” … Alessandro Del Piero.NO PLAYER in any domestic football code will know the weight of expectation on Alessandro Del Piero’s shoulders when he makes his debut for Sydney FC next month, but the $4 million man wouldn’t have it any other way.
As he fronted the Australian media for the first time at the Star casino in Pyrmont, Del Piero said predictions that he could propel Sydney to their third A-League title did not faze him one bit.
“It is clear that there will be a lot of pressure to produce, but I think this is just the first step,” he said. ”I am used to this, and I love that. I played 19 years with Juventus – and in Juventus you have to win every game, every year. Fortunately a lot of the time that happened – but all my life I play for winning. I’m here for winning … I’m here because I trust in the win.”
Few players have revelled in the spotlight as much as Del Piero over the course of his brilliant career. Expectation is something he has grown up with – right back to when he broke into the first team at Padova at just 16.
After all, this is the same player who went on to score in a Champions League final, rammed home 27 goals for the Italian national team and scored a hat-trick on his full Serie A debut in 1993 at the age of 19.
However, when asked about what he hoped to achieve by the end of his two-year stint, at which stage he will be 39, Del Piero did not want to put a cap on it.
”I don’t know now. I have a lot of things to do in two years,” he said. “The most important thing is to stay focused on this moment, the present. It is a big change for me. I want to work in the present because I don’t know what happens later.”
Those involved in the deal to bring Del Piero to Australia have dubbed the move ”Project Sydney”, and the Italian is determined to provide the A-League with the boost it has been missing since it began in 2005.
”It is a very interesting project. Sometimes I decide with my feelings, but this was with my heart, head and feet,” he said. ”First of all I am here for Sydney FC and competing for Sydney FC. Then we hope [it is] about the A-League growing up day by day, and this is hard work.”
Asked how those closest to him reacted to his decision to choose Sydney over other clubs that wanted his signature, including Liverpool, Celtic, FC Sion and Olympiacos, Del Piero said they took some convincing.
”Most of my friends said: ‘OK, you want to change, but there’s a lot of places closer,”’ he said. ”I said, I know, but that I chose the best place.”
The change in conditions from the European winter to the southern hemisphere summer has caused problems for many players coming to the A-League, even Sydney’s Australian marquee signing Brett Emerton said it was an issue, but Del Piero seemed relieved by it.
”It’s different from Italy,” he said. ”It’s not -5 or -10 degrees. There [football in summer] does not happen. This is good for me.”
Convincing the eldest of his three children, five-year-old Tobias, about moving to Australia involved invoking the promise of spotting local wildlife.
”I promised to my son we’ll see kangaroos … my son said: ‘Ok, I’m happy,”’ Del Piero said, declaring he wanted his family to embrace the Australian lifestyle as much as possible. ”We hope to ‘live Australian’ in every part of every situation.”
He said he was aware the country had a rich football history, largely as a result of the postwar immigration. ”I know there has been a lot of Italian, English, Greek, Croatian and Yugoslavian immigrants … [people] from all over the soccer world.”
The reception he had at Sydney Airport on Sunday morning, with more than 500 fans turning out, was unlike anything seen for an individual footballer in this country, and Del Piero said he was delighted by the welcome. ”Yesterday was fantastic, I really appreciated it,” he said. ”The fans, this was perfect for me … It was a surprise but a good surprise.”
This story Administrator ready to work first appeared on Nanjing Night Net.
REMEMBER Kevin Rudd’s mining tax? It needed some tweaking in industry’s favour, but even then it would have hauled in massive revenue without harming investment, which is the holy grail of tax policy. So, the government planned to use it to fund a bonanza of sensible giveaways including lowering the company tax rate from 30 to 25 per cent.
When the miners invested in a scare campaign with even higher rates of return than their mines, the rest of the business community had to answer that great question in life posed most recently at the Spice Girls’ performance at the London Olympic closing ceremony: ”Tell me what you want, what you really, really want.”
When push came to shove, few businesses and even fewer business associations campaigned for the package even though it was far and away the best break they were likely to get in a good while. It just wasn’t what they really, really wanted.
And so, here we are again, two years on, with business still seeking lower company tax. Government has put the challenge to business again saying it will cut company tax, but only if the Business Tax Working Group, comprising business, unions and tax experts, can identify which business tax concessions should be removed to fund it; the problem is, without ”Mining Tax Mark 1” the choices are much harder.
However, the removal of a single business tax concession could fund company tax reductions down to about 19 per cent. The dividend imputation scheme introduced in 1987 ended the double taxation of company profits by relieving Australian shareholders of personal tax payments on their dividends to the extent that their companies had already paid company tax.
Paying tax twice seems daft and unfair. But it costs a bomb – which raises that Spice Girls question. Is it ”really, really” the best thing we could be doing with more than $20 billion in tax revenue? It would be hard to forgo that kind of money in business tax without doing some economic good by lowering business’s cost of capital, but, by god, dividend imputation does it. Let me explain.
