Make Money from your property investments and reduce tax

Negative gearing

Gearing basically means borrowing to invest. Negative gearing is when the costs of investing are higher than the return you achieve. With an investment property, thats when the annual net rental income is less than the loan interest plus the deductible expenses associated with maintaining the property (such as property management fees and repairs).

When youre negatively geared you can deduct the costs of owning your investment property from your overall income reducing your tax bill. High-income earners benefit the most, because theyre in the top tax bracket.

In addition, while you record a loss on the income from the property, in theory capital gains in the value of your property should make the investment worthwhile.

But dont over-commit to property just to get a tax deduction. Those tax benefits generally don't come until the end of the financial year and you have to make your mortgage payments in the meantime.

That said, you can apply to have less tax deducted from your pay to take into account the impact on your overall income of expected losses on an investment property.

Say you earn $45,000 a year, gross, in your day job but you can reliably estimate that you'll make a $15,000 loss on an investment property. You can apply to have your tax payments calculated on an income of $30,000 rather than $45,000 giving you more cash in hand now, rather than a refund at the end of the year. Get your sums wrong, though, and youll owe the tax man money at the end of the year.

See www.ato.gov.au for information about pay-as-you-go (PAYG) withholding payments.

Remember, too, that a capital gain which will be taxed is never assured. Whats more, the benefits of negative gearing are smaller when interest rates and inflation are low and can be offset by charges such as the land tax levied in NSW (see www.osr.nsw.gov.au).

Depreciation

The owners of investment properties can also claim depreciation of items such as stoves, refrigerators and furniture. That involves writing off the cost of the item over a set number of years the effective life of the asset.

 

The ATO sets out what it considers to be appropriate periods. The cost of a cooktop, for instance, is generally written off over 12 years you claim one-twelfth of its cost as an expense each year.

There are two different types of depreciation an allowance for assets such as the cooktop, and an allowance for capital works, such as the cost of construction.

Its a good idea to talk to a quantity surveyor or other depreciation specialist right from the start, so you make full and correct use of the available depreciation allowances.

The higher the depreciation bill, the higher the amount to offset against income when youre negative gearing.

More at http://www.moneymanager.com.au/home-loans/smart-guides/investment-property-guide_3.html

HOUSE prices fell in most capital cities in the June quarter in the weakest housing market in four years, with Perth prices falling the most.

 

Superannuation funds have recorded their biggest ever annual loss since superannuation was made compulsory 26 years ago.

Superannuation research group SuperRatings says the median super fund lost 6.4 per cent for the year to the end of June.

Some super funds lost as much as 16 per cent.

 

THIS DATA IS FROM NOV 2007 results - The high-performing Telstra Super Fund is the only non-industry fund among the finalists.

Significantly, all but one of the industry funds on SuperRatings’ short-list for fund of the year is open to the public. These are AGEST, AustralianSuper, CARE, HESTA, HOSTPLUS, MTAA, REST and Sunsuper.

On performance terms alone, industry funds dominate their retail rivals. In the 12 months to 30 September (the latest figures available), eight of the top 10 performers for their balanced portfolios were industry funds, according to SuperRatings, led by Catholic Super with 19.6% followed by MTAA Super with 19.1

 

Telstra Super was the only corporate fund among the top 10 performers with a return of 18% for the 12 months to September. And AMP CustomSuper-Balanced Growth was the only retail fund in this select group, with a return of 17.1%.

(SuperRatings classifies a balanced fund as one with 60–75% of its assets in growth investments, the most common examples being shares and property, with the remainder in such investments as bonds and cash.)

“The reality is that over the past five to seven years, industry funds have outperformed retail funds,” says Jeff Bresnahan, managing director of SuperRatings. This out-performance doesn’t even count their outstanding fee advantage over the vast majority of retail funds.

And once the fee advantage of industry funds is included in the calculations, the returns of most retail funds have lagged way behind most industry funds.

SuperRatings managing director Jeff Bresnahan says it is bad news for people soon to retire, but it has been preceded by four strong years of double-digit returns.

"Balanced funds have a negative return about once every six years, so if you put it into perspective, the last five years has averaged out at about 1 per cent per annum positive return," he said.

"In perspective, it's not such a bad result. The problem is right now we've got extreme volatility in markets and no one really knows which way it's going to move next."

Analysts are questioning how many more big write-downs are to come after ANZ became the latest bank to announce a major loss because of its exposure to volatile credit markets.

Today ANZ increased its provisions to $2.2 billion, blaming the credit crisis and slower Australian and New Zealand economies.

At the close of trade, ANZ's share price had lost 10.9 per cent to $15.81, after earlier falling as low as $15.40.

