Sunset Strip - Baillieu Holst

Aussie Afternoon Institutional Market Wrap 23 December 2016

Mathan Somasundaram – Baillieu Holst Quant Strategy [email protected] – 612 9250 8947

Sunset Strip Market Snapshot after close & Intraday S&P 200 Chart Categories S&P/ASX 200 US - DOW US - S&P 500 Canada UK Germany France China Japan Hong Kong NZ

Daily Change 5627.90 -16.00 19918.88 -23.08 2260.96 -4.22 15335.23 29.34 7063.68 22.26 11456.1 -12.54 4834.63 0.81 3120.45 -19.11 1543.82 0.00 21525.95 -110.25 6876.99 25.12 Last

% Daily Change -0.28 -0.12 -0.19 0.19 0.32 -0.11 0.02 -0.61 0.00 -0.51 0.37

Gold

1131.06

Daily Change 2.96

US 10 Year T-Bond US 30 Year T-Bond

2.5517 3.1273

0.01 0.02

0.55 0.59

0.7209 0.9578 1.7028 1.4484 117.4700 1.3491

0.00 0.00 0.00 0.00 -0.08 0.00

-0.13 0.14 0.03 0.17 -0.07 0.05

Categories

$A/$US $NZ/$A STG/$A Euro/$A $US/YEN $US/CAD

Last

% Daily Change 0.26

LAST SUNSET STRIP FOR 2016&SEE YOU IN 2017!!! MERRY CHRISTMAS AND HAPPY NEW YEAR!!! MARKET SUMMARY MACRO/STOCK EVENTS: Tonight – UK GDP; US New Home Sales, University of Michigan Sentiment. Tomorrow – None.

CHART OF THE DAY: The chart below shows the trend in Chinese inflationary outlook. China’s official inflation rate -- still near its 2 percent average of the past four years -- masks a surge in living costs felt by its most-influential citizens. That’s why Hao Hong, chief strategist at Bank of Communications International Holdings Co. in Hong Kong, is looking at surging housing and factory prices, as well as weakening yuan forwards and collapsing bonds, to more effectively gauge inflation. As the consumer-price index rose 2.3 percent in November from a year earlier, the producer-price index jumped 3.3 percent and new home costs in first-tier cities surged almost 27 percent. "China’s official consumer price index is definitely understated,” Hong said. The currency is weakening with "persisting momentum, and the 10-year yields rise isn’t done yet.” Savers in the biggest cities, the most able to flee a plunging local currency or hunt for returns to preserve their wealth, are feeling the impact of rising housing costs that boost everything from the price of copper and steel to the wages of nannies and waiters. Consumer prices rose 3.7 percent in Shanghai in November from a year earlier, even though CPI includes rent but not home-buying prices. “The current basket doesn’t consider the full effect of the burgeoning housing bubble," said Hong.

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MARKET COMMENTARY: Aussie Market > Market lost the momentum from four straight positive days to deliver a negative day. We are in the school holiday period where most investors will take the next two weeks off with Christmas and New Year breaks. We have seen better volumes this week than most expected and that may dry up over the next two weeks. The local market reached 18mth high on price index yesterday while making new all-time high on accumulation (i.e. including dividend) index. Local market is trading at stretched multiples with declining yield and growth support. The drivers are all about improving growth and inflation outlook in US and China. China optimism has been clear since Q216 with US optimism starting in Q316 while Republican’s sweeping all layers of the government gave it another kick along in Q416. US Fed has played its part in raising rates and upgrading rate cycle outlook while confirming the improved economic and inflationary outlook. Global markets have run ahead of themselves and now setting up a pullback. Geopolitical risks in Middle East and flow on effects into Europe are more catalyst that may trigger the process. The main market in focus is the US and history shows that there is a substantial relationship in Q4 performance and January returns. US market returns and the Dec-end tax implications means that US fund managers have taken profit in January when Q4 performances were positive while risks were high. Since the GFC (i.e. 2008), every Q4 single digit return (i.e. S&P 500) in the

US has delivered the opposite return in January. And we are looking at a single digit Q4 positive return in 2016. 2010 and 2011 were the exceptions when Q4 returns were double digit and the market ran with the momentum in January. In the last decade US markets have only delivered all positive quarters in 2 years (i.e. 2013 and 2014) and both times we had profit taking in the following January. We are in line to deliver 4 positive quarters in 2016. Local markets have reached 5600 again and weakening local economic outlook and emerging market risk will weigh on the index. The local market is at the mercy of the overpriced US market and we expect that to start to unravel in early Jan as the US tax period ends in December. The stronger the bond yields, the stronger the USD, the more pressure will be on Emerging Markets to raise rates to keep capital&.that will lower the growth outlook for Emerging Markets and their demand for commodities. China could throw in another curve ball by devaluating the Yuan further. We are sitting on declining stimulus hope, historically high commodity prices, historically high USD, potentially higher rates, historically low volatility indices, rising long bond yields, rising inflation and low corporate growth outlook&it can’t stay in this equilibrium&something has to give sooner or later&when everything positive is being priced in and everything negative is being ignored, risk in the market rises&it may have a delayed effect as the US tax cycle ends in Dec&pullback looks very likely in the next three weeks in the US&and for the local markets there is collateral damage!!!

The global markets are in an “Inflation Rally” as US and China data continues to beat expectations while Oil recovers on OPEC deal. Markets have run ahead of themselves and short term shallow retracement is expected in the next three weeks!!! Volatility is heading to all-time lows...trend is not positive for markets&looks like the calm before the storm!!! Interesting moves of the day& (1) (2) (3) (4) (5) (6)

AYS (+5%) on bargain hunters returning to the growth in beaten up telco sector IPD (+4%) on bargain hunters returning to the growth in beaten up health care sector MSB (+2%) on deal with global pharma to drive more growth PDN (-5%) despite positive outlook after US president elect calls for more nuclear weapons PLS (-5%) as market takes profit in resource sector ahead of long weekend FMG (-4%) on weaker Iron Ore and market taking profit in resources Page 2



Aussie market declining forward yield premium > Rising bond yields are driving the decline in yield premium as stretched multiples test low growth outlook 8.00

8000

6.00

7000

4.00

6000

2.00

5000

0.00

4000

-2.00

3000

-4.00 Mar-03

2000 Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Earnings Yield Premium to Bond Yield

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Dividend Yield Premium to Bond Yield

Mar-14

Mar-15

Mar-16

Market Price Index - LHS

Aussie market valuation > Stretched on forward PE bands&but can go a bit more higher 9000 8000 7000 6000 5000 4000 3000 2000 1000

Aussie market growth > forward ROE still in decline 26.00 24.00 22.00 20.00 18.00 16.00 14.00

Aussie market growth > forward EPS growth outlook pulls back Page 3



30.00

25.00

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Aussie market div yield > premium to bond yield in decline 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00

Forward Dividend Yield

10Year Bond Yield

Average DY

Average BY

Aussie market momentum > earnings revision moves into negative 20.00 15.00 10.00 5.00 0.00 -5.00 -10.00 -15.00 -20.00

3mth Avg Earnings Revision

3mth Price Momentum

MEDIA SECTOR > Global media M&A and local regulatory changes should keep local old media in play&.NWS, FXJ, NEC, APN look interesting!!!

OIL SECTOR > OPEC deal to reduce supply&even if you don’t believe reduction, it does curtail the growth in supply. Oil became a buy when it went below $40 and bounced in August&.We maintain positive view on WPL and cashed up small caps like AWE and KAR. Shale in US does Page 4



cap the upside&.and will drive the sector into oversupply when oil goes above $60. Oil sector is a buy near $40-$45 and will see profit taking near $55-$60 in the short to medium term!!!

GLOBAL MINERS > Global miners are churning out cash and now back into the dividend cycle. Positive news for mining services!!!

MINING SERVICES > Services sector remains in M&A play as recovery starts to come through with improving cash flow in the mining sector&.ANG, DCG, GNG, RCR et al starting to look interesting&.ANG’s recent trading update confirms our positive view&have raised at 16 cents to cater for rising working capital requirements&watch this space!!!

AMAZON IS COMING > Discretionary retailers, Supermarkets and high margin specialty retailers better get ready&it’s the Netflix of retailers. JBH and HVN are in for serious pain. WES and WOW are going to lose more margin and the turnaround will take longer. Specialist retailers like SUL, PMV and KMD have brand protection&.but low cost competitors are coming via Amazon. Big W and Target are going to get attacked while K Mart and TRS will get hurt despite the improved model.

SUPERMARKETS > Price wars and market share defence will cost margins for everyone in the sector. More global/online players coming into the market in 2017. MTS pricing in too much optimism in hardware while WOW recovery will take longer than expected.

ECB Debacle > Brexit in play&Italian referendum and Austrian election on Dec 4th with French, German etc. elections in 2017&there is more road blocks for recovery with a substantial risk of EU breaking up needs to be priced in. US Fed rates outlook will get very flat if Italy plays hard ball&and 2017 may be further flattened out if French/German protectionism breaks down EU all together.

GOLD SECTOR > As we have been telling clients for a number of months&.Iron Ore became a buy when it bounced above $50&.Oil became a buy when it went below $40 and bounced&.Gold has fallen below $1200 and we expect it to bounce back above $1200 to confirm our positive view again¯o risk building up in 2017!!!

Housing Bubble > We maintain our view from early 2014 that housing bubble will start to roll over in late 2016 with oversupply in apartments and developer financing issues!!! RBA supports our view and warned that the bank profits may be hit and yields may suffer. The alarm bells are ringing on property market&bond yields and interest rates are going up, government budget needs more taxes to keep the bogus 2020/21 budget balance in play, historical high household debt, historical low wages, growth, unemployment, declining rent, oversupply of apartments, SMSF regulatory changes and China further tightening capital outflows!!!

Federal government is already in trouble in multiple policy areas®ulatory risk in number of sectors are rising&.we have already seen banks, super, education, aged care, salary packaging take a hit&.what more could be on the bash list > tourism, retail, supermarket, gambling, energy retailers, asset managers and construction are a few areas to keep an eye on as cross bench takes charge from weak government!!!

Main Thematics > central banks, stimulus, rate cycle, yield, currency, safety, global diversification, demographic changes, Asian middle class

Preferred Sectors > Banks, Miners, Energy, Gold, Specialty Consumer, Tourism, Small Cap Industrials, MITCH (i.e. Media, Information, Telco, Consumer and Health) Take Profit Sectors > Residential Property, Domestic Consumer Sectors, Discretionary Retail, Supermarkets, Infrastructure, Utilities

Best picks, stock level information, sector breakdown and performance analysis starts on page 8. The stock ideas of the day are EPD for growth / tech, IFM for growth / US / tech thematic, PNV for growth / biotech and ANG for growth / resources / services thematic. Page 5



MARKET MACRO SUMMARY We maintain our long term bull market view from 2012. It was based on weakness in interest rates, currency, economic growth, commodities and government policy while asset prices and dividend yield thematic will be the key positive drivers. Global investors looking for yield are likely to react in line with AUDUSD.

Currency to pull back to high 60’s in the back end of 2017 with local economic slowdown, recovering US and China slowdown.

Tidal wave of unemployment to push it up to 6.0% in 2016H2 and above 6.5% in 2017.

Consumer sentiment expected to remain low into 2017 due to underemployment, property bubble, falling disposable income and government policy backflips.

Property bubble in the making in parts of Australia and that will eventually come back to bite margin loan unit investors.

Strong currency and economic woes will drive RBA to cut interest rates down to 1.25% in 2017&next cut in 2017H1

Investors after solid return to cover rising costs will chase equity dividend yield over fixed interest investments.

Global economy is expected to experience more growth downgrades, currency wars and stimulus plans.

Iron Ore and Oil price to average below $60 over the next 12mths.

For more customised service or further macro views, please contact Baillieu Holst or refer to the latest edition of “Equity Engineer” publications.

INVESTMENT MOTTO: “Life is all about cycles. You evolve with the cycle or the cycle runs over you.”

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AROUND THE GROUNDS

Source – www.money.cnn.com

US FEAR AND GREED INDEX

Source – www.money.cnn.com

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TRADING IDEA OF THE DAY

Empired (EPD) – Baillieu Holst Industrial Analyst Josh Kannourakis has BUY rating and $0.65 price target. Investment view: EPD exhibited markedly improved operational performance in the 2H with underlying margins at or above historical achievements, supporting the one-off nature of 1H16 events. Improved utilisation rates from contracted works and a strong tender pipeline should support strong YoY growth (~10%) with an improved margin for safety. Valuation remains compelling with EPD trading on an FY17F EV/EBITDA multiple of 4.9x, which represents a 35% discount to the sector (FIG.1). Our applied valuation multiple includes a 20% discount to the sector and will be removed as EPD delivers improved performance. We upgrade our target price to $0.65 (prev. 0.55) and maintain our BUY recommendation.