If dividend imputation lowers the cost of capital, it does so by increasing the demand for Australian shares and thus raising their price. But foreigners don’t benefit from imputation credits. So, abolishing dividend imputation to fund company tax cuts lowers tax on foreigners and increases it on domestic shareholders. And because Australian shares are such a small part of foreign investors’ portfolios, foreigners are much more responsive to changes in after-tax returns than Australian investors.
For instance if, in response to the changes, foreign investors raised their allocation to Australian equities from 3 to 4 per cent, that’s a third more foreign investment; while domestic shareholders would be far less responsive. What I’m proposing would even come with its own compensation package for those domestic shareholders that wanted to put their money elsewhere – they’d be able to sell out at new price highs.
This isn’t just theory. Econometric studies of the introduction of imputation in 1987 suggest that it didn’t increase share prices. Conversely, when British pension funds were recently stripped of similar imputation credits, foreign buyers snapped up the few shares offloaded by British funds with negligible price falls.
The BTWG knows all this, observing: ”In small open economies like Australia, the marginal investor is likely to be a foreign investor.” Which calls into question ”whether dividend imputation is likely to significantly lower the cost of capital for Australian companies”.
Put more bluntly, $20 billion of business tax revenue does not stimulate investment. One could do as much good for the economy by dispatching random cheques to Australian households. No wonder that, as they compete to attract each others’ capital, European countries have moved away from dividend imputation.
Then, in the next breath, the BTWG argues that dividend imputation is outside its remit, that its terms of reference seek to quarantine its deliberations to the business tax system. Call me quirky, but I’d say that dividend imputation is part of the business tax system.
So, I’ll tell you what I want, what I really, really want. I want the BTWG to consider these arguments and put them to government – preferably as recommendations, but, failing that, as clear observations rather than asides.
Do I expect our beleaguered government to jump on such an insight right away? No. But in Australian policymaking, such an insight has usually been the foundation for real progress, if not immediately then over a few electoral cycles as the inevitable crises rob governments of politically easy options and as political parties jockey to persuade us they’ve got a serious reform agenda to keep us, ahem … moving forward.
Nicholas Gruen is chief executive of Lateral Economics.
This story Administrator ready to work first appeared on Nanjing Night Net.
THE sharemarket yesterday rose to its highest close since early May, lifted by the miners, as a recent recovery in commodity prices and a flurry of central bank stimulus fuelled hopes for stronger global growth and demand.
The benchmark S&P/ASX200 Index rose 12.5 points, or 0.3 per cent, to 4402.5, while the broader All Ordinaries gained 11.6 points, or 0.3 per cent, to 4421.8.
The materials sector led the move, rising 1.9 per cent, and goldminers rose 2.2 per cent. Consumer staples and discretionary fell 0.6 and 0.4 per cent respectively, while industrials lost 0.6 per cent.
Meanwhile, the Australian dollar consolidated its gains from last week, trading around US105.4¢. Over the weekend, it jumped past the US106¢ mark, its highest point in six months.
Investors continued to dive into mining stocks on the back of the US Federal Reserve’s third round of quantitative easing to stimulate the fragile US economy.
”It’s probably a two-part story, not only is there a confidence boost from the quantitative easing from the Europeans and the Americans, but also the fact we’ve seen commodity prices rise in the last week or so,” said Darryl Conroy, market analyst at Suncorp Banking.
”Specifically metals have performed very well. Of course, iron ore, popping back over $US100 a tonne, has probably given our mining sector a much needed confidence boost as well,” Mr Conroy said.
BHP rose 84¢, or 2.5 per cent, to $34.15, while Rio Tinto added 92¢, or 1.6 per cent, to $57.50, Iluka Resources jumped $1.06, or 10.2 per cent, to $4.35.
Investors are keenly awaiting an announcement from Fortescue Metals about the restructuring of its debt. The troubled miner entered a trading halt on Friday after spiralling more than 14 per cent on Thursday last week.
Australia’s largest goldminer, Newcrest Mining continued its upward push, adding 76¢, or 2.7 per cent, to $29.12.
Gold traded around six-month highs, at around $US1770 an ounce.
All the big banks posted gains, with Westpac leading the charge, rising 31¢, or 1.3 per cent, to $24.42, ANZ added 16¢, or 0.7 per cent, to $24.39, NAB increased 7¢, or 0.28 per cent and CBA remain flat, adding 1¢ to finish at $55.29.
Retailers dragged on the market, department store David Jones lost 7¢, or 3 per cent, to $2.23, rival Myer fell 2¢, or 1.1 per cent, to $1.83.
Woolworths dropped 30¢, or 1 per cent, to $28.56, while Wesfarmers finished relatively flat, down 2¢ , to $24.53.
Mr Conroy said yesterday’s gains should be taken with a ”grain of salt”, as volumes remained low, indicating investor caution.
Average trading volume for the ASX200 is 820 million shares traded, while on the day, volume was below 680 million.
