In today’s talking points: New Critical Infrastructure Centre set up to soothe Australia-China foreign investment relations; BHP Billiton reports first-half profit thanks to increased Chinese demand; Greater China an anticipated hub for IPOs in 2017; Strong Chinese sales not enough to improve Blackmores 2016 profit.
New Critical Infrastructure Centre set up to soothe Australia-China foreign investment relations
The Australian government has begun to set up the Critical Infrastructure Centre in a bid to confirm that Australian investment is transparent and non-discriminatory. The Centre plans to develop a ‘critical assets register’, which is aimed at ensuring that investment is kept secure without elbowing out foreign investment. Chinese investors have been on a rollercoaster with federal and state government in Australia in the last few years. While the government in the Northern Territory welcomed the leasing of the Port of Darwin to Chinese company Landbridge Group, last year the sale of New South Wales power company Ausgrid was set to go ahead before the government decided on a last-minute veto, citing national interest as the justification. The new Critical Infrastructure Centre is hopefully a step in the right direction to signal to Chinese investors that Australia does not have a hostile view towards foreign investment.
Read more at Yahoo Finance
BHP Billiton reports first-half profit thanks to increased Chinese demand
BHP Billiton has done a backflip from last year’s reported loss and has reported first half profit of over US$3 billion. The resurgence is attributed in part to the increase in Chinese demand which in turn pushed up commodity prices. This surge has done wonders for the mining sector as China’s stimulation of the market has both increased activity in infrastructure and demand for raw materials. While the current commodity price is higher than forecasted for appropriate long-term prices by the mining giant, CEO Andrew Mackenzie is confident that after this boost, in the longer term China’s economy and demand for commodities will continue to change and rebalance. Mackenzie has emphasised the importance of free trade as “a very important driver of economic growth in the short term and long term”, though the protectionist efforts felt worldwide recently does leave BHP Billiton in an uncertain place in the near-term.
Read more at Bloomberg
Greater China an anticipated hub for IPOs in 2017
China’s IPO market started with a bang and is set to continue its success into 2017. This momentum is fuelled by a great finish in 2016, with the hosting of four of the worlds ten largest IPOs globally, as well as the largest deal of the year – the Postal Savings Bank of China Co. Ltd. Raising over US$7 billion on the HKEX. With a strong pipeline of companies that eagerly await listing, Greater China will be one to watch out for as a potential IPO leader in 2017. IPO leaders that are anticipated are Ant Financial, Alibaba’s parent company, and Lufax who plans to raise US$5 billion by the end of 2017 in a Hong Kong IPO.
Read more at Fintech
Strong Chinese sales not enough to improve Blackmores 2016 profit
Blackmores, the Australian vitamins and nutritional supplements maker, has announced its first-half profit at almost half what it was in 2016. The company’s net profits fell to AUD$28.5 million, and there was also a sharp 5.6 per cent drop in sales revenue. Sales themselves were down 31 per cent compared with the 2016 year, but there has been growth between the first and second quarters. The company remains positive going into the new year, however, focussing on China and Asia sales specifically. Chinese sales are strong, delivering almost a third of all sales revenue in the first-half, and the majority of other Asia sales revenue increased by 16 per cent. The company is keen to better understand the Chinese market, citing it as “complex and challenging, though…a very important part of the business”. Understanding the Chinese market and increasing the brand in China are key to helping future growth of the company, which Blackmores aims to do through increased brand and infrastructure investment.
Read more at SBS