CHART IDEA OF THE DAY

Infomedia (IFM) – Baillieu Holst Industrial Analyst Nicolas Burgess has BUY rating and $0.85 price target. Investment view: IFM has moved quickly to address bottlenecks in its sales and delivery capability. As these continue to unwind, it should see an improving growth outlook. Indeed, IFM expects its monthly recurring revenue growth to increase from 5% to 10%+ by June 2017. The Nissan contract win provides support to these growth expectations and validation of the Superservice product. Meanwhile, the company remains well capitalised with net cash of $14.7m at 30 June. We retain a BUY rating.

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FRIDAY’S BIOTECH IDEA OF THE DAY (HIGH RISK)

PolyNovo (PNV) – Baillieu Holst Industrial Analyst Nick Caley has BUY rating and $0.60 price target. Investment view: BUY retained with DCF valuation of A$0.60 (prev. A$0.49) and price target of A$0.60 (prev. A$0.50). We have rolled forward to our FY17 valuation. The decision to go it alone in the US underlines PNV’s confidence in a successful commercialisation of the product which appears to be imminent. Our analysis continues to point to the competitive advantages of BTM in terms of functionality, cost effectiveness and absence of imported infections.

MINI CAP GROWTH IDEA OF THE DAY (HIGH RISK)

Austin Engineering (ANG) – ANG is involved in the manufacture, repair, overhaul and supply of mining attachment products, general steelwork structures and other associated products and services for the industrial and resources-related business sectors. The company has Australian manufacturing facilities in Brisbane, Perth, Mackay and Muswellbrook, overseas in the America state Wyoming through its subsidiary Western Technology Services (Westech), Austin Ingenieros Chile, Austin Ingenieros Colombia, Austin Engineering Peru and Austin Engineering Indonesia. In addition, a joint venture operation in the Middle East provides ANG with a manufacturing facility in Oman. ANG products and services include JEC Mining & Earthmoving Products, Westech and TAE Truck Bodies Equipment Repair and Maintenance Services. JEC's product range covers: off-highway dump truck bodies, excavator buckets, wheel loader, attachments, water tanks, lubrication service & fuel modules, tyre handling equipment, specialised products & fabrication, specialised machining & line boring and cooling systems.

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Stock Performance Breakdown MARKET MOVERS AND SHAKERS

MAJOR SECTOR PERFORMANCES OVER THE DAY

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TODAY’S TOP 30 WINNERS AND LOSERS IN S&P 300 Code AYS AJX LNG IPD OFX ALU VRT MSB FET NTC CSV GMG SDA AIA SCG AMA MGR MGC FXJ FSF EML VVR INM CMW APN MYR ANN AGI DXS RFF

Company Name Amaysim Australia Alexium International Liquefied Natural Impedimed Limited Ozforex Group Ltd Altium Limited Virtus Health Ltd Mesoblast Limited Folkestone Edu Trust Netcomm Wireless CSG Limited Goodman Group Speedcast Int Ltd Auckland Internation Scentre Grp AMA Group Limited Mirvac Group Mg Unit Trust Fairfax Media Ltd Fonterra Share Fund Emerchants Ltd Viva Energy REIT Iron Mountain Inc Cromwell Prop APN News & Media Myer Holdings Ltd Ansell Limited Ainsworth Game Tech. Dexus Property Group Rural Funds Group

Code

Company Name

PDN PLS FMG GOR ADH MLX MNS EHE TTS AHY CDD MYX SWM VTG SFR SAR MLD WSA FPH CCP RIO ISU BHP SXL EWC JBH HFR SVW QBE A2M

Paladin Energy Ltd Pilbara Minerals Limited Fortescue Metals Grp Gold Road Res Ltd Adairs Limited Metals X Limited Magnis Resource Ltd Estia Health Ltd Tatts Group Ltd Asaleo Care Limited Cardno Limited Mayne Pharma Ltd Seven West Media Ltd Vita Group Ltd Sandfire Resources Saracen Mineral MACA Limited Western Areas Ltd Fisher & Paykel H. Credit Corp Group Rio Tinto Limited Iselect Ltd BHP Billiton Limited Sthn Cross Media Energy World Corpor. JB Hi-Fi Limited Highfield Res Ltd Seven Group Holdings QBE Insurance Group The A2 Milk Company

Market Cap ($m)

Price ($)

341.28 172.16 327.70 354.38 396.00 1010.47 483.87 536.22 618.31 307.29 227.01 12702.76 790.77 7419.26 23799.61 473.69 7928.94 176.18 1989.05 700.83 432.97 1635.66 2145.85 1723.72 830.23 1125.15 3538.74 685.35 9389.09 359.73

1.96 0.60 0.67 0.98 1.70 7.98 6.17 1.44 2.54 2.15 0.73 7.25 3.40 6.36 4.56 1.02 2.18 0.88 0.88 5.88 1.80 2.41 45.16 1.00 2.74 1.39 24.35 2.10 9.84 1.76

Market Cap ($m)

Price ($)

131.89 611.48 18807.34 479.03 276.18 347.32 346.50 569.55 6681.76 785.25 467.60 2062.30 1206.43 496.94 910.14 682.02 395.88 824.87 4681.42 847.63 25489.72 430.57 80741.91 1153.52 450.88 3182.79 427.23 2258.36 17419.20 1438.90

0.07 0.46 5.77 0.53 1.61 0.55 0.75 2.41 4.42 1.38 0.95 1.35 0.78 3.19 5.63 0.83 1.66 2.96 8.06 17.50 58.77 1.81 24.63 1.47 0.26 27.30 1.31 7.88 12.47 1.98

Daily Price Change (%) 5.11 4.39 3.91 3.70 3.03 2.84 2.49 2.49 2.42 2.38 2.11 2.11 2.10 2.09 2.01 2.00 1.87 1.74 1.73 1.73 1.70 1.69 1.57 1.53 1.48 1.46 1.46 1.45 1.44 1.44

Consensus Target Price ($) 2.44 1.00 12.00 2.53 1.85 9.17 7.85 2.24 2.72 3.94 1.00 7.45 4.90 4.18 4.74 1.33 2.26 1.22 0.94 6.76 2.34 2.62 55.50 0.99 3.72 1.28 23.07 2.07 9.06 1.71

Daily Price Change (%) -5.19 -5.15 -4.47 -3.64 -3.60 -3.51 -3.25 -3.21 -2.86 -2.83 -2.56 -2.54 -2.50 -2.45 -2.43 -2.37 -2.35 -2.31 -2.30 -2.23 -2.20 -2.16 -2.03 -2.00 -1.92 -1.90 -1.88 -1.87 -1.81 -1.74

Consensus Target Price ($) 0.16 0.83 5.28 0.88 2.15 1.31 1.50 2.69 4.33 1.69 0.65 1.77 0.77 4.71 6.00 1.35 1.82 2.73 7.79 19.03 65.65 1.61 25.60 1.35 0.80 30.64 1.93 6.60 12.87 2.32

Consensus Rating

2016 PE

2017 PE

Buy Strong Buy Buy Strong Buy Buy Hold Buy Hold Buy Buy Hold Buy Buy Underperform Hold Buy Buy Hold Hold Hold Buy Buy Buy Underperform Buy Hold Hold Hold Hold Strong Buy

17.30 -13.52 -3.33 -14.70 16.50 35.56 14.79 -6.42 18.11 186.96 9.42 18.09 20.26 38.46 20.00 27.57 16.75 12.03 14.33 12.07 94.47 47.25 30.39 11.20 14.20 15.26 18.48 13.08 17.40 7.73

12.95 28.33 N/A -13.80 17.71 27.03 14.38 -6.52 16.82 537.50 9.67 16.98 12.68 33.68 19.08 20.82 15.35 14.34 14.67 11.41 32.64 17.99 26.60 12.13 12.18 14.95 16.72 15.33 17.32 13.54

Consensus Rating

2016 PE

2017 PE

Hold Buy Hold Buy Buy Buy Buy Underperform Hold Buy Hold Buy Hold Buy Hold Buy Strong Buy Hold Underperform Buy Hold Buy Hold Hold Buy Buy Buy Hold Buy Buy

-2.52 -36.80 16.22 -58.94 9.99 16.79 -39.21 8.46 24.31 11.96 43.70 26.17 5.61 14.72 15.61 24.15 15.96 -37.72 34.24 18.25 17.02 39.78 95.73 14.52 N/A 18.77 -177.95 17.58 17.17 47.37

-3.90 -65.71 7.02 -44.17 12.35 12.22 -43.82 11.93 24.42 11.46 38.00 16.60 7.50 12.32 13.28 7.57 12.67 80.00 28.87 14.82 13.56 20.57 16.44 12.35 N/A 15.46 -59.32 15.10 13.83 27.05

2016 EPS GROWTH 121.57 98.53 -168.46 -70.94 1.15 26.65 3.93 22.70 7.06 -17.86 10.00 7.81 3.01 22.97 1.84 23.33 6.47 N/A -0.68 82.75 -15.56 N/A -11.34 6.10 -52.07 -22.86 -19.88 -6.38 1.21 150.40

2017 EPS GROWTH 33.63 147.73 100.00 -6.50 -6.80 31.56 2.81 1.54 7.66 -65.22 -2.60 6.57 59.72 14.19 4.82 32.43 9.08 -16.15 -2.28 5.81 189.47 162.75 14.23 -7.72 16.58 2.09 10.53 -14.64 0.41 -42.88

2016 Div Yield 4.11 0.00 0.00 0.00 4.49 2.45 4.61 0.00 5.24 0.00 12.41 3.31 2.47 2.60 4.65 2.50 4.56 8.31 4.61 6.44 0.00 2.12 5.58 8.13 1.79 3.75 2.31 4.91 4.42 4.88

2017 Div Yield 5.22 0.00 0.00 0.00 4.06 2.81 4.86 0.00 5.55 0.00 10.62 3.52 3.29 2.96 4.85 2.94 4.68 7.31 4.55 6.48 0.00 5.56 6.12 8.14 3.94 4.24 2.65 4.29 4.56 5.28

N/A N/A Appendix 3Y - Change of Directors Interest Notice N/A N/A N/A N/A Mesoblast inks deal with global pharma company N/A Director Appointment/Resignation N/A Change in substantial holding N/A AIA November 2016 Monthly Traffic Update N/A N/A N/A N/A N/A N/A N/A Viva Energy REIT (VVR) Year End Timetable 2016 N/A N/A N/A Myer response to Writ N/A N/A N/A N/A

2016 EPS GROWTH 58.19 N/A 111.84 28.73 24.55 -64.91 -17.30 27.74 0.64 -9.92 123.54 163.29 -12.56 74.26 -36.89 -15.90 -60.83 -135.13 26.42 15.05 -0.01 -36.36 -86.83 10.27 N/A 12.23 78.27 -28.90 -15.92 N/A

2017 EPS GROWTH 35.26 44.00 130.94 -33.45 -19.09 37.40 10.53 -29.12 -0.45 4.35 14.99 57.58 -25.18 19.54 17.55 219.02 25.96 147.15 18.63 23.19 25.56 93.41 482.31 17.53 N/A 21.44 -200.00 16.47 24.16 75.10

2016 Div Yield 0.00 0.00 1.51 0.00 6.65 5.45 0.00 11.75 3.88 6.84 0.00 0.00 9.69 4.35 1.80 0.00 4.82 0.03 1.92 2.76 2.95 0.98 1.65 4.54 N/A 3.48 0.00 5.05 4.31 0.08

2017 Div Yield 0.00 0.00 5.04 0.00 6.54 1.27 0.00 6.02 3.91 7.13 0.00 0.00 8.72 5.14 2.24 1.45 5.42 0.30 2.35 3.34 3.87 0.88 3.61 5.31 N/A 4.18 0.00 5.08 4.75 1.06

N/A Cleansing Notice and Appendix 3B N/A N/A N/A N/A N/A Change in substantial holding Tatts Group rejects Pacific Consortium bid Change in substantial holding N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Daily share buy-back notice - Appendix 3E N/A N/A N/A N/A N/A N/A N/A A2M NZ Filing: Becoming a substantial holder

Newsflash

Newsflash

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CHECKING S&P 300 BY THE SECTOR

Energy stocks: OPEC supply deal driving sector uncertainty&.Even without an OPEC deal, long term dynamics were pointing toward a supply/demand match in 2017/18&now OPEC deal expected to keep it range bound $40$60!!!