”One thing that is probably certain: more volatility to come,” Mr Conroy said.
This story Administrator ready to work first appeared on Nanjing Night Net.
IT’S been a tough few years for share investors but for the first time in a long time there is some good news coming from the Australian sharemarket.
As this week’s analysis provided by Alan Clement, an international futures trader and member of the Australian Technical Analysts Association, shows, the
S&P/ASX 200 Index has been trading within the symmetrical triangle formed by the two dashed red lines on the chart since 2009.
In heavy selling in mid-2011 the index was sent tumbling from the upper boundary of the triangle to the lower boundary in one quick move, which ultimately exhausted the sellers and marked the low point for the year.
Following that fall, the market spent seven months consolidating in a tight wedge formation, only to fall through the bottom last May.
Buyers then quickly stepped in following the breakdown and have since pushed the market higher to recover almost all the losses, turning May’s selloff into a “higher low”, which Clement sees as a bullish sign.
At present the index is testing resistance at 4370 and actually broke through this level last Friday. However, we may see a short-term pullback as the market struggles around this resistance point.
“Ultimately, though, the market looks poised to break through the resistance and make for the upper boundary of the triangle, currently at around 4780,” Clement says.
While Australia’s economy is better than its US counterpart, Clement sees two factors holding our market back as Wall Street nears 2007 highs. The first is a high correlation with commodities markets, which are in consolidation phases of their own at present, with many commodity prices weakening this year. The second is the high Australian dollar, which stifles overseas investment by making stocks comparatively more expensive.
Those factors could impede upward momentum in the market. If and when the S&P/ASX 200 reaches the upper boundary of the symmetrical triangle there is more likely to be further consolidation within the triangle between 4700 and 4100 for about the next six months than an immediate move to the upper resistance level of 4900, Clement says.
Keep an eye out for a breakout from the triangle in either direction before the year’s end, as that would demand a rethink of strategy. Investors can gain exposure to the ASX 200 Index via CFDs, the SPI futures contract or exchange-traded funds such as State Street’s STW.
This column is not investment advice.
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THE expected departures of Beau Ryan and Chris Heighington to Cronulla could pave the way for Manly prop Brent Kite to join Wests Tigers next season.
While all parties were yesterday denying speculation of the NRL’s latest player merry-go-round, the Herald was told that player agents have been advised that the Sea Eagles are looking for a new prop next season.
The Sharks’ signing of Ryan and Heighington is also expected to result in the club releasing Kiwis international Jeremy Smith to join Newcastle next season. Liam Fulton and Lote Tuqiri are also expected to re-sign with the Tigers.
Both Manly and Wests Tigers are rumoured to have salary cap problems, with NRL salary cap auditor Ian Schubert reportedly refusing to register Sea Eagles fullback Brett Stewart’s new contract until the club resolves the problem.
A Manly official told the Herald that Kite was under contract next season, while the Sharks denied they had yet signed Ryan or Heighington.
However, it is understood that deals with both Tigers players are close to being finalised – much to the frustration of disappointed teammates, who were unhappy last year that the club released Bryce Gibbs and Andrew Fifita to make way for the signing of Adam Blair.
Captain and hooker Robbie Farah has also been linked to Parramatta but he is expected to remain at the Tigers for next season at least.
Speculation was rife a year ago about Ryan and Heighington joining Penrith this season but both stayed with the Tigers.
Heighington, now the English representative lock, was on contract with the Tigers until the end of the next season but the club is understood to have baulked at offering him an extension, given the failure of the squad to reach the finals this year.
Heighington was approached about a three-year deal with Cronulla, which he has clearly found difficult to ignore given his future at the Tigers was clouded.
Ryan’s impending departure is peculiar given his announcement on The Footy Show during the season that he had agreed to a new deal with the Tigers. Yet that deal was never formalised, and with Heighington’s future in the air, it appears certain it will not be.
Heighington and Ryan are good friends and are both popular members of the Tigers, which means the playing group will be hit hard by the departures, a year after Gibbs and Fifita left for Cronulla.
Ryan’s manager Wayne Beavis maintained he had signed ”no contract with Wests Tigers”, but that does appear to be a formality.
The Tigers are expected to announce that Tuqiri has agreed to a new deal with the club, which will ensure that his NRL career does not end with a broken arm.
Fulton is also believed to be close to finalising a new deal to remain at the Tigers beyond next season.
Meanwhile, Manly prop Jason King will be named today for Friday night’s preliminary final, despite failing to finish the match against North Queensland due to a shoulder injury. King was forced from the field with the same injury during the previous week’s loss to the Bulldogs.
Sea Eagles coach Geoff Toovey yesterday admitted there was a silver lining to his side being forced to play against North Queensland last weekend. ”It was actually a good thing for us, we ended up finding some form against North Queensland, and I think that will stand us in good stead for Melbourne.”
This story Administrator ready to work first appeared on Nanjing Night Net.