Fat Prophets analyst Greg Canavan says the news that ANZ's higher provisions slash its earnings by up to a quarter has shocked investors.

"To get that type of magnitude of a fall from a bank such as ANZ has really knocked the wind out of the whole banking sector," he said.

"I guess the other big question is how much more of this is to come?National Australia Bank last week announced it was expecting to lose just over $1 billion on debt-backed investments that had turned bad.

When Will This Bear Market End?

 

By the time you read this, the bear market might already have ended.

If it hasn't already ended, it might end tomorrow.

It might end this month.

It might end this year.

It might end next year.

It might end sometime after that.

Bear markets are somewhat difficult to accurately define. We fully know their accepted definition is a fall of 20% or more from their peak.

The Australian stock market peaked in November last year and is now down around 25%, making it officially a bear market.

 

But it's not a bear market for large resources stocks.

Yet it's an even bigger bear market for most banks, retailers and smaller companies.

So although this is officially a bear market, it doesn't mean all stocks are falling, and it doesn't mean all stocks are falling by the same amount.

As usual with stock market investing, it's a case of picking the winners and avoiding the losers.

 

Proper Prior Planning Prevents Poor Performance

How Property sector is looking for 2008 /2009

FREDDY MAC IS HOT FOR FANNY MAE, BUT WHill WILL IN...

capital gains tax and tax return 2008

First home saver Accounts

India stock exchange - Top stocks for volatile tim...

Top Australian Margin lenders

Rainmaker Itv Finance Channels

Australian business confidence last month slumped ...

Centennial Coal tumbles 14 per cent and Macarthur ...

Agriculture Scheme stocks for tax savings TIM , M...

What The Very Best Investors Do In Times Like These

What do you do during these times of periodic stock market wobbles?

But what really sets the best investors apart from the average investors is their ability to calmly and rationally assess the situation, to concentrate on the underlying value of the company and not its falling share price, and to take advantage of the falling share market to buy some more of their favourite shares at even cheaper prices.

REF: www.fatprophets.com.au

Proper

 Prior

Planning  Prevents  Poor  Performance

When the opportunities appear, will you be ready? Right now, it feels as though the market will never recover. We all know that’s not true. We’ve seen it before & so have you.

If you don’t believe me, consider these wise words:

• “You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets.” Peter Lynch - (Former) Fidelity Magellan Fund Manager and Author
• "The bad news, is we're in a bear market. The good news is it's almost over. Let's find stocks to buy."
  Sir John Templeton during the 1987 stock market crash
• “Sentiment dominates at the moment. Sentiment is the herd. It is a very powerful beast. If you don't believe me....watch what it does when it turns.“ Marcus Padley – Stockbroker & author of Marcus Today, 10^th July 2008

So, even if you are not active in the market now, you need to understand what’s happening so you can practice the 6 P’s & plan your next move

For more information got to marcus today

House prices are tipped to rise next financial year as Australia's fastest population growth in two decades outweighs the effect of higher interest rates, an economic forecaster says.

House prices in Sydney will remain the highest in the nation.

"Australia is experiencing record net overseas migration flows which is underpinning what is already strong underlying demand for housing," the report said.

BIS Shrapnel study author Angie Zigomanis said rising rents and improving credit conditions would cause house prices to increase in most capital cities.

"As credit conditions recover over the course of 2009, we expect banks will gradually pass on lower borrowing rates to customers," Mr Zigomanis said.

Perth's forecast median house price of $500,000 by June 2011 would be overtaken by Darwin's $515,000 as the Northern Territory capital was anticipated to enjoy 21 per cent house price growth during the next three years.

"This easing will enable house price growth to pick up in many centres during 2009/10 and 2010/11."

Residential property markets would experience marginal price increases in 2008/09 as the population was expected to grow by 1.5 per cent, its highest level since the late 1980s.

Median house prices in Queensland were expected to grow strongly in the three years to June 2011. Brisbane, Gold Coast and Sunshine Coast properties were tipped to enjoy a nation-leading 22 per cent growth.

Sydney, was tipped to have the nation's highest median house price, of $650,000, by mid-2011 as real estate values were expected to climb by 18 per cent during the next three years.

The resources boom city of Perth was predicted to post the slowest capital city median house price growth, at nine per cent, in the three years to mid-2011.

 

Melbourne and Adelaide median house prices were tipped to grow by 16 per cent to June 2011, followed by Canberra's 15 per cent.

Hobart house prices were tipped to rise by 14 per cent by June 2011, but would still give the city Australia's lowest median capital city house price, of $365,000.