News Snippet:

Code LNG ORG WPL STO CTX OSH SEH SXY WOR KAR BPT AWE FAR WHC PDN

Coal Outlook – Coal's recovery was one of the biggest surprises in commodities this year, but it's all poised to end as output rises from China, producer of half the world's supply. After half a decade of declines, European prices rebounded more than 80 per cent as China, also the world's biggest consumer of the fuel, boosted imports. Benchmark month-ahead contracts will fall by more than 25 per cent by the end of next year, according to the median in a Bloomberg survey of six analysts and traders. Just as Chinese policy limiting mining days kick-started the rally, a gradual boost in domestic output during autumn will accelerate a slide, according to analysts. Once seasonal winter demand in the northern hemisphere is over, China will need less imports at the same time as abundant output by other producers will keep a lid on prices from Australia to Antwerp. "The market is going to be determined by whatever the Chinese are going to do," said Thomas Pugh, a commodities economist at Capital Economics in London, who predicted a price of $US60 in the survey. "Everything else fades into the background." Forecasts ranged from $US57.50 to $US75 a ton, with the median at $US60. Month-ahead fuel for delivery to Amsterdam, Rotterdam or Antwerp was little changed at $US82.75 in Wednesday morning in London. Coal at Australia's Newcastle port, as well as front-month futures on China's Zhengzhou Commodity Exchange, are up more than 70 per cent this year. AFR

Oil Outlook – Oil prices are set to recover next year as OPEC fulfils its agreement to cut output, halting the slump that battered the global oil industry, Saudi Arabia's energy minister said. The kingdom sees no need for additional production cuts on top of the curbs pledged in recent weeks by OPEC and 11 other oil-producing countries, Khalid AlFalih said at a ceremony to announce the annual budget in Riyadh. The intervention is intended only to "nudge along" the re-balancing of an oversupplied global oil market, he said. "I'm very optimistic that next year will see economic recovery and a recovery of oil markets," Al-Falih said. Prices, unsustainable at current levels, will also need to rise to encourage investment in the new supplies needed in coming years, he said. Crude will balance somewhere between $US50 and $US100 a barrel, he said. Investment in the world's oil industry has fallen for three consecutive years amid a slump in prices, leading to the lowest level of discoveries in five decades, according to the International Energy Agency. The Organisation of Petroleum Exporting Countries, working in concert with other producers such as Russia, has resolved to reduce output to clear a persisting oil glut and revive prices. "Markets worldwide are leaving a contraction period and a period of low oil prices and reduced investment in the sector," Al-Falih said. The minister anticipates that crude prices will increase "tangibly" in 2017, he said in an interview with Al Arabiya television. The kingdom expects its oil revenue to climb by 46 per cent to 480 billion riyals ($US128 billion) next year, the Finance Ministry said in a budget statement. Benchmark Brent crude traded at about $US55 a barrel in London on Thursday. Saudi Arabia is assuming that prices stay at $US55 next year and advance to $US61 in 2018, according to Al Arabiya. AFR

Uranium Outlook – President-elect Donald Trump said the US should enlarge its nuclear arsenal, an apparent reversal of a decades-long reduction of the nation's atomic weaponry that came hours after Russian President Vladimir Putin said his country's arsenal should also be strengthened. "The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to it senses regarding nukes," Trump said in a Twitter post. Putin said in a speech earlier on Thursday in Moscow that his country should also bolster its nuclear forces: "We need to enhance the combat capability of strategic nuclear forces, primarily by strengthening missile complexes that will be guaranteed to penetrate existing and future missile defence systems," he said. Global X Uranium ETF rose to a session high after Trump's comments while Uranium Resources, a Colorado-based mining company, climbed as much as 27 per cent before trimming gains. President Barack Obama has both reduced the US nuclear arsenal, in an agreement early in his presidency with Russia, and sought to modernise it to replace thousands of bombs and missiles. His modernisation plan - which the Arms Control Association said would cost as much as $US1 trillion over 30 years - has come under criticism from proponents of denuclearisation, who warn it may prompt a new arms race with Russia and China. More broadly, Trump has said he will seek to enlarge the US military, including by building dozens of new ships for the Navy, while controlling costs. AFR

Company Name Liquefied Natural Origin Energy Woodside Petroleum Santos Ltd Caltex Australia Oil Search Ltd Sino Gas Energy Senex Energy Limited WorleyParsons Ltd Karoon Gas Australia Beach Energy Limited AWE Limited FAR Ltd Whitehaven Coal Paladin Energy Ltd

Market Cap ($m)

Price ($)

327.70 11178.19 26452.77 7965.60 7941.68 10552.26 228.18 305.91 2405.29 441.23 1538.70 324.82 312.31 2729.28 131.89

0.67 6.44 31.68 3.95 30.60 6.96 0.11 0.27 9.76 1.79 0.82 0.61 0.07 2.62 0.07

Daily Price Change (%) 3.91 1.10 0.89 0.77 0.49 0.43 0.00 0.00 0.00 -0.56 -0.61 -0.81 -1.43 -1.50 -5.19

Consensus Target Price ($) 12.00 6.38 30.91 4.66 34.70 8.22 0.25 0.28 8.29 2.58 0.67 0.64 0.17 2.81 0.16

Consensus Rating

2016 PE

2017 PE

Buy Hold Hold Hold Buy Hold Buy Hold Hold Buy Hold Hold Buy Hold Hold

-3.33 26.90 22.43 286.04 15.49 62.13 -27.50 39.47 15.40 -23.49 38.89 -4.09 -34.50 196.50 -2.52

N/A 21.76 18.52 19.59 14.19 24.71 36.67 N/A 17.59 -22.88 13.02 -26.52 -34.50 6.97 -3.90

2016 EPS GROWTH -168.46 -54.84 -13.76 -81.48 -15.10 -65.66 -0.91 98.94 -21.87 54.33 -71.01 -344.17 -0.39 147.51 58.19

2017 EPS GROWTH 100.00 23.63 21.16 1360.00 9.11 151.41 175.00 -100.00 -12.41 -2.63 198.81 84.56 0.00 2720.01 35.26

2016 Div Yield 0.00 2.04 3.66 0.75 3.36 0.73 0.00 0.00 0.00 0.00 0.61 0.00 0.00 0.00 0.00

2017 Div Yield 0.00 0.23 4.25 10.57 3.67 1.58 0.00 0.00 0.16 0.00 1.46 0.00 0.00 0.76 0.00

Newsflash Appendix 3Y - Change of Directors Interest Notice Appendix 3B N/A Securities Trading Policy N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Material (Ex Mining) stocks: Sector looks stretched with investors chasing safe yield, but the growth outlook in chemicals are showing value after recent pullback. Sector back in “selective buy” area.

News Snippet: Page 12

Aussie Afternoon Institutional Market Wrap 23 December 2016 Code AJX TFC BKW JHX AMC ORA FBU PGH IPL NUF BLD ABC CSR DLX ORI HFR

None

Company Name Alexium International TFS Corporation Ltd Brickworks Limited James Hardie Indust Amcor Limited Orora Limited Fletcher Building Pact Group Hldgs Ltd Incitec Pivot Nufarm Limited Boral Limited Adelaide Brighton CSR Limited Duluxgroup Limited Orica Limited Highfield Res Ltd


Market Cap ($m)

Price ($)

172.16 647.73 1995.04 9605.94 17337.37 3607.99 7099.47 2004.87 6073.81 2435.35 6354.04 3449.66 2280.25 2448.38 6714.74 427.23

0.60 1.68 13.53 22.00 15.07 3.00 10.24 6.70 3.59 9.08 5.39 5.28 4.49 6.23 17.59 1.31

Daily Price Change (%) 4.39 1.20 1.12 0.96 0.67 0.33 0.10 0.00 -0.28 -0.55 -0.55 -0.56 -0.66 -0.95 -1.46 -1.88

Consensus Target Price ($) 1.00 3.25 14.70 21.14 16.03 3.12 9.34 6.73 3.38 9.18 5.92 5.25 3.98 6.21 15.67 1.93

Consensus Rating

2016 PE

2017 PE

Strong Buy Strong Buy Hold Hold Buy Buy Hold Hold Buy Hold Hold Hold Hold Hold Hold Buy

-13.52 31.30 14.21 30.26 21.29 23.02 18.98 21.09 21.14 24.17 17.13 17.54 14.00 18.65 16.83 -177.95

28.33 25.45 13.23 27.69 18.59 20.55 16.08 18.46 19.51 17.84 16.33 16.92 12.20 17.85 16.98 -59.32

2016 EPS GROWTH 98.53 -12.97 19.22 18.62 -7.07 18.84 7.41 7.85 -28.24 -1.66 10.27 -2.18 23.34 8.76 -10.97 78.27

2017 EPS GROWTH 147.73 22.98 7.42 9.29 14.56 12.02 18.09 14.24 8.37 35.46 4.91 3.65 14.72 4.49 -0.87 -200.00

2016 Div Yield 0.00 1.79 3.47 2.50 3.55 3.02 3.60 3.11 2.50 1.17 3.81 5.17 5.14 3.83 3.08 0.00

2017 Div Yield 0.00 1.79 3.75 2.49 4.05 3.33 3.97 3.58 2.95 1.51 4.10 5.19 5.55 3.98 3.04 0.00

Newsflash N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Gold stocks: Global risks keeps Spot gold in play. Sector remains the best commodity pick with upgrade cycle&profit taking was due to strengthening USD&but macro market issues will drive the next leg up!!!

News Snippet:

None

Code

Company Name

DRM OGC EVN NCM RRL AQG RSG BDR PRU SBM WGX DCN NST SAR MLX GOR

Doray Minerals Ltd OceanaGold Corp. Evolution Mining Ltd Newcrest Mining Regis Resources Alacer Gold Corp. Resolute Mining Beadell Resource Ltd Perseus Mining Ltd St Barbara Limited Westgold Resources Ltd Dacian Gold Ltd Northern Star Saracen Mineral Metals X Limited Gold Road Res Ltd

Market Cap ($m)

Price ($)

149.91 2120.07 2922.73 13793.58 1282.54 172.53 766.46 243.24 313.57 885.25 440.25 280.87 1909.72 682.02 347.32 479.03

0.43 3.50 1.75 18.08 2.56 2.02 1.04 0.23 0.31 1.78 1.44 1.90 3.14 0.83 0.55 0.53

Daily Price Change (%) 1.19 0.86 0.57 0.50 0.00 0.00 0.00 0.00 0.00 -0.28 -0.35 -1.04 -1.26 -2.37 -3.51 -3.64

Consensus Target Price ($) 0.66 5.46 2.53 22.75 3.33 4.26 1.99 0.50 0.70 2.88 0.45 3.12 4.27 1.35 1.31 0.88

Consensus Rating

2016 PE

2017 PE

Buy Buy Buy Hold Hold Hold Buy Buy Buy Buy Strong Buy Buy Hold Buy Buy Buy

8.59 12.24 12.00 32.00 11.79 22.28 5.70 4.60 -25.48 6.45 23.61 -30.06 11.22 24.15 16.79 -58.94

15.74 7.73 8.79 17.11 9.81 79.23 4.58 3.29 -15.25 5.96 N/A -40.43 8.75 7.57 12.22 -44.17

2016 EPS GROWTH -45.65 29.44 34.42 -10.62 31.97 -58.05 97.65 453.36 -110.75 243.75 7.02 85.93 21.19 -15.90 -64.91 28.73

2017 EPS GROWTH -45.45 58.45 36.47 86.99 20.24 -71.88 24.38 40.00 -67.08 8.36 N/A 25.64 28.33 219.02 37.40 -33.45

2016 Div Yield 0.00 1.45 1.36 0.39 3.94 0.00 0.48 0.87 0.00 0.00 0.00 0.00 2.13 0.00 5.45 0.00

2017 Div Yield 0.00 1.33 2.11 1.28 5.23 0.00 1.73 0.87 0.00 0.00 N/A 0.00 3.28 1.45 1.27 0.00

Newsflash N/A N/A N/A N/A N/A N/A N/A Becoming a substantial holder N/A N/A SAU: Cannon 6th Processing Campaign Results N/A N/A N/A N/A N/A

Mining (Ex Gold) stocks: Miners to benefit from weaker USD and central bank stimulus. Sector now offering risky high beta small caps and safer cash churning big miners!!!

