Director - Research, Consulting and Advisory, BondAdviser

Nicholas Yaxley

Director - Research, Consulting and Advisory

Australian bonds & fixed income research

BondAdviser

BondAdviser is the central reference point for intelligent information on Australian fixed income markets. We help you make informed decisions by providing unbiased research, transparent pricing data, analytics, portfolio tools and education.

BondAdviser has the broadest coverage of retail-accessible ASX-listed and over-the-counter Australian bonds and fixed income securities. We make it easy for you to review and compare investments before you place an order with your broker or dealer.

Thematic (Sector/Industry)

In <a href="https://www.bondadviser.com.au/blog/the-demand-we-have-been-waiting-for" target="_blank">November 2016</a> we stated a large proportion of redemptions would be reinvested in existing corporate issues to achieve some degree of sectoral diversification away from the banks. Since then, the demand/supply imbalance has squeezed trading margins on corporate hybrids to the point where some security valuations are being stretched from a trading margin risk perspective.Although we expect tight supply dynamics to continue and support expensive valuations, particularly for corporate listed securities, new investors should be aware of the inherent risk. For investors already holding these securities there is probably no reason to sell as scheduled corporate redemptions will continue to intensify demand in a relatively small market. We believe this situation of demand over supply will persist. However, given valuations are not reflective of risk profiles, we will be reviewing our recommendations if corporate hybrid margins continue to tighten.

In November 2016 we stated a large proportion of redemptions would be reinvested in existing corporate issues to achieve some degree of sectoral diversification away from the banks. Since then, the demand/supply imbalance has squeezed trading margins on corporate hybrids to the point where some security valuations are being stretched from a trading margin risk perspective.Although we expect tight supply dynamics to continue and support expensive valuations, particularly for corporate listed securities, new investors should be aware of the inherent risk. For investors already holding these securities there is probably no reason to sell as scheduled corporate redemptions will continue to intensify demand in a relatively small market. We believe this situation of demand over supply will persist. However, given valuations are not reflective of risk profiles, we will be reviewing our recommendations if corporate hybrid margins continue to tighten.

Valuations Stretched on ASX-Listed Corporate Hybrids

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Australia's ASIC releases the aggregated short position data four business days after the reporting day. Data in this insight is up to 13th April, published ~9AM on the 17th April.</li>
<li>The largest industry net increase in the past week was A$1.3bn into "Diversified Banks"; the largest industry net decrease was A$144mn out of "Oil&amp;Gas". Net shorts increased A$5.3bn week-on-week.</li>
<li>Companies mentioned in this regular weekly report include: <a href="https://www.smartkarma.com/entities/commonwealth-bank-of-australia" target="_blank" data-smartkarma-citation="entities:14:1" rel="noopener">Commonwealth Bank of Australia (CBA AU)</a>, <a href="https://www.smartkarma.com/entities/woodside-energy-group-ltd" target="_blank" data-smartkarma-citation="entities:13190:1" rel="noopener">Woodside Energy (WDS AU)</a>, <a href="https://www.smartkarma.com/entities/droneshield-ltd" target="_blank" data-smartkarma-citation="entities:30509:1" rel="noopener">DroneShield (DRO AU)</a>, <a href="https://www.smartkarma.com/entities/straits-resources-ltd" target="_blank" data-smartkarma-citation="entities:12080:1" rel="noopener">Aeris Resources (AIS AU)</a>, and <a href="https://www.smartkarma.com/entities/mcmillan-shakespeare-ltd" target="_blank" data-smartkarma-citation="entities:3023:1" rel="noopener">Mcmillan Shakespeare (MMS AU)</a>.</li>
</ul>


Australia's ASIC releases the aggregated short position data four business days after the reporting day. Data in this insight is up to 13th April, published ~9AM on the 17th April.
The largest industry net increase in the past week was A$1.3bn into "Diversified Banks"; the largest industry net decrease was A$144mn out of "Oil&amp;Gas". Net shorts increased A$5.3bn week-on-week.
Companies mentioned in this regular weekly report include: Commonwealth Bank of Australia (CBA AU), Woodside Energy (WDS AU), DroneShield (DRO AU), Aeris Resources (AIS AU), and Mcmillan Shakespeare (MMS AU).


Aussie Shorts [13th Apr]: CBA, Woodside Energy, DroneShield, Aeris Res., Mcmillan Shakespeare

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

<ul><li>In this report, we identify financial forensics as an indispensable part of the short-seller's tool-kit.  Specifically, we examine the role that a deterioration in earnings quality has played in the demise and poor performance of two high profile Australian small caps that were once market darlings: electronic retailer, Dick Smith Holdings and law firm, Slater &amp; Gordon.</li><li>Now that over three quarters of the ASX200 companies have reported their 2016 full year results, Evidente has undertaken a comprehensive analysis of company annual accounts and identified three companies that have reported a high non-cash component of earnings and a substantial deterioration in earnings quality in the past year: A2M, BAP and BLK. </li><li>In the second instalment of Financial Forensic, Evidente will use its cash based accruals measure to develop a more robust and clean estimate of cash based operating profitability.</li></ul>