 

JOKE

An Indian man walks into a bank in
New York City and asks for the loan officer.
He tells the loan officer that he is going to India on business
for two weeks and needs to borrow $5,000.
The bank officer tells him that the bank
will need some form of security for the loan,
so the Indian man hands over the keys
and documents of new Ferrari parked
on the street in front of the bank.
He produces the title and everything checks out.
The loan officer agrees to accept
the car as collateral for the loan.
The bank's president and its officers
all enjoy a good laugh at the Indian
for using a $250,000 Ferrari
as collateral against a $5,000 loan.
An employee of the bank then
drives the Ferrari into the bank's
underground garage and parks it there.
Two weeks later, the Indian returns,
repays the $5,000 and the interest,
which comes to $15.41.
The loan officer says,
"Sir, we are very happy to have had your business,
and this transaction has worked out very nicely,
but we are a little puzzled.
While you were away,
we checked you out and found that you are a multi millionaire.
What puzzles us is, why would you bother to borrow "$5,000" ?

The Indian replies:

"Where else in New York City can I park my car
for two weeks for only $15.41
and expect it to be there when I return'"

IF YOU WERE OBLIVIOUS TO THE  ECONOMIC  AND FINANCIAL NEWS  HAPPENING OVER THE WORLD RIGHT NOW . im sure  you would be wondering what is this all about is this a burger chain gone down...  For all its mighty worth ... these  huge banks  in the us  sound real funny with these sorta names.

ALL IT TAKES IS A  "mac "  and a "fanny"  from the US of A  to bring down the world financial markets  and give everybody a hard time.

Indy mac bank -official website

Last week, a large California-based mortgage lender with loans of about $33 billion, IndyMac Bank, was placed under the regulatory control of the Federal Deposit Insurance Corporation after $1.35 billion in deposits was withdrawn in one month, a run that sent it to the wall. The lender resumed business yesterday under a new name, IndyMac Federal Bank, but the cost to American taxpayers of keeping the bank in business and avoiding any wider fallout will be substantial. About 10 per cent of the corporation's $55.2 billion Deposit Insurance Fund is expected to be spent propping up IndyMac.

Technorati tags: indymac bank, freddy mae, freddy macbank, fanny mae bank, fannie mae, indy macbank, indy mac bank, mortgage bank

FANNIE MAE & FREDDIE MAC -Official website Alarm bells are ringing about the solvency and liquidity of Fannie Mae and Freddie Mac, which together own or guarantee about 40 per cent of America's home loans. Like IndyMac Bank, these two lenders will not be allowed to fail or rather cannot be allowed to fail but the cost of federal intervention, should it be required, will be a severe test of the US economy. Some estimates are that an injection of public capital in the two banks could add up to $5 trillion to the US national debt of about $9 trillion.

If the American economy probably already in technical recession, but certainly labouring under the effects of the credit squeeze, and with consumer confidence hovering at a 28-year-low had to digest a partial or full-scale bail-out of these two mortgage lenders, the shock to the housing and financial markets, and to the already weakened American dollar, would be considerable.Fannie Mae's and Freddie Mac's share prices have collapsed on fears about future losses and the dilution of shareholder value arising from new equity raisings, but some commentators argue the banks are in no immediate danger

Example:

It's very close to 10-15% you get taxed on a longer term held shares

if you hold your investment for more than a year you get 50% CGT concession
say if you make 100K and hold it for 12 months and 1 day
you end up paytax on 50K on what ever tax bracket you on
mostly be 30% so that would be 15K

15K of 100K is 15%

There are 3  ways to do capital gains for shares for your tax return 2008 , the easiest method  for shares is the  "the other method" . Basically you take all the Buys(shares) an minus it from the sells and if you get a profit then it is  the capital gain on  which you add  at 18 g on the txx return form if i remember right

The "other method" is better explained here

Example

Shares purchased and sold within 12 months

In August 2007, Sonya bought 1,000 shares in Tulip Ltd for $1,500 (including broker’s fees) and sold them in June 2008 for $2,350. She paid $50 brokerage on the sale. A CGT event happens when Sonya makes the sale. As the capital proceeds of the parcel of shares is greater than their cost base, Sonya has made a capital gain.

As Sonya bought and sold the shares within 12 months, she must use the 'other' method to calculate her capital gain as she cannot use the indexation or discount method. So her capital gain is:

$2,350 – ($1,500 + $50) = $800.

As Sonya has no other CGT event, and does not have any capital losses, she completes the CGT labels on her tax return for individuals (supplementary section), as follows:

18 Capital gains

You must also print X in the YES box at G if you received a distribution of a capital gain from a trust

Did you have a CGT event
during the year?