News Snippet:

Chinese Pollution and Iron Ore – Chinese steel and iron ore futures slumped more than 4 per cent on Thursday as a smog that engulfed northern cities of the country this week slowed trading activity. Iron ore for delivery to China's Qingdao port dropped $US3.04 or 3.8 per cent to $US76.15 a tonne on Thursday, according to Metal Bulletin, falling for a fifth straight day. The drop came despite some steel mills in the country receiving notices to resume sintering and blast furnace operations having returned to normal, Metal Bulletin said in a note. The smog has thinned in some parts including in the port city of Tianjin, but traders say many steel mills exercised caution on worries that air pollution may worsen again in the next few days. The most-active rebar on the Shanghai Futures Exchange closed down 4.2 per cent at 3026 yuan ($US436) a tonne. On the Dalian Commodity Exchange, iron ore dropped 4.4 per cent to end at 542.5 yuan a tonne. It fell as far as 541.50 yuan, its weakest since November 22. Both commodities have lost at least 15 per cent since hitting nearly three-year highs last week. They gained marginally on Wednesday after a fiveday slide. Some mills were starting to purchase iron ore again with the smog easing on Thursday, but they are still cautious about the weather, said a trader based in Tianjin. "If this weekend the smog returns then mills will stop or limit production again," he said. AFR

Code

Company Name

S32 GXY LYC ILU MIN SYR BSL IGO AWC OZL ORE SGM BHP RIO WSA SFR MNS FMG PLS

South32 Limited Galaxy Resources Lynas Corporation Iluka Resources Mineral Resources. Syrah Resources BlueScope Steel Ltd Independence Group Alumina Limited OZ Minerals Orocobre Limited Sims Metal Mgmt Ltd BHP Billiton Limited Rio Tinto Limited Western Areas Ltd Sandfire Resources Magnis Resource Ltd Fortescue Metals Grp Pilbara Minerals Limited

Market Cap ($m)

Price ($)

14374.16 907.11 246.46 2947.65 2199.55 778.08 5354.42 2434.80 5241.32 2403.48 885.45 2576.62 80741.91 25489.72 824.87 910.14 346.50 18807.34 611.48

2.73 0.50 0.07 7.03 11.73 2.92 9.23 4.10 1.80 7.81 4.15 12.86 24.63 58.77 2.96 5.63 0.75 5.77 0.46

Daily Price Change (%) 1.11 1.01 0.00 -0.14 -0.26 -1.02 -1.07 -1.20 -1.37 -1.39 -1.43 -1.46 -2.03 -2.20 -2.31 -2.43 -3.25 -4.47 -5.15

Consensus Target Price ($) 2.97 0.55 0.09 6.96 12.12 7.10 9.98 4.00 1.77 7.52 4.96 10.55 25.60 65.65 2.73 6.00 1.50 5.28 0.83

Consensus Rating

2016 PE

2017 PE

Hold Buy Buy Hold Buy Buy Buy Hold Hold Hold Buy Hold Hold Hold Hold Hold Buy Hold Buy

114.58 -125.00 -2.41 -439.38 18.73 -76.84 18.05 72.25 38.43 22.70 -19.71 69.89 95.73 17.02 -37.72 15.61 -39.21 16.22 -36.80

10.76 14.29 11.67 31.67 13.27 -28.91 10.37 43.16 18.15 18.64 53.90 23.73 16.44 13.56 80.00 13.28 -43.82 7.02 -65.71

2016 EPS GROWTH -86.73 -166.67 22.67 -107.66 15.08 30.91 140.06 -84.05 -48.55 -20.38 -191.82 -61.70 -86.83 -0.01 -135.13 -36.89 -17.30 111.84 N/A

2017 EPS GROWTH 964.43 975.00 120.69 1487.50 41.12 -165.79 74.05 67.40 111.76 21.80 136.56 194.57 482.31 25.56 147.15 17.55 10.53 130.94 44.00

2016 Div Yield 0.19 0.00 0.00 1.69 1.82 0.00 0.89 0.28 4.82 1.60 0.00 1.54 1.65 2.95 0.03 1.80 0.00 1.51 0.00

2017 Div Yield 4.19 0.00 0.00 2.80 3.94 0.00 1.24 0.85 5.59 1.91 0.00 2.27 3.61 3.87 0.30 2.24 0.00 5.04 0.00

Newsflash N/A N/A N/A N/A N/A N/A N/A N/A N/A Daily share buy-back notice - Appendix 3E N/A N/A N/A N/A N/A N/A N/A N/A Cleansing Notice and Appendix 3B

Industrial stocks: Value beginning to show after recent pullback with selective exposures worth looking into. Sector in selective buy in unique service sectors.

News Snippet:

None

Page 13

Aussie Afternoon Institutional Market Wrap 23 December 2016 Code AIA MQA MND AZJ SPO BXB SSM CWY QUB RWC QAN SYD DOW CIM GWA TOX SEK SIQ RCR TCL ALQ IPH PRG SGF CAB MMS ASB SIV SVW MLD CDD

Company Name Auckland Internation Macq Atlas Roads Grp Monadelphous Group Aurizon Holdings Ltd Spotless Grp Hld Ltd Brambles Limited Service Stream Cleanaway Waste Man Qube Holdings Ltd Reliance Worldwide Corp Qantas Airways SYD Airport Downer EDI Limited CIMIC Group GWA Group Ltd Tox Free Solutions Seek Limited Smartgrp Corporation RCR Tomlinson Transurban Group Als Ltd IPH Limited Programmed SG Fleet Group Ltd Cabcharge Australia McMillan Shakespeare Austal Limited Silver Chef Limited Seven Group Holdings MACA Limited Cardno Limited

Market Cap ($m)

Price ($)

7419.26 2592.34 1024.78 10279.24 1054.36 19601.40 388.93 1853.43 3484.59 1627.50 6228.91 13521.45 2565.70 11115.43 754.89 477.11 5206.65 741.07 377.90 21612.25 2914.40 960.97 477.31 794.52 468.48 889.46 605.69 312.81 2258.36 395.88 467.60

6.36 4.94 11.00 5.04 0.97 12.40 1.07 1.17 2.41 3.11 3.38 6.02 6.05 34.31 2.86 2.46 14.95 6.09 2.69 10.53 5.75 4.98 1.84 3.11 3.85 10.54 1.71 8.54 7.88 1.66 0.95

Daily Price Change (%) 2.09 1.02 0.73 0.60 0.52 0.49 0.47 0.43 0.42 0.32 0.30 0.17 0.17 0.09 0.00 0.00 -0.13 -0.16 -0.37 -0.47 -0.52 -0.80 -0.81 -0.96 -1.03 -1.40 -1.44 -1.61 -1.87 -2.35 -2.56

Consensus Target Price ($) 4.18 5.60 7.58 4.80 1.29 13.78 1.13 1.06 2.55 3.15 3.97 7.07 4.88 26.32 2.74 2.59 15.59 6.25 3.12 11.53 5.78 6.99 1.92 4.51 3.43 12.10 1.56 10.64 6.60 1.82 0.65

Mathan Somasundaram – Baillieu Holst Quant Strategy [email protected] – 612 9250 8947 Consensus Rating

2016 PE

2017 PE

Underperform Buy Underperform Hold Hold Buy Strong Buy Buy Hold Hold Buy Buy Hold Underperform Hold Hold Hold Hold Strong Buy Buy Hold Buy Buy Buy Hold Hold Buy Buy Hold Strong Buy Hold

38.46 28.39 14.75 20.28 7.66 24.21 18.47 31.62 29.15 30.92 6.33 40.13 15.45 22.04 16.86 13.87 28.48 16.82 38.80 84.89 22.97 17.99 7.88 14.56 9.80 10.06 23.59 11.59 17.58 15.96 43.70

33.68 19.15 18.77 18.74 8.39 21.53 16.21 26.00 25.91 26.13 6.28 36.71 16.13 20.57 14.59 14.47 25.56 14.23 10.19 61.94 27.25 17.54 11.08 12.15 12.30 10.17 19.66 12.17 15.10 12.67 38.00

2016 EPS GROWTH 22.97 7.47 -35.02 -12.45 -1.82 -0.74 20.33 33.20 -17.83 N/A 69.11 37.91 -15.81 4.90 18.65 -2.31 -7.96 57.73 -75.06 53.99 -20.87 56.38 -6.06 29.14 -18.88 15.90 -44.09 47.14 -28.90 -60.83 123.54

2017 EPS GROWTH 14.19 48.28 -21.43 8.25 -8.73 12.49 13.91 21.62 12.49 18.32 0.76 9.33 -4.21 7.13 15.52 -4.17 11.45 18.23 280.77 37.05 -15.70 2.60 -28.91 19.85 -20.31 -1.10 20.00 -4.74 16.47 25.96 14.99

2016 Div Yield 2.60 3.79 5.33 4.83 8.70 2.68 2.31 1.61 2.15 0.00 0.74 5.15 3.89 2.94 4.79 3.69 2.37 3.81 1.81 4.32 2.38 4.64 7.60 4.40 5.03 5.89 2.34 4.55 5.05 4.82 0.00

2017 Div Yield 2.96 4.27 4.31 5.10 8.50 2.95 3.08 1.79 2.45 2.09 5.36 5.60 3.67 3.08 5.35 3.62 2.71 4.68 3.09 4.80 2.02 4.90 4.84 4.95 5.01 5.86 2.34 4.98 5.08 5.42 0.00

Newsflash AIA November 2016 Monthly Traffic Update N/A N/A N/A N/A N/A N/A N/A N/A N/A Daily share buy-back notice - Appendix 3E N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Consumer stocks: We maintain our preference to entertainment, media and gambling while we see substantial risk in discretionary retail sector. Media sector rule changes will drive M&A with smaller regional players becoming the target for industry consolidation. Sector mainly stuck in “selective buy” category after recent selloff.

News Snippet:

Seven West Media – The NSW Supreme Court has issued an injunction on a website naming and linking two high profile Seven West Media employees to the Tim Worner scandal. Justice Stephen Campbell said "the material is a flagrant and obvious case of defamation" when issuing the interlocutory injunction against the publication. The injunction will be in effect until the defamation case has been decided. However, if the plaintiffs take too long to bring on the case, the defendant may apply for dissolution. Seven West Media's lawyers, acting on behalf of the two highprofile employees, launched legal action against a website naming and linking them to the scandal. Amber Harrison, a former executive assistant at the network who had an affair with Mr Worner, alleged the chief executive had sexual relations with four other staff members, an allegation that Mr Worner has denied. Law firm Addisons sent letters to Fairfax Media, publisher of The Australian Financial Review, on behalf of the four women named by Ms Harrison and denied they had ever been involved in sexual or inappropriate activities with Mr Worner. The letters also threatened legal action if the women's names were made public. The defendant did not turn up to court on Friday morning after being served with regards to the matter. "The defendant has had a fair opportunity...he has chosen not to take that opportunity, " Justice Campbell said. The defendant been "deliberately defiant of the court's orders" he said, referring to court order on Wednesday. AFR

Shaver Shop – Share trading in personal grooming retailer Shaver Shop is under scrutiny after a significant share price slide in the lead-up to a sales downgrade. Shaver Shop chief executive Cameron Fox warned on Friday there had been weaker-than-expected sales in the past few weeks in "key gift giving product lines" while the closure of its Queensgate store in New Zealand after an earthquake had also reduced sales at the company. The downgrade and the spotlight on share trading in the past few days comes just six months after Shaver Shop listed on the Australian Securities Exchange after raising $98 million in a public float. The issue price of the shares had been $1.05, but by the close of trading on Thursday had been 82¢. The shares tumbled on Friday morning by more than 13 per cent to 71¢ as investors reacted harshly to the fall-off in sales. The biggest drop off in gift-giving products had occurred in the hair styling category for the retailer, which runs 100 stores across Australasia. Mr Fox said sales up until the end of November had been on track with its prospectus forecast and in line with previous guidance, but there had been weakness in December. This meant that Shaver Shop's forecast for retail sales for the month of December from its corporate stores was now likely to be between $26.5 million to $28 million, instead of the previous internal forecast of $29.5 million. The weakness in the hair styling category hadn't been able to offset strong sales in other segments such as men's electric shavers, long-term hair removal products and female beauty products. AFR

