Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Sunday, 28 August 2016

Coal rallies hard

Coal price booms

A spectacular rally in coal prices has led to some equivalently spectacular price action on the share markets.

Whitehaven Coal (WHC) blazed from a low of 36 cents earlier in the year to above $2.00, before easing back for a Friday close of $1.84.

Civil and mining contractor NRW Holdings (NWH) has a number of key coal contracts - including with Middlemount and Rio Tinto - and has been more than 15-bagged from 4 cents to 62.5 cents.

In the year to 30 June 2016 NWH reported revenues of $288 million and EBITDA of $47.4 million.

Despite an order book swelling to $1 billion, the company did not announce a final dividend, instead opting to pursue a significant reduction in net debt, with a target of clearing all debt balances within 30 months.

With the outlook for resources sector stabilising and infrastructure taking off, the market recognises improved tender opportunities for service providing companies.

Index weights

While iron ore has been a top performer in 2016 to date, a number of analysts, including from Westpac, expect that this strength will not last until the end of the year due to oversupply.

Coking coal on the other hand has rallied by nearly 25 per cent in August to be up by a tearaway 73 per cent since the middle of February. 

The Reserve Bank of Australia (RBA) will release its Index of Commodity Prices for the month of August this week. 

In July the index increased by 4.1 per cent since it is reported in monthly average terms.

However, if it was reported using spot prices for the bulk commodities, the index would have increased by 8.3 per cent in July, to actually be 3.5 per cent higher over the past year. 

Given the likely downward pressure on iron ore prices, the outlook for coal, oil and LNG - and to some extent gold - will be crucial to the resources revenues and national income.