G NO _  YES X

Net capital gain

A       800

Total current year capital gains

H       800

Net capital losses carried forward to later income years

V

TO check this method and other  calculation methods go here at the ato website

First Home Saver Accounts

First Home Saver accounts are a new type of investment account designed to help Australians boost their savings for a deposit on their first home. This Government initiative will see super funds and banks being able to offer a superannuation style investment account that helps maximise savings through tax breaks and Government contributions. FACT SHEETS HERE

On 4 February 2008, the Government confirmed its 2007 federal election commitment to establish First Home Saver Accounts to assist Australians aged 18 and over to save for their first home.

First Home Saver Accounts are the first of their kind in Australia and will provide a simple, tax effective way for Australians to save for their first home through a combination of Government contributions and low taxes.

First Home Saver accounts will be concessionally taxed (like for superannuation), meaning that generally much lower tax will be paid on the investment or interest earnings of First Home Saver accounts, than for regular savings accounts or managed investments.

Who can open a First Home Saver account?

To open a First Home Saver account you will need to:

Be aged 18 to 65

Have not previously purchased or built a first home in Australia to live in;

Not currently have or previously have had a First Home Saver account.

Provide a tax file number.

How to get started

Under the enhanced First Home Saver account scheme announced in the Federal Budget in May 2008, there will no longer be any initial contribution required to open a First Home saver account. However, annual contributions of at least $1,000 must be made in four financial years to be eligible for the tax-free withdrawal for a first home.

How do the savings incentives work?

First Home Saver accounts will offer a simple, tax effective way to encourage and maximise saving for a first home deposit through a combination of Government contributions and low taxes.

Government contributions

First Home Saver Accounts will now attract a flat 17% Government contribution on the first $5,000 of savings made to a First Home Saver account in any year.

Low tax rates

Investment earnings (or interest) that accrues in a First Home Saver account will be taxed at a maximum of 15 per cent.

Government contributions will be tax free.

Withdrawals from a First Home Saver account used to purchase or build a first home will be tax free.

Adding to your account

There are no restrictions on who can contribute to an individual’s First Home Saver account, whether it’s the account holder, family member, employer, or friends. All contributions must be from after-tax income, and a tax deduction cannot be claimed.

There are no restrictions on who can contribute to an individual’s First Home Saver account, whether it’s the account holder, family member, employer, or friends. All contributions must be from after-tax income, and a tax deduction cannot be claimed.

There is no minimum annual contribution, but a withdrawal can only be made where contributions of at least $1,000 have been made in each of at least four years.

There will be a $75,000 lifetime account balance cap, after which no further personal contributions can be made.

Cashing out to buy a first home

Funds can only be withdrawn from a First Home Saver account to put towards purchasing a first home, or building a first home to live in.

The full amount must be withdrawn and the First Home Saver account closed at that time.

The Government is looking at ways to allow First Home Saver account savings to be used for Auctions.

Special circumstances

If any of the following situations occur, the account must generally be closed and the full amount transferred to a superannuation fund, nominated by the individual. The money is treated like any other after-tax superannuation contribution. Individuals cannot open another First Home Saver account in the future.

If an account holder buys a first home before the minimum 4 year contribution period has been reached (using other savings or earnings)

If the account holder reaches age 65

If the account holder no longer wishes to have a First Home Saver account.

In the event of death, divorce, disablement or severe financial hardship, First Home Saver accounts are generally treated the same as superannuation. In the event of bankruptcy, the balance is treated as though it were a normal savings account.

Where can I open an account?

First Home Saver accounts will be launched from 1 October 2008. The majority of accounts will be offered by superannuation funds (those who hold a public offer licence) and banks. Building societies, credit unions and life insurers will also be able to offer First Home Saver accounts.

In response to the issues and suggestions raised during the consultation period, the Government has made a number of changes to improve the design features of the accounts.

Some of the key changes are:

• the Government will contribute 17 per cent on the first $5,000 (indexed) of individual contributions made each year;
• an overall account balance cap of $75,000 has been introduced; and
• the upfront contribution of $1,000 has been removed.

The Government has maintained the taxation incentives. 

• Investment earnings (or interest) that accrue in the accounts will be taxed at 15 per cent.
• Withdrawals will be tax free where they are used to purchase a first home to live in.

Fact Sheets

Download the Fact Sheets in Portable Document Format or view in HTML.

HTML
PDF

First Home Saver Accounts - Fact Sheet - Account Holders
86KB

First Home Saver Accounts - Fact Sheet - Account Providers
87KB

 

The bad side of it  >> here

One of the many reasons why every investor should read Wealth Insight is that apart from the extensive data, critical advice and expert insight that make up the magazine, we also try to put forth investment worthy ideas that can be evaluated and implemented by you - the investor. Last month, we told you about the stocks that fund managers bought when the markets were crashing; our analysis threw up nine tough stocks for a tough market.