Tatts Group – Lotteries and wagering giant Tatts Group will reject the takeover offer from a Macquarie-led consortium and will retain its backing for Tabcorp's bid. Macquarie has a 10 per cent stake in the Pacific Consortium which includes private equity firm KKR (a 30 per cent stake), Morgan Stanley's infrastructure wing North Haven Infrastructure Partners (30 per cent) and local superannuation investor First State Super (30 per cent) – that pitched an offer for Tatts Group on December 14 worth $4.40 to $5 a share for Tatts. This compares with Tabcorp's November offer that valued Tatts at $4.34 a share. But Tatts said in statement on Friday that the Pacific bid "is predicated on a number of key assumptions that are either incorrect, inconsistent with Tatts' current expectations or unknown, and Tatts is unable to assess what impact, if any, these factors might have on the terms and conditions of the indicative proposal. "Even if the Pacific Consortium were to update its key assumptions with no consequential impact on its key terms and conditions, the Tatts board would still make the same determination given Tatts believes the total value offered is not superior to the proposed Tabcorp merger." The Pacific Consortium's plan was specifically aimed at getting Tatts' valuable lotteries business. The Consortium planned to float Tatts wagering business in a separate sharemarket vehicle, or sell it to a "strategic buyer". AFR

Page 14

Aussie Afternoon Institutional Market Wrap 23 December 2016 Code AMA FXJ APN MYR AGI CKF SKT SLK RFG AAD TME GUD WEB SKC WPP BAP TAH TEN CWN NEC SUL GXL DNA ARB CCV NWS FLT IVC TGA REA BRG PMV SGR TRS IEL AHG ALL KMD NVT HVN BBN GEM APO VRL MTR OML CTD DMP RCG JBH SXL ISU VTG SWM TTS ADH

Company Name AMA Group Limited Fairfax Media Ltd APN News & Media Myer Holdings Ltd Ainsworth Game Tech. Collins Foods Ltd Sky Network Sealink Travel Grp Retail Food Group Ardent Leisure Group Trade Me Group G.U.D. Holdings Webjet Limited Skycity Ent Grp Ltd WPP Aunz Ltd Bapcor Limited TABCORP Holdings Ltd Ten Network Holdings Crown Resorts Ltd Nine Entertainment Super Ret Rep Ltd Greencross Limited Donaco International ARB Corporation Cash Converters News Corp.. Flight Centre Travel InvoCare Limited Thorn Group Limited REA Group Breville Group Ltd Premier Investments Star Entertainment Group The Reject Shop Idp Education Limited Automotive Holdings Aristocrat Leisure Kathmandu Hold Ltd Navitas Limited Harvey Norman Baby Bunting Grp Ltd G8 Education Limited Apn Outdoor Grp Village Roadshow Ltd Mantra Group Ltd Ooh!Media Limited Corp Travel Limited Domino Pizza Enterpr RCG Corporation Ltd JB Hi-Fi Limited Sthn Cross Media Iselect Ltd Vita Group Ltd Seven West Media Ltd Tatts Group Ltd Adairs Limited

Market Cap ($m)

Price ($)

473.69 1989.05 830.23 1125.15 685.35 601.12 1618.82 447.10 1213.01 1088.30 1866.66 860.83 980.01 2402.12 950.15 1605.78 3967.52 340.43 8340.11 910.58 1988.18 789.84 303.39 1369.89 162.71 715.95 3153.43 1510.72 292.76 7207.43 1133.13 2249.70 4219.19 244.73 981.16 1286.70 9820.81 364.69 1784.46 5629.53 304.24 1384.69 966.36 728.05 897.56 745.19 1781.40 5836.23 809.23 3182.79 1153.52 430.57 496.94 1206.43 6681.76 276.18

1.02 0.88 2.74 1.39 2.10 6.35 4.21 4.47 6.95 2.34 4.74 10.11 10.07 3.70 1.12 5.80 4.76 0.94 11.45 1.05 10.08 6.80 0.37 17.30 0.33 16.80 31.19 13.70 1.87 54.55 8.68 14.24 5.09 8.44 3.90 3.86 15.30 1.80 4.88 5.02 2.40 3.59 5.75 4.46 2.99 4.49 17.66 64.78 1.47 27.30 1.47 1.81 3.19 0.78 4.42 1.61

Daily Price Change (%) 2.00 1.73 1.48 1.46 1.45 1.28 1.20 1.13 0.87 0.86 0.85 0.70 0.60 0.54 0.45 0.35 0.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.06 -0.13 -0.22 -0.27 -0.31 -0.34 -0.35 -0.39 -0.47 -0.51 -0.52 -0.52 -0.55 -0.61 -0.79 -0.83 -0.83 -0.86 -0.89 -0.99 -1.10 -1.34 -1.40 -1.67 -1.90 -2.00 -2.16 -2.45 -2.50 -2.86 -3.60

Consensus Target Price ($) 1.33 0.94 3.72 1.28 2.07 6.16 4.49 4.84 7.01 2.41 4.15 9.81 10.92 26.43 1.35 5.93 5.17 1.20 13.05 1.10 11.04 7.69 0.89 17.08 0.40 21.91 33.69 12.88 1.75 60.13 8.50 15.95 6.16 11.27 4.67 4.60 18.03 2.01 5.12 5.01 3.15 3.55 6.30 5.33 3.90 5.41 19.07 77.08 1.84 30.64 1.35 1.61 4.71 0.77 4.33 2.15


2016 PE

2017 PE

Buy Hold Buy Hold Hold Buy Hold Buy Hold Hold Hold Hold Buy Hold Buy Buy Hold Hold Buy Hold Buy Hold Strong Buy Hold Hold Hold Hold Hold Hold Buy Hold Hold Buy Hold Buy Buy Buy Buy Underperform Hold Hold Buy Hold Buy Buy Buy Buy Buy Buy Buy Hold Buy Buy Hold Hold Buy

27.57 14.33 14.20 15.26 13.08 19.43 11.33 20.52 17.22 19.18 23.39 18.26 39.51 15.05 11.20 32.77 22.00 -28.20 20.58 7.98 18.51 18.29 4.74 28.69 8.05 29.23 12.54 28.13 8.84 32.48 22.74 21.01 17.67 11.22 26.53 12.25 25.44 11.62 20.09 17.20 29.09 14.42 18.98 13.62 18.20 18.71 38.64 64.06 21.86 18.77 14.52 39.78 14.72 5.61 24.31 9.99

20.82 14.67 12.18 14.95 15.33 17.02 14.57 18.47 14.76 26.00 21.62 16.63 25.69 15.64 10.09 24.89 20.34 -78.33 20.97 9.09 15.37 16.83 4.45 26.09 9.17 25.80 13.65 25.85 9.56 28.88 20.97 19.22 17.74 11.59 23.21 12.49 20.70 10.54 20.25 15.03 22.43 13.10 16.76 14.07 16.52 15.54 30.09 46.14 16.90 15.46 12.35 20.57 12.32 7.50 24.42 12.35

2016 EPS GROWTH 23.33 -0.68 -52.07 -22.86 -6.38 32.31 -15.99 72.43 10.07 -11.24 11.87 12.63 12.38 27.23 4.17 31.57 0.67 70.77 -23.96 -14.43 1.72 8.62 333.80 6.21 36.67 -10.53 -1.61 11.12 3.14 17.42 0.81 17.88 15.01 68.17 N/A 6.22 61.37 56.33 -2.65 18.77 N/A 0.74 30.14 10.49 13.12 37.14 46.00 41.36 74.68 12.23 10.27 -36.36 74.26 -12.56 0.64 24.55

2017 EPS GROWTH 32.43 -2.28 16.58 2.09 -14.64 14.14 -22.24 11.09 16.68 -26.23 8.21 9.81 53.80 -3.81 11.00 31.64 8.13 64.00 -1.89 -12.21 20.47 8.69 6.49 9.95 -12.20 13.31 -8.10 8.83 -7.58 12.46 8.45 9.35 -0.39 -3.22 14.29 -1.90 22.88 10.27 -0.78 14.42 29.70 10.04 13.20 -3.17 10.16 20.42 28.44 38.85 29.37 21.44 17.53 93.41 19.54 -25.18 -0.45 -19.09

2016 Div Yield 2.50 4.61 1.79 3.75 4.91 2.09 6.79 2.52 3.83 5.39 3.35 4.47 1.36 5.27 5.45 1.89 4.99 0.00 5.04 10.99 4.05 2.80 3.11 1.84 12.12 1.46 4.74 2.92 6.54 1.60 3.27 3.29 2.53 5.31 2.22 5.92 1.63 4.88 4.02 4.79 2.33 6.66 3.03 6.24 3.48 2.85 1.37 1.04 3.66 3.48 4.54 0.98 4.35 9.69 3.88 6.65

2017 Div Yield 2.94 4.55 3.94 4.24 4.29 2.76 6.70 3.06 4.40 4.23 3.72 4.86 2.04 5.25 6.52 2.43 5.25 0.00 9.20 9.95 4.65 3.03 7.12 2.01 6.06 1.84 4.53 3.16 6.43 1.77 3.50 3.74 2.87 5.91 3.36 5.93 2.20 6.21 4.04 5.92 3.42 6.71 3.44 6.30 4.15 3.25 1.76 1.46 4.63 4.18 5.31 0.88 5.14 8.72 3.91 6.54

Newsflash N/A N/A N/A Myer response to Writ N/A N/A N/A N/A N/A N/A N/A Ceasing to be a substantial holder N/A N/A N/A N/A TTS: Determines Pacific Consortium proposal is not superior N/A Crown to Continue Building Six-Star Hotel Resort in Sydney N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Daily share buy-back notice - Appendix 3E N/A N/A N/A N/A N/A N/A Ceasing to be a substantial holder N/A N/A N/A N/A N/A Daily share buy-back notice - Appendix 3E N/A N/A Tatts Group rejects Pacific Consortium bid N/A

Staple stocks: Food related stocks with overseas exposure will continue to trade at high multiples and worth acquiring after pullback. All Supermarket stocks are going to struggle to hold margins with the race to the bottom on prices. Sector in negative watch as specialty China facing stocks in downgrade cycle while supermarket war will destroy margins for everyone.

News Snippet: Code MGC FSF FNP GNC TGR BAL CCL SHV ELD TWE CGC WOW WBA WES RIC BKL MTS BGA BWX AAC A2M AHY

None

Company Name Mg Unit Trust Fonterra Share Fund Freedom Food Ltd GrainCorp Limited Tassal Group Limited Bellamy'S Australia Coca-Cola Amatil Select Harvests Elders Limited Treasury Wine Estate Costa Group Holdings Woolworths Limited Webster Ltd Wesfarmers Limited Ridley Corporation Blackmores Limited Metcash Limited Bega Cheese Ltd BWX Limited Australian Agricult. The A2 Milk Company Asaleo Care Limited

Market Cap ($m)

Price ($)

176.18 700.83 849.82 2139.80 604.13 645.87 7590.09 477.66 440.64 7720.89 1088.06 30890.15 483.31 47963.14 387.85 1791.83 2185.44 651.61 368.26 916.29 1438.90 785.25

0.88 5.88 4.38 9.44 4.04 6.68 9.93 6.49 3.86 10.43 3.40 23.85 1.38 42.08 1.25 103.17 2.22 4.23 3.94 1.62 1.98 1.38

Daily Price Change (%) 1.74 1.73 1.39 0.96 0.50 0.00 -0.10 -0.15 -0.26 -0.29 -0.29 -0.54 -0.72 -0.78 -0.79 -0.82 -0.89 -0.94 -1.25 -1.52 -1.74 -2.83

Consensus Target Price ($) 1.22 6.76 5.17 9.19 4.56 6.77 9.47 7.08 4.46 11.01 3.45 23.83 1.44 43.01 1.55 111.34 2.18 5.87 5.35 2.33 2.32 1.69

Consensus Rating

2016 PE

2017 PE

Hold Hold Hold Hold Buy Underperform Hold Hold Hold Hold Buy Hold Buy Hold Buy Hold Hold Buy Buy Buy Buy Buy

12.03 12.07 78.75 44.98 14.50 18.02 18.35 14.95 9.62 33.44 23.37 19.54 55.20 20.58 15.69 17.44 11.92 22.65 26.05 18.46 47.37 11.96

14.34 11.41 49.77 17.78 14.58 20.43 17.96 15.83 10.05 27.09 20.00 19.65 23.39 17.15 14.37 22.11 11.62 21.47 20.74 14.04 27.05 11.46

2016 EPS GROWTH N/A 82.75 -31.29 0.63 -1.55 321.21 7.50 -48.68 12.14 55.19 N/A -36.51 -56.14 -4.52 14.63 141.01 -10.87 29.15 N/A N/A N/A -9.92

2017 EPS GROWTH -16.15 5.81 58.22 152.99 -0.57 -11.78 2.22 -5.53 -4.26 23.44 16.84 -0.53 136.00 20.00 9.20 -21.12 2.54 5.49 25.62 31.43 75.10 4.35

2016 Div Yield 8.31 6.44 0.79 1.17 3.78 1.58 4.54 5.45 0.00 1.86 2.65 3.49 0.40 4.54 2.96 4.27 0.44 2.22 1.19 0.00 0.08 6.84

2017 Div Yield 7.31 6.48 1.26 2.64 3.96 1.57 4.69 4.08 2.28 2.44 3.24 3.43 1.45 4.95 3.52 3.42 0.59 2.25 2.03 0.00 1.06 7.13

Newsflash N/A N/A Appendix 3Y Change in Directors Interests M Perich N/A N/A N/A N/A N/A Change of Directors Interest Notice - R Clubb N/A N/A N/A N/A Ceasing to be a substantial holder N/A N/A N/A N/A N/A N/A A2M NZ Filing: Becoming a substantial holder Change in substantial holding

Healthcare stocks: The ever increasing older demographic locally and globally will continue to support this sector with governments cutting back their health care spending. Falling currency will be another free kick to the sector valuation. Sector stuck in “must have” basket with macro, growth and currency in favour.