In this report, we identify financial forensics as an indispensable part of the short-seller's tool-kit.  Specifically, we examine the role that a deterioration in earnings quality has played in the demise and poor performance of two high profile Australian small caps that were once market darlings: electronic retailer, Dick Smith Holdings and law firm, Slater &amp; Gordon.Now that over three quarters of the ASX200 companies have reported their 2016 full year results, Evidente has undertaken a comprehensive analysis of company annual accounts and identified three companies that have reported a high non-cash component of earnings and a substantial deterioration in earnings quality in the past year: A2M, BAP and BLK. In the second instalment of Financial Forensic, Evidente will use its cash based accruals measure to develop a more robust and clean estimate of cash based operating profitability.

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of ASX Stocks as of Apr 10th (reported today). The aggregated short interest was USD42.9bn.</li>
<li>We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in BHP, Qbe Insurance, Wesfarmers, Transurban, CAR.</li>
</ul>


We analyzed the changes in short interest of ASX Stocks as of Apr 10th (reported today). The aggregated short interest was USD42.9bn.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in BHP, Qbe Insurance, Wesfarmers, Transurban, CAR.


ASX Short Interest Weekly (Apr 10th): BHP, Qbe Insurance, Wesfarmers, Transurban, CAR

<ul>
<li>Australia's ASIC releases the aggregated short position data four business days after the reporting day. Data in this insight is up to 2nd April, published ~9AM on the 10th April.</li>
<li>The largest industry net increase in the past week was A$699mn into "Diversified Meals"; the largest industry net decrease was A$83mn out of "Steel". Net shorts increased A$2.6bn week-on-week.</li>
<li>Companies mentioned in this regular weekly report include: <a href="https://www.smartkarma.com/entities/goodman-group" target="_blank" data-smartkarma-citation="entities:959:1" rel="noopener">Goodman Group (GMG AU)</a>, <a href="https://www.smartkarma.com/entities/generation-development-group-l" target="_blank" data-smartkarma-citation="entities:14945:1" rel="noopener">Generation Development (GDG AU)</a>, <a href="https://www.smartkarma.com/entities/pexa-group-ltd" target="_blank" data-smartkarma-citation="entities:34716:1" rel="noopener">PEXA Group (PXA AU)</a>, <a href="https://www.smartkarma.com/entities/cochlear-ltd" target="_blank" data-smartkarma-citation="entities:918:1" rel="noopener">Cochlear (COH AU)</a>, and <a href="https://www.smartkarma.com/entities/supply-network-ltd" target="_blank" data-smartkarma-citation="entities:2280:1" rel="noopener">Supply Network (SNL AU)</a>.</li>
</ul>


Australia's ASIC releases the aggregated short position data four business days after the reporting day. Data in this insight is up to 2nd April, published ~9AM on the 10th April.
The largest industry net increase in the past week was A$699mn into "Diversified Meals"; the largest industry net decrease was A$83mn out of "Steel". Net shorts increased A$2.6bn week-on-week.
Companies mentioned in this regular weekly report include: Goodman Group (GMG AU), Generation Development (GDG AU), PEXA Group (PXA AU), Cochlear (COH AU), and Supply Network (SNL AU).


Aussie Shorts [2nd Apr]: Goodman Group, Generation Development, PEXA Group, Cochlear, Supply Network

Australia

Domino's Pizza Enterprises Limited is a franchise licence owner of the Domino's Pizza. The Company sits in the quick service restaurant segment within fast food retail and has a license which covers Australia, New Zealand, France, Belgium, The Netherlands and the Principality of Monaco. The Domino's brand is owned by Domino's Pizza, Inc, a listed US company.

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Domino's Pizza Enterprises (DMP AU)

Valuations Stretched on ASX-Listed Corporate Hybrids

In November 2016 we stated a large proportion of redemptions would be reinvested in existing corporate issues to achieve some degree of sectoral...

BondAdviser

Aussie Shorts [13th Apr]: CBA, Woodside Energy, DroneShield, Aeris Res., Mcmillan Shakespeare

Companies mentioned in this regular weekly report include CBA (CBA AU), Woodside Energy (WDS AU), DroneShield (DRO AU), Aeris Resources (AIS AU),...

David Blennerhassett

Financial Forensic - Part I

In this report, we identify financial forensics as an indispensable part of the short-seller's tool-kit. Specifically, we examine the role that a...

Sam Ferraro

ASX Short Interest Weekly (Apr 10th): BHP, Qbe Insurance, Wesfarmers, Transurban, CAR

We analyzed ASX short interest report for the past week and highlight short interest changes in BHP, Qbe Insurance, Wesfarmers, Transurban, CAR.

Ke Yan, CFA, FRM

Aussie Shorts [2nd Apr]: Goodman Group, Generation Development, PEXA Group, Cochlear, Supply Network

The largest industry net increase in the past week was A$699mn into "Diversified Meals"; the largest industry net decrease was A$83mn out of...

David Blennerhassett

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