This time around, we'll tell you which stocks reported a smart recovery in the past two quarters. But first our modus operandi. We began with all the 6215 listed Indian companies.Out of these, we selected the top 1000 companies on the basis of market capitalization (30-days average, as on 14 May, 2008) and ran a query on 545 of them which had declared their fourth quarter numbers for FY2008. This list was further filtered to find those companies, which had been struggling since December 2006 but had staged a recovery a year later - December 2007 onwards.

To find these companies, we evaluated the EPS of each company over the past five quarters. EPS gives you the amount of company's profits that are attributable to each outstanding equity share and is obtained by dividing the net profit figure (excluding preference dividends) by the number of outstanding shares.

After evaluating the EPS, we found that there were 21 companies that had seen a constant decline in EPS from December 2006 to September 2007. But out of these 21, seven companies have been able to bounce back in the past two quarters of December 2007 and March 2008. These seven companies have reported a significant earnings turnaround and consecutive growth in EPS. These companies have obviously done something right and would probably make a good investment. So let's take a close look at each of them…

Sterlite Industries (India)

Sterlite is India's largest non-ferrous metal and mining company (on the basis of net sales) with operations in aluminum, lead, copper and zinc.

It is a subsidiary of Vedanta Resources Plc. - a London based diversified metals and mining company, which has a 57 per cent stake in Sterlite.

Sterlite is also listed on the NYSE. It holds a majority stake in other Indian companies like Hindustan Zinc, Bharat Aluminum and Sterlite Energy (100 per cent). It has plans to participate in coal-based power generation projects through Sterlite Energy and aims at a capacity of 10,000 MW in five years. The company is in its final stages of setting up its 2,400 MW coal based power plant in Orissa and even has plans to come out with Sterlite Energy's IPO.

On the financials front, the company reported a weak set of numbers in the March and June quarters in 2007, which lead to its EPS decline. However, in its latest Q4 numbers announced for FY 2008, Sterlite reported a 46 per cent rise in profits on a q-o-q basis.

The stock had a major run-up on the bourses from September to November 2007 and has also grabbed the attention of fund managers. It was held by only 50 funds in August 2007, but is now a part of 107 equity diversified funds (as per the April portfolios).

Mahanagar Telephone Nigam

More commonly known as MTNL, this state-run telecom major has faced stiff competition from private players. The company, which operates from only two metros, Delhi and Mumbai, has seen deterioration in its growth in recent times.

The company has two wholly owned subsidiaries - Millennium Telecom at Mumbai and Mahanagar Telephone Mauritius Ltd at Mauritius, which helps MTNL in its new planned business stream of International Long Distance (ILD) calling.

Though the telecom sector is one of the fastest growing sectors in India, MTNL has seen its telephony market share decline in the recent past. However, MTNL is doing the best it could by introducing new value added services like broadband and IPTV (internet-protocol-based television) in addition to its fixed line and GSM services. It also has plans to offer TV channels on cell-phones apart from initiating its ILD calling business for which the license is awaited.

Recently, there has been a sigh of relief for this lifeline of Delhi and Mumbai, as the company reported better earnings after quite a few quarters of declining profits. The PAT figure for Q4 FY2008 stood at Rs 219 crore, up 8 per cent on a q-o-q basis. MTNL's EPS has gradually risen to Rs 3.49, a good jump from its EPS of Rs 1.5 in September 2007. Mutual funds too have increased their holdings to the stock in the past five months and the stock is currently a part of 22 equity diversified funds.

Jindal Stainless

Jindal Stainless (JSL) is India's largest stainless steel manufacturer having manufacturing facilities at three locations - Hisar, Vizag and Orissa.It is the flagship company of the USD 6 billion Jindal Group and manufactures different ranges of flat steel products to serve the domestic and international markets.

The company recently signed a joint venture agreement with an Indonesian mining company - Antam to develop a nickel smelting and stainless steel plant in Indonesia from early 2009. JSL already has a stainless steel cold rolling complex in Indonesia and this project is a step towards becoming a global industry leader.

The company also has major expansion plans in the pipeline to expand its manufacturing capacities in the coming years. It plans to spend around Rs 6000 crore over the next two years to fulfill these plans.

JSL reported a decline in its domestic and export income in the period between December 2006 and September 2007.

However, post that, JSL has reported a domestic sales figure of Rs 1496 crore in Q4 FY2008, a marginal growth of 4 per cent on a q-o-q basis. JSL's EPS though is far away from its December 2007 figure, and has recovered in the last two quarters. Equity funds have considerably increased exposure to the stock. Combined together, equity diversified funds account for over 22 lakh shares of JSL, a more than threefold increase from the 7 lakh shares held a year ago.

Polaris Software Labs

Polaris Software Lab is one of India's leading IT companies which provide global financial services solutions.