News Snippet:

None

Page 15

Aussie Afternoon Institutional Market Wrap 23 December 2016 Code IPD VRT MSB ANN SHL JHC RMD PRY SRX SIP CSL NAN SPL RHC HSO API REG COH MVF FPH MYX EHE

Company Name Impedimed Limited Virtus Health Ltd Mesoblast Limited Ansell Limited Sonic Healthcare Japara Healthcare Lt ResMed Inc. Primary Health Care Sirtex Medical Sigma Pharmaceutical CSL Limited Nanosonics Limited Starpharma Holdings Ramsay Health Care Healthscope Limited Australian Pharm. Regis Healthcare Ltd Cochlear Limited Monash Ivf Group Ltd Fisher & Paykel H. Mayne Pharma Ltd Estia Health Ltd

Market Cap ($m)

Price ($)

354.38 483.87 536.22 3538.74 8833.89 583.31 12003.67 2080.52 823.91 1374.48 44771.51 925.95 263.50 13646.55 3921.31 994.29 1366.63 6977.34 470.79 4681.42 2062.30 569.55

0.98 6.17 1.44 24.35 21.37 2.21 8.50 3.98 14.23 1.27 97.80 3.09 0.71 66.99 2.24 2.01 4.50 119.93 1.97 8.06 1.35 2.41

Daily Price Change (%) 3.70 2.49 2.49 1.46 0.71 0.45 -0.23 -0.25 -0.35 -0.39 -0.40 -0.64 -0.70 -0.80 -0.88 -0.99 -1.10 -1.29 -1.50 -2.30 -2.54 -3.21

Consensus Target Price ($) 2.53 7.85 2.24 23.07 22.29 2.37 9.45 3.98 22.74 1.25 109.74 3.40 0.92 79.27 2.54 1.97 4.79 126.14 2.12 7.79 1.77 2.69


2016 PE

2017 PE

Strong Buy Buy Hold Hold Hold Hold Buy Hold Buy Hold Hold Hold Buy Buy Hold Hold Hold Hold Hold Underperform Buy Underperform

-14.70 14.79 -6.42 18.48 20.54 18.24 24.35 19.55 15.09 23.81 28.00 -4120.00 -12.79 28.93 20.32 19.74 26.16 35.99 16.87 34.24 26.17 8.46

-13.80 14.38 -6.52 16.72 19.39 17.82 22.73 18.77 16.94 20.16 26.40 63.06 -39.44 25.75 20.18 17.03 22.17 30.97 15.39 28.87 16.60 11.93

2016 EPS GROWTH -70.94 3.93 22.70 -19.88 10.74 9.36 3.01 -16.04 49.06 10.42 -13.72 96.54 -43.23 15.28 14.42 20.12 0.58 21.64 18.22 26.42 163.29 27.74

2017 EPS GROWTH -6.50 2.81 1.54 10.53 5.94 2.36 7.12 4.15 -10.91 18.13 6.06 6633.33 67.57 12.38 0.68 15.91 18.02 16.18 9.59 18.63 57.58 -29.12

2016 Div Yield 0.00 4.61 0.00 2.31 3.48 5.25 1.88 3.18 1.83 3.29 1.66 0.00 0.00 1.79 3.32 2.74 3.81 1.92 4.06 1.92 0.00 11.75

2017 Div Yield 0.00 4.86 0.00 2.65 3.67 5.43 5.46 3.49 1.81 4.02 1.84 0.00 0.00 2.11 3.39 3.48 4.40 2.24 4.57 2.35 0.00 6.02

Newsflash N/A N/A Mesoblast inks deal with global pharma company N/A N/A N/A N/A N/A N/A Change of Directors Interest Notice N/A N/A N/A N/A N/A N/A N/A Appendix 3B N/A N/A N/A Change in substantial holding

Bank stocks: Regulatory and macro worries hang over the sector. Regionals should see more support with financial sector recommendation favouring them. Potential new bank levy will cut into the margins as will capital requirements, APRA lending restrictions and property bubble driven bad provisions. Sector stuck in “core holding” basket with global banking sector despite local housing bubble worries.

Stocks in play: We maintain our preference in ANZ and NAB in the big four and smaller players ABA and MYS. News Snippet:

Code CYB ANZ MOC BEN WBC CBA BOQ NAB GMA

Banks, Forex and ASIC – Experienced market watchers should be used to it by now. The jocular tone, the slapdash spelling, the blatant manipulation of key market benchmarks. And yet there is something so brazen about seeing the chatroom logs of crooked traders revealed in an enforceable undertaking this week by NAB and CBA to settle an Australian Securities and Investments Commission investigation. Chat logs have proved fertile ground for regulators over the past few years with the indiscreet messages between traders forming the basis for trials over the rigging of the Libor rate in the UK. They will no doubt emerge again in the BBSW case which is set to begin in Australia in 2017 in what is shaping up to be a protracted and messy affair. The logs reveal foreign exchange traders at Commonwealth Bank of Australia and National Australia Bank manipulated rates with similar methods, albeit on what seems to be a smaller scale. For most of the time anyway. The Australian Financial Review understands that the clients affected by the trades still do not know what happened behind the scenes. It is likely that none of the clients who were ripped off or otherwise mistreated by the traders and were used as examples in the respective enforceable undertakings will ever know. CBAs EU states that ASIC will not reveal the identities of the individuals involved. Item 4.4 of NAB's EU is almost identical. AFR

Company Name Cybg PLC ANZ Banking Grp Ltd Mortgage Choice Ltd Bendigo and Adelaide Westpac Banking Corp Commonwealth Bank. Bank of Queensland. National Aust. Bank Genworth Mortgage

Market Cap ($m)

Price ($)

3514.83 89932.08 288.65 5997.62 109352.73 142489.63 4647.89 82243.92 1635.06

4.74 30.73 2.31 12.69 32.64 82.50 11.95 30.65 3.19

Daily Price Change (%) 0.64 0.03 0.00 0.00 -0.12 -0.23 -0.42 -0.49 -0.62

Consensus Target Price ($) 4.70 28.46 2.59 10.58 31.88 76.75 11.59 29.15 3.47

Consensus Rating

2016 PE

2017 PE

Hold Buy Hold Hold Buy Hold Hold Buy Buy

20.33 15.19 14.26 14.13 14.07 14.90 12.71 12.87 8.14

15.42 13.27 13.59 14.67 13.70 14.85 12.74 12.82 8.89

2016 EPS GROWTH N/A -22.15 0.62 -2.78 -5.33 0.73 -0.83 -5.34 -14.08

2017 EPS GROWTH 31.89 14.44 4.94 -3.67 2.68 0.32 -0.21 0.35 -8.42

2016 Div Yield 0.00 5.21 7.19 5.35 5.70 5.09 6.38 6.32 13.79

2017 Div Yield 1.05 5.22 7.45 5.36 5.62 5.11 6.38 6.08 9.40

Newsflash N/A Change of Directors Interest Notice N/A N/A N/A N/A Appendix 3B N/A N/A

Diversified Financials / Insurance stocks: Asset managers offer the best way to get exposure to market locally and globally while unique financial companies like EQT, FXL and IMF are worth looking at when value emerges. Sector is in “core holding” basket while market selloff will see pullback in this sector and offer a good long term buying opportunity.

News Snippet:

BT Financial Group – BT Financial Group has come out swinging after the corporate regulator launched court proceedings alleging that the wealth manager failed to act in the best interest of its customers, with chief executive Brad Cooper saying that ASIC's interpretation of general advice would be a "bad policy outcome for Australians". Australian Securities and Regulation Authority filed Federal Court proceedings on Thursday alleging the superannuation arms of Westpac, Westpac Securities Administration and BT Funds Management provided personal financial product advice, advice that is not allowed under their Australian financial services licences. ASIC says during the campaigns, Westpac Securities Administration and BT provided advice on personal financial products, specifically recommending customers move out of their other superannuation funds into Westpac-related superannuation accounts. The proceedings will be an important test case for the wealth industry, according to Mr Cooper. "More and more we are finding people want to have a natural and practical conversation without having to pay for comprehensive personal advice," he said. AFR

Suncorp – Suncorp will review its systems and processes after the corporate watchdog asked it to pay $530,000 for failing to let almost 30,000 customers know about changes to their loan repayments. Brisbane-based Suncorp has agreed "to engage an external compliance consultant to review its processes and procedures," with the report to be handed to the Australian Securities and Investments Commission. The bank says it has completed its own review into processes relating to system generated letters. ASIC investigated Suncorp after the company itself reported a number of "internal errors" relating to consumer protection provisions between November 2015 and March 2016. "Suncorp failed to notify a large number of consumers of changes in the amount of their loan repayments and, in some cases, failed to advise the consumers of their first direct debit default," ASIC said in a statement. "As a result of these failures, consumers were not given the opportunity to prepare for a change in their repayment obligations or may not

Page 16



have been aware that their direct debit payment had failed. Subsequently, some consumers were subject to collections activity, including telephone calls or letters from Suncorp's debt collections staff. ASIC has asked Suncorp to pay $270,000 in fines and the bank a remediation to customers of $260,000. Suncorp said it had apologised to its customers over the system failure. AFR Code

Company Name

OFX EML HFA HGG BTT IMF PPT CGF AMP IFL EQT CVO IAG MPL FXL SDF ASX BLA PTM MQG SUN MFG ECX NHF QBE CCP

Ozforex Group Ltd Emerchants Ltd HFA Holdings Limited Henderson Group BT Investment Mngmnt IMF Bentham Ltd Perpetual Limited Challenger Limited AMP Limited IOOF Holdings Ltd Equity Trustees Cover-More Grp Ltd Insurance Australia Medibank Private Ltd FlexiGroup Limited Steadfast Group Ltd ASX Limited Blue Sky Limited Platinum Asset Macquarie Group Ltd Suncorp Group Ltd Magellan Fin Grp Ltd Eclipx Group Limited NIB Holdings Limited QBE Insurance Group Credit Corp Group

Market Cap ($m)

Price ($)

396.00 432.97 379.43 2854.20 3247.54 297.87 2247.22 6402.73 14936.58 2707.21 354.98 729.42 14228.82 7683.67 819.17 1634.46 9559.73 478.66 3103.53 29842.04 17598.29 4110.91 1002.39 2124.78 17419.20 847.63

1.70 1.80 2.36 4.00 10.50 1.74 48.17 11.18 5.04 9.00 17.66 1.92 5.99 2.78 2.19 2.17 49.11 7.05 5.25 86.93 13.52 23.66 3.74 4.76 12.47 17.50

Daily Price Change (%) 3.03 1.70 0.85 0.50 0.48 0.00 -0.17 -0.18 -0.20 -0.22 -0.23 -0.26 -0.33 -0.36 -0.45 -0.46 -0.55 -0.70 -0.76 -0.86 -0.88 -0.96 -1.32 -1.65 -1.81 -2.23

Consensus Target Price ($) 1.85 2.34 2.95 4.71 10.55 2.05 48.09 10.48 5.05 9.02 19.60 1.69 5.77 2.80 2.69 2.34 45.87 8.73 5.22 84.53 13.41 26.55 4.38 4.89 12.87 19.03

Consensus Rating

2016 PE

2017 PE

Buy Buy Buy Buy Hold Buy Hold Hold Hold Hold Buy Buy Hold Hold Buy Hold Underperform Buy Hold Buy Buy Buy Buy Hold Buy Buy

