Sunday, July 27, 2008

Australian Stock Market Floats For August

There is a real theme to the upcoming Australian Stock Market Floats for August 2008. You guessed it - small resources stocks. Although there are only a handful of stocks due to list on the ASX next month, I thought it would still be worth running my eye over them.

Below is the meager list of upcoming Australian Stock Market IPO's.

RVE - Riviera Resources Limited (August 1)
EMG - Emergent Resources Limited (August 7)
IVA - Ivanhoe Australia Limited (August 7)
AGN - Australian Gemstone House Limited (August 14)
OHZ - Opal Horizon Limited (August 15)
MET - Mt Isa Metals Limited (August 22)

Riviera Resources Limited is trying to raise $2,500,000 through the issue of twelve and a half million shares at twenty cents each. The company plans to extend on the exploration work already done on the Three Sisters Project in Queensland with a view to eventually mining any gold or other base metals discovered.

Emergent Resources Limited want to raise $4,000,000 at twenty cents per share. Emergent Resources are looking for iron, copper, lead, zinc, gold, nickel and uranium as part of the Beyondie Iron Project in Western Australia.

Ivanhoe Australia Limited is much more ambitious. It's looking for $125 million at $2.00 per share. Ivanhoe is seeking to explore and develop copper, gold and uranium deposits starting with its "highly prospective" Cloncurry Project.

Here's something a little different. Australian Gemstone House Limited is looking for opals and sapphires. To undertake this task Australian Gemstone House will need $30 million at $1.00 per share.

Not to be outdone, Opal Horizon Limited is also looking for opals. Opal Horizon not only wants to look for opals, it also wants to be involved in the "mining, purchasing, processing, wholesaling and marketing" of opals. To that end, it is raising $6 million at $0.25 per share.

And the last cab of the rank is Mt Isa Metals Limited. They'll be looking for mineral deposits to develop in central and North-West Queensland. For this task, they're seeking $7 million at twenty cents per share.

I haven't looked at any of these companies in detail yet so if you're interested make sure you do your own homework - as you should with any Australian Stock Market float. You should not consider any of the above to be recommendations.

Wednesday, July 23, 2008

ABC Learning To Face Class Action From IMF?

I've written about ABC Learning (ASX Code: ABS) a number of times recently, and it seems there may be more bad news on the way. I read in the Business Section of The Age yesterday that IMF will be funding a class action against the Australian Stock Market's largest childcare provider.

According to the article, the lawsuit hinges upon an alleged lack of disclosure by ABC. In February of this year $73 million of develper fees was disclosed for the first time. This $73 million along with a couple of other one-off items was enough to allow ABC to report a profit, but without these one-off items, there would have been a rather nasty loss. Apparently any litigation would relate to the material nature of these developer fees.

In an announcement to the Australian Stock Exchange a couple of days ago, ABC Learning were at pains to point out that it "has not received any claim or any notice of claim" with regard to the action from IMF. It said that IMF's announcement is simply stating it's intention to fund any possible claim - depending on the level of participation.

IMF is a provider of funding and support in litigation similar to the one mentioned above. It seems to have had some success recently including a settlement with Aristocrat (ALL) for which I'm sure IMF will earn a hefty fee.

ABC Learning Shares closed at 83 cents today, down half of one cent.

Monday, July 21, 2008

Walker Thompson Australian Stock Market Investment Software

*** Important Update ***

Please read the comments at the bottom of this post if you have been approached be Walker Thompson or are considering one of their products. Take particular note of loving mum's experience.

What do you know about automated stock picking software? The reason I ask is that I've noticed a number of visitors arriving at my blog having searched for "walker thompson trading software" (or some variation thereof). I've never used any products like this but I'm curious about how they work and how many people use this sort of stock picking software.

So I'd be interested to find out how many people have used this type of software, particularly to invest in the Australian stock market, and what their experience has been. Do these packages use fundamental analysis to pick stocks or do they use some sort of technical analysis (ie. charting/momentum/trends, etc) to spit out the recommendations of what shares to buy?

To be honest, I have my doubts about how well something like this would work over the long term. Any time I buy shares, it is only once I've not only had a close look at all of the important financial ratios but also read a couple of company's annual reports as well as any other important announcements which have been released to the ASX.

Incidentally, I've since tried to find out more about walker thompson sharemarket software but none of my searches have turned up anything interesting.

Friday, July 4, 2008

Australian Stock Market Worst Return In 26 Years

The Australian Stock Market experienced its worst return for 26 years for the 12 months ending June 30. Australia's All Ordinaries Index lost more than 15% for the 2007/2008 year.

The chart below shows the movement of the All Ordinaries Index during the year.

Australian Stock Market Performance for 2007/2008

As you can see, the market tried valiantly to recover from the low point in March and was looking good until mid May when the wheels fell off again. But what does all of this mean for the average Australian investor?

Less Than Super Returns...

Perhaps the broadest impact will be to everybody's superannuation balances. As we all start to receive our superannuation statements in the mail for the past year, there will be a fair amount of disappointment. We aren't used to getting negative returns. Depending on the investment option chosen, you may experience anything from low single digit negative returns right up to double digit percentage losses.

Value Investor's Paradice?

For those investors among us with a value bias, the Australian stockmarket hasn't looked this attractive in years. After a prolonged period of strong sharemarket price growth, the past 6 months has thrown up plenty of bargains. And not just the minn
ows - blue chip stocks as well. The financial sector with banks in particular are presenting some good value but price weakness is not limited to this sector.

The pain has continued since the close of the financial year as well. The following chart shows the performance of the All Ordinaries over the past week.

All Ordinaries This Week

As you can see, after the close of the financial year on Monday, the index continued to fall throughout the week with the exception of today.