It is an expert in outsourcing services in the Banking, Financial Services and Insurance (BFSI) sector and is the only company in India which is fully focused on the BFSI sector. Polaris offers specialized outsourcing services in corporate/core banking, consumer finance, investment banking and risk and treasury.

Recently, to provide ongoing product development and support services, the company entered into a strategic partnership with City Networks, a global software services provider for the treasury, securities and derivatives markets.

In October last year, Polaris launched a software testing laboratory, PACE in Australia which helps the company meet the growing demands of its clients in Australia, New Zealand and Hong Kong.

Back home in India, Polaris faces tough competition from I-Flex, Infosys and TCS who also offer financial services products. Perhaps, Polaris' expertise and focus on the BFSI space could help the company in the coming years.

Talking about numbers, Polaris has seen a significant cut in profits over 2007. Equity mutual funds have reduced their exposure to the stock in the last 12-months, but the company is slowly recovering since December 2007.

Lanco Industries

Lanco Industries started off as a pig iron and cement manufacturing company in 1991. However, the company struggled to carry on its businesses in the initial years and was in a way rescued by Electrosteel Castings Limited when both companies entered into a strategic alliance in the month of December 2002. After the alliance, the company first reported profits in 2003.

Consequently, Lanco's capacity to produce pig iron and ductile iron (DI) pipes has significantly increased. The company also manufactures foundry grade pig iron and portland slag cement, though it main business is to manufacture DI pipes (these pipes are generally preferred for water supply, sewerage and transmission applications). Last year, in March 2007, the company also installed a 12 MW captive power plant to generate electricity of 79.2 MU annually. The company already had a large value addition chain starting from iron ore to DI pipes and setting up of this plant has further strengthened its value chain.

Going ahead, the growth in demand of DI pipes offers a positive outlook for the company. After a disappointing set of numbers from March to September 2007, when its sales and profit figures were hit, the company reported robust results for the quarter ending December 2007 when sales jumped by 28 per cent (q-o-q basis).The trend has continued and Lanco has reported a whopping 70 per cent rise in profits in its recently declared results for Q4 FY 2008 (q-o-q basis). Though the stock is not a part of any equity diversified fund currently, it surged by over 200 per cent in the period between Aug '07 and Jan '08.

CCL Products (India)

CCL Products is a small company which commenced operations in 1995. It is engaged in the manufacturing of various types of coffee and is a 100 per cent export oriented unit.

The company has marketing collaboration with some of the highly reputed and experienced companies engaged in the coffee business in UK and the USA.

On a y-o-y basis, the company's net sales have been growing at a steady pace of 34 per cent annually in the past four years.

CCL has seen a significant rise in EPS in the past two quarters of FY2008. In fact, in the quarter ending March 2008, the EPS figure stood at Rs 14.77, a 100 per cent growth over its previous quarter.

However, equity mutual funds have decreased exposure to the stock in the past one year.

The stock was held by five funds a year ago but is now a part of only one fund, namely Franklin India Prima. The stock price too has taken a major hit in the past and has decreased by over 63 per cent since January 2007.

UTV Software Communications

UTV started off as a TV content company in 1990, but has slowly transformed into an entertainment production and distribution house with pan-Asia operations. It currently has three business verticals - content (movies, television), interactive (animation and gaming) and broadcasting. The company has eight subsidiaries which take care of its different business verticals.

In 2006, UTV entered into a strategic alliance with Walt Disney when the latter acquired a 13.7 per cent stake.

Walt Disney also acquired a 100 per cent stake in UTV's 24-hour kids channel Hungama TV. Recently in February '08, the company announced that Disney is increasing its stake to 32.1 per cent. The deal, once it goes through, would be the largest strategic deal ever by a foreign investor in the Indian media and entertainment space.

The company also tied up with 20th Century Fox in 2007 for the co-production of a Hollywood flick. UTV is the only Indian company to have partnerships with top international media majors like Fox and Disney in such a short span.

After reporting a loss in the quarter ending September 2007, UTV has come out with a good set of numbers in its latest results.

UTV's net sales have surged by 170 per cent for the quarter of March 2008. The EPS too saw a significant jump from Rs 0.39 to Rs 1.86 in the March 2008 quarter. All equity mutual funds exited the stock in January 2008 but re-entered the very next month. The exposure to the stock by funds has been considerably increased since then.