16.50 94.47 11.65 16.52 21.36 11.11 17.73 18.26 20.83 15.45 17.87 25.85 16.03 18.70 7.83 19.78 22.44 28.34 14.37 14.69 15.54 20.69 16.78 21.84 17.17 18.25

17.71 32.64 10.78 14.75 19.63 12.79 17.37 16.89 14.44 15.79 18.11 22.86 17.11 18.53 8.62 19.55 21.89 18.26 17.27 14.10 14.07 21.09 14.55 19.67 13.83 14.82

2016 EPS GROWTH 1.15 -15.56 0.52 -30.29 11.73 339.25 -2.63 10.37 -36.07 0.54 -9.07 -21.42 -10.52 51.70 -2.37 18.76 4.76 27.55 5.22 29.60 -3.52 27.83 12.56 32.00 -15.92 15.05

2017 EPS GROWTH -6.80 189.47 8.07 12.02 8.83 -13.19 2.08 8.09 44.21 -2.15 -1.32 13.09 -6.32 0.90 -9.20 1.17 2.51 55.18 -16.81 4.15 10.42 -1.86 15.31 11.05 24.16 23.19

2016 Div Yield 4.49 0.00 6.28 4.31 3.81 3.83 5.15 2.87 5.54 5.97 3.77 2.89 6.85 3.90 6.81 2.71 4.01 2.31 6.41 4.43 5.20 3.87 3.78 2.92 4.31 2.76

2017 Div Yield 4.06 0.00 8.86 4.73 4.30 4.60 5.26 3.10 5.75 5.81 4.61 2.97 4.64 4.10 6.71 3.00 4.10 3.50 5.58 4.91 5.67 3.60 4.25 3.38 4.75 3.34

Newsflash N/A N/A N/A Henderson Group - Director/PDMR Shareholding N/A N/A N/A N/A N/A N/A N/A N/A IAG to provide small shareholding sale facility N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Property stocks: We see house prices flattening with most of the positive optimism already priced in the housing stocks. The construction and commercial property stocks still offer improving outlook on new projects, M&A and consolidation. Rising bond yield will put pressure on yield stocks. Sector stuck in “high risk” basket due to housing bubble worries. News Snippet:

Diploma Group – The downturn in the Perth housing and construction market has claimed a high-profile victim with listed developer and builder Diploma Group collapsing owing creditors about $40 million. The 40-year-old company, which is controlled by the Di Latte family, appointed Matthew Donnelly, David Hodgson and Andrew Hewitt of Grant Thornton as administrators on Thursday. The appointments cover the ASX-listed Diploma Group and two of its subsidiaries, Diploma Construction (WA) and DGX Construction. Martin Jones and Andrew Smith of Ferrier Hodgson were appointed receivers on December 21. Mr Donnelly told The Australian Financial Review Diploma Group and its subsidiaries owed about $40 million to creditors, which include sub-contractors, the Australian Tax Office, AssetInsure (owned by insurance giant Swiss Re) and a mezzanine lender. "It would be easy to say all commercial builders in Perth have come under margin pressure and Diploma is no exception," said Mr Donnelly. "They also had some troubled projects, which put pressure on the group," he added. In September, Diploma Group reported that it was in dispute with a developer (TRG Properties) over a $40 million contract to build apartments at the Perry Lakes estate in Perth's Western Suburbs. The company also said at the time it was in contractual disputes with a number of subcontractors, which were the subject of legal proceedings. AFR

Stockland – Property giant Stockland is the frontrunner to acquire Marshall Baillieu's Minta Farm, the 286-hectare cropping property, which is soon to be rezoned as a massive $1 billion housing estate. While the deal, which could be worth between $150 million and $200 million has to be finalised, The Australian Financial Review understands Stockland has trumped a bid by Shanghai's aggressive land buyer Dahua to snap up the property in Berwick in Melbourne's south east growth corridor. Once rezoned to residential and business use under the draft Minta Farm Precinct Structure Plan, Minta Farm will effectively become a new Melbourne suburb able to accommodate up to 3000 dwellings and an employment precinct that could support about 10,000 jobs. Stockland declined to comment. A well-placed market insider said Stockland had "gone hard" to acquire Minta Farm. The Financial Review reported earlier in December that Stockland along with Lendlease, Satterley Property Group and MAB Corp were bidding to buy Minta Farm. Others understood to have participated in a confidential expressions of interest process run by the Baillieu family's Mutual Trust advisory firm include the Brown Property Group run by former Carlton football player Fraser Brown and the Pask Group, founded by BRW richlister Neville Pask. AFR

Page 17

Aussie Afternoon Institutional Market Wrap 23 December 2016 Code FET GMG SCG MGR VVR INM CMW DXS RFF GOZ IOF SCP SGP CHC AOG GPT ARF GDI IDR CQR GHC GTY BWP VCX NSR VLW AVN INA WFD ABP LLC HPI TIX AJA CWP

Company Name Folkestone Edu Trust Goodman Group Scentre Grp Mirvac Group Viva Energy REIT Iron Mountain Inc Cromwell Prop Dexus Property Group Rural Funds Group Growthpoint Property Investa Office Fund Sca Property Group Stockland Charter Hall Group Aveo Group GPT Group Arena REIT. GDI Property Grp Industria REIT Charter Hall Retail Gen Healthcare REIT Gateway Lifestyle Group BWP Trust Vicinity Centres National Storage Villa World Ltd. Aventus Retail Fund Ingenia Group Westfield Corp Abacus Property Grp. Lend Lease Group Hotel Property 360 Cap Indust Fund Astro Jap Prop Group Cedar Woods Prop.

Market Cap ($m)

Price ($)

618.31 12702.76 23799.61 7928.94 1635.66 2145.85 1723.72 9389.09 359.73 2129.53 2892.16 1629.78 11063.17 1968.66 1877.72 9061.70 431.05 533.43 345.80 1738.49 390.33 658.68 1946.42 11836.37 757.30 256.72 910.73 478.04 19180.77 1711.25 8494.16 413.48 546.85 400.31 397.61

2.54 7.25 4.56 2.18 2.41 45.16 1.00 9.84 1.76 3.36 4.76 2.24 4.64 4.81 3.25 5.07 1.86 1.00 2.13 4.30 1.78 2.20 3.03 2.99 1.51 2.26 2.30 2.70 9.21 2.98 14.52 2.82 2.57 6.55 4.96

Daily Price Change (%) 2.42 2.11 2.01 1.87 1.69 1.57 1.53 1.44 1.44 1.20 1.06 0.90 0.87 0.84 0.62 0.60 0.54 0.51 0.47 0.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.22 -0.33 -0.34 -0.35 -0.39 -0.76 -1.59

Consensus Target Price ($) 2.72 7.45 4.74 2.26 2.62 55.50 0.99 9.06 1.71 3.29 4.39 2.14 4.79 5.03 3.85 5.21 2.11 1.09 2.13 4.24 1.99 2.53 2.90 3.16 1.63 2.68 2.44 3.38 10.40 3.07 15.83 3.17 2.72 7.40 5.69


2016 PE

2017 PE

Buy Buy Hold Buy Buy Buy Underperform Hold Strong Buy Hold Hold Hold Hold Hold Buy Hold Buy Buy Buy Underperform Hold Buy Underperform Hold Buy Buy Buy Strong Buy Buy Hold Buy Buy Hold Buy Buy

18.11 18.09 20.00 16.75 47.25 30.39 11.20 17.40 7.73 15.56 18.18 16.13 16.62 15.99 19.40 17.42 16.76 11.18 10.42 14.18 17.89 12.85 18.13 15.94 17.19 7.47 19.00 19.61 21.08 13.47 11.96 15.11 14.01 11.87 9.07

16.82 16.98 19.08 15.35 17.99 26.60 12.13 17.32 13.54 14.67 17.63 15.66 15.73 15.27 17.38 16.96 15.46 10.93 11.70 14.24 17.45 13.41 17.62 16.25 16.36 7.08 12.64 15.08 19.88 12.68 11.28 14.10 11.47 11.20 8.83

2016 EPS GROWTH 7.06 7.81 1.84 6.47 N/A -11.34 6.10 1.21 150.40 3.02 1.94 7.66 7.61 9.14 56.54 3.79 -11.47 8.54 24.70 1.88 9.09 67.09 5.86 1.77 10.69 23.22 N/A 14.72 -15.29 -6.37 13.85 9.80 -20.22 34.31 3.39

2017 EPS GROWTH 7.66 6.57 4.82 9.08 162.75 14.23 -7.72 0.41 -42.88 6.02 3.14 2.97 5.64 4.69 11.64 2.75 8.43 2.25 -10.94 -0.43 2.51 -4.19 2.92 -1.92 5.07 5.45 50.37 30.02 6.06 6.21 5.99 7.14 22.07 5.98 2.80

2016 Div Yield 5.24 3.31 4.65 4.56 2.12 5.58 8.13 4.42 4.88 6.14 4.14 5.41 5.30 5.59 2.48 4.64 5.89 7.79 7.30 6.54 4.97 5.23 5.55 5.96 5.79 7.96 4.37 3.38 3.88 5.70 4.13 6.38 8.48 5.50 5.68

2017 Div Yield 5.55 3.52 4.85 4.68 5.56 6.12 8.14 4.56 5.28 6.43 4.20 5.76 5.54 5.78 2.77 4.83 6.42 7.84 7.51 6.56 5.06 5.50 5.68 5.82 6.05 8.32 6.91 4.48 3.89 5.91 4.46 6.91 8.48 6.41 5.91

Newsflash N/A Change in substantial holding N/A N/A Viva Energy REIT (VVR) Year End Timetable 2016 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Appendix 3B - Performance Fee Unit Issue N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

IT stocks: IT sector offers a number of different business models and we see good growth in the sector despite the low global growth outlook. The continued online transition from number of sectors will continue to favour this sector. Sector stuck in “high growth potential” basket but carries execution risk in global/local growth plans.

News Snippet:

Code ALU NTC CSV WTC HSN GBT CPU CL1 IFM ACX NXT IRE TNE LNK MYO CAR ISD

Covata – Ted Pretty has been hired as chief executive of Covata, an ASX-listed company which has telecommunications company TPG Telecom as its largest shareholder. Covata's shares are trading at around 10¢ after having been as high as 44¢ in mid-February. The company's main focus is cloud-based data security services for mobile phone services and other networks. The appointment represents something of a homecoming for Mr Pretty, who was a high-profile executive for Telstra for eight years from 1997. He departed from Hills Ltd, the company best known as being the inventor of the Hills hoist clothesline, in May 2015 after an action-packed three years at the helm. Mr Pretty tried to transform the staid Adelaide company from an old-world manufacturer into a growth company in electronics, security systems and healthcare technology. Mr Pretty, who had a penchant for wearing black skivvies at Telstra at the height of the dot com boom in 1999 and 2000, also runs a private investment vehicle called Black Skivvy Ventures, which invests in new technology business models. He is also on the advisory board of the Lighthouse Accelerator based at Sydney's Barangaroo precinct which is fostering start-up businesses. In a statement to the ASX on Friday, Covata said Mr Pretty would start as CEO on January 23, 2017. He will replace existing chief executive Trent Telford, who will become chairman. Mr Pretty said he would also be investing in the company as well as running it. AFR

Company Name Altium Limited Netcomm Wireless CSG Limited WiseTech Global Ltd Hansen Technologies GBST Holdings.. Computershare Ltd Class Limited Infomedia Ltd Aconex Limited Nextdc Limited IRESS Limited Technology One Link Administration MYOB Group Limited Carsales.Com Ltd. Isentia Group Ltd

Market Cap ($m)

Price ($)

1010.47 307.29 227.01 1642.05 688.55 259.90 6730.74 330.66 228.46 969.99 1014.14 1988.03 1723.15 2684.09 2175.75 2679.69 558.00

7.98 2.15 0.73 5.73 3.83 3.87 12.44 2.85 0.74 4.93 3.58 11.71 5.50 7.44 3.62 11.03 2.77

Daily Price Change (%) 2.84 2.38 2.11 1.42 1.06 1.04 0.97 0.71 0.68 0.61 0.28 0.09 0.00 -0.27 -0.28 -0.63 -0.72

Consensus Target Price ($) 9.17 3.94 1.00 5.59 4.35 4.77 11.17 3.71 0.81 7.59 4.66 12.42 5.95 8.39 3.92 12.50 2.85

Consensus Rating

2016 PE

2017 PE

Hold Buy Hold Buy Buy Buy Hold Buy Buy Buy Buy Hold Hold Hold Buy Buy Buy

35.56 186.96 9.42 116.46 26.41 18.91 17.42 58.56 21.61 107.17 221.50 25.07 42.25 26.78 23.06 24.36 17.37

27.03 537.50 9.67 59.07 23.35 17.12 16.81 40.71 18.50 78.25 67.55 22.26 36.67 22.89 20.69 22.19 16.01

2016 EPS GROWTH 26.65 -17.86 10.00 N/A 32.42 -22.03 -8.44 N/A -23.46 542.31 138.63 14.42 15.19 N/A 14.60 4.72 13.60

2017 EPS GROWTH 31.56 -65.22 -2.60 97.15 13.10 10.46 3.65 43.84 16.79 36.96 227.92 12.63 15.24 16.99 11.46 9.75 8.46

2016 Div Yield 2.45 0.00 12.41 0.00 1.77 2.79 2.63 1.33 3.95 0.00 0.00 3.83 1.70 1.01 3.09 3.37 2.89

2017 Div Yield 2.81 0.00 10.62 0.35 1.80 2.95 2.91 1.54 4.05 0.00 0.00 4.24 2.00 2.38 3.43 3.68 3.18

Newsflash N/A Director Appointment/Resignation N/A N/A N/A N/A N/A N/A N/A CFO Announced and Signs Enterprise Agreement with AECOM N/A N/A N/A N/A N/A N/A N/A

Telco stocks: This sector will benefit from industry consolidation via M&A while the big telco in Australia and NZ continue to deliver stable yield in low growth environment. The transition to online models and smart phone take up will continue to drive the usage of data from record levels to new record levels. Sector stuck in “core holding” basket with sector consolidation and economy in transition to online models.