REF: http://sify.com/finance/fullstory.php?id=14705901

 

ANZ Bank Margin Lending
Level 15, 100 Queen Street, Melbourne VIC 3000
Tel: 61 3 9273 5555 

www.anz.com

BT Margin Lending
Level 15, 2 Chifley Square, Sydney NSW 2000
Toll free: 1800 816 222 Fax: 61 2 9259 9800

www.btonline.com.au

Citigroup Margin Lending
Level 20, Citigroup Centre, 2 Park Street, Sydney NSW 2000
Toll free: 1800 062 794 Fax: 61 2 8225 5400

www.marginlending.citigroup.com.au

Colonial Geared investments
Level 6, 120 Pitt Street, Sydney NSW 2000
Toll free: 1800 252 351

www.colonialgearedinvestment.com.au

Commonwealth Securities
Level 6, 120 Pitt Street, Sydney NSW 2000
Toll free: 13 17 09 Fax: 61 2 8292 5200

www.commsec.com.au

Cygnet Capital Pty Limited
Level 10, 63 Exhibition Street, Melbourne VIC 3000
Tel: 61 3 9669 1900 Fax: 61 3 9669 1950

www.cygnetcapital.com.au

Equity Margins Ltd
Level 39, 120 Collins Street, Melbourne VIC 3000
Toll free: 1800 674 569

www.equitymargins.com.au

Goldman Sachs JBWere Margin Lending
Level 16, 101 Collins Street, Melbourne VIC 3000
Toll free: 1800 780 809 Fax: 61 3 9679 1493

www.gsjbw.com

Leveraged Equities Limited
Level 3, 24 York Street, Sydney NSW 2000
Toll free: 1300 307 807 Fax: 61 2 8282 8383

www.leveraged.com.au

Macquarie Investment Lending
Level 3, 20 Bond Street, Sydney NSW 2000
Tel: 61 2 8232 3333 Fax: 61 2 8232 7780

www.macquarie.com.au

National Australia Bank Margin Lending
800 Bourke Street, Melbourne VIC 3000
Toll free: 1300 889 398 Fax: 61 3 8641 2900

www.national.com.au

St George Margin Lending
Level 7, 182 George Street, Sydney NSW 2000
Toll free: 1300 304 065 Fax: 61 2 9952 1000

www.stgeorgemarginlending.com.au

Suncorp Margin Lending
Level 18, Suncorp Metway Centre, 36 Wickham Terrace, Brisbane QLD 4000
Toll free: 13 11 55 Fax: 61 7 3362 8550

www.suncorp.com.au

Todays Stock market update

Australian shares closed down 1.5 percent to near two-year lows on Thursday as investors took to the sidelines worried about the U.S. second quarter reporting season and the state of the world's largest economy.

Financial stocks were again under pressure on concerns that higher funding costs will crimp earnings.

Industrial and sugar conglomerate CSR fell 14.7 percent to A$1.97 after it said it expects year to March earnings before interest and tax to rise 5 percent, less than the 13.8 percent rise expected by analysts. The stock hit a four-year low of A$1.92 during the session

After 13 years on top, Bill Gates is no longer the richest man in the world. That honor now belongs to his friend and sometimes bridge partner Warren Buffett.
Riding the surging price of Berkshire Hathaway stock, Buffett has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago.
Gates is now worth $58 billion and is ranked third richest in the world. He is up $2 billion from a year ago, but would have been as rich--or richer--than Buffett, had Microsoft not made an unsolicited bid for Yahoo!

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TODAYS MID-DAY REPORT

MIDDAY REPORT

The Australian sharemarket is trading higher today following a two-session slump, helped by a positive lead from Wall Street overnight. The All Ordinaries Index (XAO) is up 1.2pct or 59pts to 5081, while the benchmark S&P/ASX 200 (XJO) index has gained 1.5pct or 75pts to 5008.

The Aussie dollar is weaker, buying US95.05c.

The financial sector is rallying today, after US banking stocks staged a recovery overnight. The National Australia Bank (NAB) has climbed 3.8pct or $1.01 to $27.36, while Macquarie Group (MQG) has jumped 6.9pct or $3.16 to $49.17.
Gains from the country�s top two miners are also giving a boost to the market. BHP Billiton (BHP) has risen 1.1pct or 45c to $39.95, while Rio Tinto (RIO) has put on 0.7pct or 84c to $124.29.

Australia's business confidence index dropped to minus 9 points from minus 4 in May, according to a National Australia survey of 335 companies, as cooling domestic demand and spiraling raw-material costs eroded corporate profits.

The rise in oil prices is trying to do what the credit crunch so far has failed to do, and that's tip the world into recession. So now you've got these two crises hitting at the same time.''

S&P reduced Sydney-based GPT's credit rating one level to BBB, the second-lowest investment grade ranking, from BBB+, after the company cut its profit estimate by 27 percent GPT. Its shares slumped 11 percent to A$1.87, their lowest since 1984.