News Snippet: Code AYS SDA SPK CNU TPM TLS VOC

None

Company Name Amaysim Australia Speedcast Int Ltd Spark New Zealand Chorus Limited Tpg Telecom Limited Telstra Corporation. Vocus Comms Ltd

Market Cap ($m)

Price ($)

341.28 790.77 6029.17 1538.42 5727.19 60553.49 2419.38

1.96 3.40 3.30 3.79 6.73 5.04 3.84

Daily Price Change (%) 5.11 2.10 0.30 0.26 -0.30 -0.59 -1.54

Consensus Target Price ($) 2.44 4.90 2.87 2.76 9.28 5.19 5.60

Consensus Rating

2016 PE

2017 PE

Buy Buy Buy Buy Buy Hold Hold

17.30 20.26 17.92 16.11 16.24 14.48 12.85

12.95 12.68 16.46 12.94 14.89 14.69 11.16

2016 EPS GROWTH 121.57 3.01 10.51 -1.77 39.13 1.75 66.69

2017 EPS GROWTH 33.63 59.72 8.85 24.45 9.07 -1.45 15.07

2016 Div Yield 4.11 2.47 7.15 5.04 2.31 6.26 4.25

2017 Div Yield 5.22 3.29 7.18 5.30 2.36 6.27 4.66

Newsflash N/A N/A N/A N/A N/A N/A N/A

Utility stocks: We see risks to the sector with falling commodity prices, rising renewables with battery technology and potential interest rate rises in US. Sector in high risk category due to increased interest rate rise outlook&worth looking at

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quality growing yield above 7%.

News Snippet: Code AGL AST SKI APA EPW DUE IFN EWC

None

Company Name AGL Energy Limited. AusNet Services Spark Infrastructure APA Group ERM Power Limited Duet Group Infigen Energy Energy World Corpor.

Market Cap ($m)

Price ($)

14757.25 5472.98 3952.73 9638.76 318.94 6861.19 694.71 450.88

22.18 1.55 2.37 8.68 1.27 2.82 0.88 0.26

Daily Price Change (%) 1.05 0.98 0.85 0.35 0.00 0.00 -1.12 -1.92

Consensus Target Price ($) 21.27 1.60 2.54 9.27 1.18 2.75 1.17 0.80

Consensus Rating

2016 PE

2017 PE

Buy Hold Buy Hold Buy Hold Buy Buy

21.11 14.97 23.01 47.53 15.12 34.09 117.33 N/A

19.24 19.62 22.36 39.28 23.87 28.78 31.43 N/A

2016 EPS GROWTH 10.15 24.59 -9.59 -20.26 -36.38 66.72 115.96 N/A

2017 EPS GROWTH 9.73 -23.70 2.91 21.02 -36.65 18.46 273.33 N/A

2016 Div Yield 3.07 5.59 6.08 4.82 9.49 6.27 0.00 N/A

2017 Div Yield 3.84 5.74 6.46 5.08 8.46 6.56 0.00 N/A

Newsflash N/A N/A N/A N/A N/A N/A N/A N/A

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Macro Charts Market (S&P 200) – Central banks updates and US election has passed& Republican Party holding all three levels of government&.deflation worries over&US/China inflation driving markets higher&High USD, high bond yield, US fiscal policy uncertainties and EU worries to test stretched valuations over the next three weeks!!!

Volatility Index (XVI) – As expected profit taking on macro risk has popped the volatility index from the lows&now pulling back from the six month high to two year lows&profit taking risk heightened!!!

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Currency (AUDUSD) – Global trade worries, US Fed rate hike plans and weak GDP expected to weigh on AUD while stronger commodities continue to support.

US Dollar Index (DXY) – USD optimism post-election hits new levels after US Fed moved hawkish.

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Bond Yield (10 year Bond) – US election result starts to question US Fed rate hike outlook for 2016&.post-election yield squeeze in play&.new 2016 highs&potential to reach 2015 highs (i.e. 3%) on US Fed hawkishness.

US Bond Yield (10 year Bond) – US post-election yield squeeze in play&.new 2016 high&beating 2015 highs (i.e. 2.5%) on US Fed hawkishness.

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GOLD (Spot Gold in AUD) – Global market uncertainty expected to drive gold recovery&US market worries, Global Trade War risks and EU break up worries!!! The de-rating on the back of USD strength&expect that to reverse.

WTI Oil (West Texas Intermediate Oil) – Weaker global growth/trade outlook is likely to weigh on oil expectations& OPEC deal delivering support&now range bound between $40 (i.e. OPEC deal) and $60 (i.e. US Shale)!!!

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Baillieu Holst Research Monthly Top Picks Last Published – 02nd December 2016

Changes this month EVT replaced SHV SDA replaced VOC

Current Top Picks Analyst: Nicolas Burgess > Top Picks: QMS, SDF Analyst: Nick Caley > Top Picks: MTR, EVT Analyst: Josh Kannourakis > Top Picks: EPD, VRS Analyst: Luke Macnab > Top Picks: ACX, SDA Analyst: Warren Edney > Top Picks: SLR, HRR

Top Picks Performance 104.00

102.00

100.00

98.00

96.00

94.00

92.00

Top Picks

Market

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Quant Strategy Model Portfolio Small caps back on the menu at discount prices Last Published – 23rd November 2016 Energy – large (WPL), small (AWE, KAR) Metals and Mining – large (BHP, RIO) Gold – large (NCM), mid (NST), small (EVN) Capital Goods – micro (ANG, DCG, GNG) Transport – large (SYD, TCL) Consumer Services – small (IPH, MTR, SLK) Media – micro (EVT) Health Care – large (CSL, RHC), micro (MVP) Banks – large (ANZ, NAB) Diversified Financials – small (IMF) Information Technology – small (ALU, HSN, IFM), micro (EPD) Telecommunications – mid (TPM, VOC), micro (SDA)

Model Portfolio Performance 500.00

Benchmark Index 450.00

Portfolio Market Cap Weighted Index 400.00

Portfolio Equal Weighted Index 350.00 300.00 250.00 200.00 150.00 100.00

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SHIELD – Sustainable High Yield Death of yield trade is overblown Last Update – 09th December 2016 Note: This report is a Quantitative Strategy product. The report uses consensus rating and forecast data from Thomson/IBES to get coverage of the whole market and avoid a house skew, and as such sometimes the highlighted themes, sectors and stocks will not match our analysts view. Macro Outlook: Global markets continue their positive momentum on-the-back of the strength of the recovery in the US and China, however stretched valuations are starting to weigh. The improving inflation outlook and US Fed rate hike expectations have driven the bond yields higher. An improving outlook for interest rates and strong commodity prices has driven a better yield outlook for the two major sectors of the Australian market. We continue to be positive on the premium to bond sustainable yield trade in an improving inflationary outlook. We expect the US Fed to be the only central bank to raise rates in 2017, while the rate of change will be slower than what the market is expecting. Cheap Picks: CWP and VLW are the low growth cheap yield picks from the SHIELD screen that have average earnings and cash flow per share growth of below 10%; an average of priceearnings and price-cash flow below 10x; a dividend yield above 5% and; a BUY rating. SHIELD Top 20 picks are: large cap – WBC, ANZ and TLS; small cap – IMF, MLD, VTG, OFX, VLW, AYS, RRL, CSV, NEC, PTM, HFA, TRS and WPP; and micro-cap – GNG, NCK, DTL and SDG.

Model Portfolio Performance 220.00 200.00 180.00 160.00 140.00 120.00 100.00 80.00

S&P 300 Price Index

S&P 300 Accum Index

SHIELD Top 20 Weighted Accum Index

SHIELD Top 20 Average Accum Index

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GARY – Growth At Reasonable Yield Making macro risk great again Last Update – 13th December 2016 Note: This report is a Quantitative Strategy product. The report uses consensus rating and forecast data from Thomson/IBES to get coverage of the whole market and avoid a house skew, and as such sometimes the highlighted themes, sectors and stocks will not match our analysts view. Macro Outlook: Global markets are beginning to digest the stretched valuations, high yields and strong currency ahead of the US Fed meeting. The aggregate policy outlook from the new administration is expected to push up inflation and debt in the process of raising growth. The inflation rally since October has been running on better than expected US and China economic data, US Fed rate cycle expectations and potential fiscal stimulus in the US. The market will soon move from optimism to execution risk with a rising interest rate outlook. We have seen a rotation out of growth industrials and into financials and resources during the recent rally. As the growth benchmark rises with interest rates, we expect the market to return to small cap industrials as the large cap growth outlook is capped by weak economic growth. We expect to see a higher level of macro volatility in 2017 due to US/China growth and EU breakup risks. GARY (Growth At Reasonable Yield) screen allows us to pick stocks with strong yield, solid growth and cheap valuation multiples compared to the overall historical market trend. GARY Industrial picks are: small-cap (CWP, VLW, HFA, WPP, VTG, FXL, AJA, AYS and GDI); and micro-cap (AFG). GARY Resource and related picks are: None.

Model Portfolio Performance 350.00

300.00

250.00

200.00

150.00

100.00

S&P 300 Price Index

S&P 300 Accum Index

G10 Indust Avg Accum Index

G10 Avg Accum Index

Nov 2016

Aug 2016

May 2016

Feb 2016

Nov 2015

Aug 2015

May 2015

Feb 2015

Nov 2014

Aug 2014

May 2014

Feb 2014

Nov 2013

Aug 2013

May 2013

Feb 2013

Nov 2012

Aug 2012

May 2012

50.00

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US market ignoring the currency driven downgrades!!!

Asset allocation model Q4 update > short fixed income, long equities!!!

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BAILLIEU HOLST

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Disclosure of potential interest and disclaimer: Baillieu Holst Ltd (Baillieu Holst) and/or its associates may receive commissions, calculated at normal client rates, from transactions involving securities of the companies mentioned herein and may hold interests in securities of the companies mentioned herein from time to time. Your adviser will earn a commission of up to 55% of any brokerage resulting from any transactions you may undertake as a result of this advice. When we provide advice to you, it is based on the information you have provided to us about your personal circumstances, financial objectives and needs. If you wish to rely on our advice, it is important that you inform us of any changes to your personal investment needs, objectives and financial circumstances. If you do not provide us with the relevant information (including updated information) regarding your investment needs, objectives and financial circumstances, our advice may be based on inaccurate information, and you will need to consider whether the advice is suitable to you given your personal investment needs, objectives and financial circumstances. Please do not hesitate to contact our offices if you need to update your information held with us. Please be assured that we keep your information strictly confidential. No representation, warranty or undertaking is given or made in relation to the accuracy of information contained in this advice, such advice being based solely on public information which has not been verified by Baillieu Holst Ltd. Save for any statutory liability that cannot be excluded, Baillieu Holst Ltd and its employees and agents shall not be liable (whether in negligence or otherwise) for any error or inaccuracy in, or omission from, this advice or any resulting loss suffered by the recipient or any other person.

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Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments.

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