Valad Property Group, another real estate investment trust, tumbled 14 percent to a record low 54 cents, while Mirvac Group lost 13 percent to a record low A$2.39

Nex Metals Exploration Ltd. (NME AU), an Australian metals explorer, rose 11 cents, or a record 41 percent, to 38 cents, after saying it continues to explore opportunities in southeast Asia and that it's had, and continues to have, ``discussions with a number of parties with respect to various projects.''

Oil and gas companies may help sustain record mining and energy investment in Australia, the world's biggest shipper of coal and iron ore, until 2023 because of demand from China, according to forecaster BIS Shrapnel Pty.

Energy investment is growing strongly because of record prices and increased exploration, the Sydney-based business research and forecasting company said today in an e-mailed statement. The nation's mining spending rose 22 percent to A$41.5 billion ($40 billion) in the 12 months ended June 30, it said.

Commodities are in their seventh year of gains and the so- called commodities ``super cycle'' may last another 15 years, according to Merrill Lynch & Co. The global commodities boom has spurred record profits and stock price gains for producers such as BHP Billiton Ltd. and Woodside Petroleum Ltd.

A drop of about 10 per cent in the spot price of coal in the US, Europe and Australia was the catalyst for many sales and sent shares of Centennial Coal tumbling 14 per cent and Macarthur Coal down 7.7 per cent.

MORE than $25 billion was wiped from Australian resources stocks yesterday as falling coal prices and concerns that record oil prices would begin to weigh on global growth started a rush for the exits.

"The big catalyst for declining resources was that over-the-counter coal price fell in a heap, sending most US coal stocks down," Macquarie Private Wealth associate director David Halliday said.
"You've seen falls in base metals and now in coal. It gets people thinking all these bubbles burst at some point."

The S&P/ASX 200 materials index, largely made up of miners but including steel makers and chemical makers, finished the day down 6.1 per cent, losing more than $20 billion in value, and the energy index lost about $5 billion.

 

The sales results of the listed agricultural managed investment scheme (MIS) providers yesterday trickled in, which in the main were disappointing.

 

Timbercorp (TIM) 80c

Great Southern (GTP) $2.89

Futuris (FCL, $1.03)

TFS Corp (TFC, $1.25)

As predictable, cashed-up investors in past years have flocked to end-of-year agrischemes in a desperate bid to avert handing over money to the taxman.Not so this year. For a start, stock market investors don't have such a need to offset capital gains because they don't have any, while the taxman now frowns on non-timber schemes that rely on their fees being deductible upfront.

Timbercorp disclosed $128 million of sales up to June 30, compared with $145 million previously. As a result of the tax crackdown, Timbercorp had only three schemes of offer in timber, olives and almonds, which had the imprimatur of a previous ATO private ruling.

Buried deep in yesterday's announcement, Timbercorp also admitted full-year earnings for the year to September 2008 would come in at $53-$57 million, compared with the previous year's $66 million.

 

Great Southern reported $315million of sales, 24 per cent lower. But excluding the effect of not having a beef cattle project that was offered last year, sales were down 6 per cent.

"If the stock market is falling or rising, crops in the ground don't know that and they still keep growing, so there's a real inherent risk management built into the agricultural sector".

Another big provider, Futuris (FCL, $1.03) last week confessed MIS sales of its Integrated Tree Cropping arm would fall short.

WA Indian sandalwood grower TFS Corp (TFC, $1.25) has increased subscriptions by 44 per cent, to 808 hectares from 558ha previously, prompting the company to boost full-year earnings guidance to a 54-58 per cent rise over the previous year's $19.18 million. According to an excitable company rep, this is a "truly fantastic effort and certainly worthy of comment when everyone else is full of gloom and doom".

The Indian sandalwood yarn is indeed a fascinating one: sandalwood oil and fibre are highly in demand as a perfume ingredient, yet the wood has not been grown out of India.

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Luckily, TFS is treated as a timber scheme for tax purposes. Most of the other providers face the grinding task of weaning their business away from retail-focused MIS revenues.

Timbercorp is working on a $150 million dairy fund to be pitched at institutional investors. Timbercorp also enjoys $300million of annual annuity streams from ongoing fees on MIS already in place. So if new business dries up, there's still some money to pay the rent.

 

Great Southern is timber-oriented and is less affected by the tax changes, but has a less favourable business model in that it relies on upfront, rather than annuity, payments. It also has a higher proportion of maturing allotments, which is potentially problematic in that the timber sales actually have to meet the claimed yields. On the positive side, it frees up land for new schemes, thus freeing up capital that has been used to acquire new dirt.

TFS is a speculative buy. The company won't be producing sandalwood in earnest until about 2010, but has already sold some of the output to French perfumiers at the going rate of $2000 a kilogram.

Finally, Tasmanian-oriented eucalypt grower Forest Enterprises Australia (FEA, 50c) grew scheme revenues by 93 per cent, to $116 million.