Does Australia need to produce gas until 2070?
Lead analyst for Australian gas at the Institute for Energy Economics and Financial Analysis, Josh Runciman says the biggest consumers of gas - Japan and Europe - are already slashing their demand for LNG, as renewables crowd out gas.
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ABC News
8 minutes ago
- ABC News
ASX reporting season: tariffs and interest rate uncertainty loom over earnings and outlook
If 2025 has taught us anything so far, it's that nothing is certain but uncertainty, with tariff threats that change by the day, and interest rate decisions that defy market predictions. It sets a precarious backdrop for the biannual company profit reporting season, where ASX-listed firms open their books and provide investors with an update on their bottom lines. "Across the board, management teams will acknowledge the uncertainty that the tariff policies from [US President] Trump have caused," UBS equity strategist Richard Schellbach told The Business. Despite the uncertainty over the past few months, Mr Schellbach noted "equity markets have largely shrugged that off". "They've hit all-time highs in Australia and the US despite this lingering cloud, but management teams certainly will tread a cautious tone there. "It's an uncertain environment, and it's really unknown yet as to what the secondary impacts from it could be," he said of the Trump administration's tariffs. The tariff uncertainty will impact those sectors and companies with exposure to the US, which includes parts of the healthcare, building and leisure industries, Mr Schellbach said. "What we're going to see through August results is company management teams talk to the fact that it's still a tough operating environment. Market participants had widely forecast further interest rate relief by now, before the Reserve Bank defied expectations with its "on hold" decision in July, delaying a boost to the bottom line from lower borrowing costs. "Therefore, the analyst community is likely to push out further their earnings recovery stories," Mr Schellbach said. NAB's director of SMSF and investor behaviour, Gemma Dale, said market watchers were looking for earnings growth to catch up to share prices. While Ms Dale believed "tariffs are going to have a huge impact on analysts' reporting and how they're thinking about the outlook for a number of companies", portfolio manager Jun Bei Liu argued the impact of US tariffs would not be so significant for most firms. "The overall impact on Australian corporates isn't that large, however there's a couple of select companies that will get impacted directly," Ms Lui, the co-founder of investment management company Ten Cap, said. "For example, a company like Ansell, or a company like Breville, where they do manufacture those products in tariff-affected countries." Analysts have forecast cost-of-living pressures and the surprise rate hold in July to have dampened sentiment, particularly for companies exposed to household spending. "The consumer space is on the backfoot, healthcare [companies] are in a tough space, and even the earnings growth from the financials has been relatively sluggish," said Mr Schellbach. As a result, he expects profits to be largely soft. "When you look across the ASX 200 index, profits are expected to fall by about 2 per cent this financial year. "Overwhelmingly, that's been driven by resource equities. When we look at mining and energy companies, they're seeing their profits fall by that 20 per cent." Commodity prices have come under pressure, with Brent crude down about 10 per cent over the last 12 months, and iron ore off 4 per cent over the same period. There are forecast to be a few bright spots, however, such as the technology sector. "Similarly, with the communication services sector — in particular online classified stock.." Ms Dale noted that some major stocks in the consumer space had outperformed, despite interest rate and a per capita recession putting pressure on consumers. "Wesfarmers [owner of Kmart and Bunnings] performed really strongly over the last 12 months," she said, also highlighting JB Hi-Fi shares. "A good chunk of that performance over the past 12 months has been the fact that analysts and investors were expecting really poor performance. Particular focus will be cast on the Commonwealth Bank, the largest company on the ASX. Ms Dale described it as "the most consequential number" of the season, after CBA shares rallied nearly 40 per cent over the past year. "It's more than 10 per cent of the market and it's run so incredibly hard — less so in the last little while — but its performance over 12 to 18 months has been so extraordinary and it's such a chunky part of the average portfolio." "You're looking at what's currently the most expensive bank in the world by historical standards, by peer relative standards," Ms Dale said. Ten Cap's Ms Liu also highlighted the strong performance of the banks this year, in stark contrast to that of the resources sector. "In the last 12 months or so, resources, which is a big part of our index, has underperformed the banks by a massive amount. "The performance has been so extreme between the two sectors where banks have gone up quite significantly whereas the resources have collapsed, partly because of the tariff impact and partly China's growth has been somewhat disappointing." But this reporting season would see results softening for the banking sector, according to Ms Liu. "We see a bit of margin pressure, we see the revenues a little bit disappointing, and also, what's most important, the capital return from the banks will be less than what it used to be. Despite the uncertainties facing corporate Australia, and companies globally, the outlook for the financial year ahead has been forecast as more optimistic. "What the retailers will point to is … the expectation of further interest rate cuts should buoy their activity levels," said UBS's Mr Schellbach. Ms Liu said she expects more money to come back into the Australian share market in the year ahead, with investors feeling increasingly confident. "This will be an interesting reporting season because it's likely to be the bottom of the Australian economic activity, probably one of the last bad results, if you like, because looking forward, things should get better," she told The Business.
News.com.au
8 minutes ago
- News.com.au
Chinese national charged with reckless foreign interference by Australian Federal Police
A woman has been charged by the Australian Federal Police with reckless foreign interference. The Chinese national was arrested under the Counter Foreign Interference Taskforce (CFITF) and charged with reckless foreign interference, contrary to section 92.3 of the Criminal Code Act 1995 (Cth). She is expected to appear in the ACT Magistrates Court on Monday. ​Assistant Commissioner Stephen Nutt of the AFP Counter Terrorism and Special Investigations is expected to address the media on Monday afternoon.
News.com.au
8 minutes ago
- News.com.au
Thousands of jobs at risk as Australian manufacturing sector faces collapse
Thousands of Australian manufacturing jobs, particularly in regional areas, face significant risk as China intensifies investments to bolster its own manufacturing industries, a new report warns. The research by the McKell Institute reveals approximately 73,000 jobs in Australian regions reliant on refining and smelting metals are vulnerable. The report highlights the town of Port Pirie in South Australia, where state ministers have called for a federal bailout to save its lead smelter, a crucial local employer. If the smelter closes, the report estimates the town's population could drop by around 2,000 people, roughly 11 per cent, as economically productive residents and their families relocate. 'South Australia simply cannot afford to lose industrial anchors such as the Port Pirie smelter – anchors that have sustained regional communities for generations,' McKell Institute chief executive Ed Cavanough said. 'Our analysis shows that if the Port Pirie smelter were to close, the town's population could drop by around 2,000 people – that's 11 per cent – in the first year alone.' The report claims China's 'aggressive' industrial subsidisation, now likely exceeding its defence spending, is a major driver behind the mounting pressure on Australia's refined metals sector. In 2019, China invested an estimated $407 billion in industrial subsidies, enabling it to produce refined metals at significantly lower costs and flood global markets with cheap products, the report said. 'In the short-term, China's geoeconomic strategy is designed to onshore as much global heavy industrial capacity as possible,' Mr Cavanough said. 'In the longer-term the strategic goal is limiting the viability of critical manufacturing in competitor economies, including Australia. 'This would create a huge long-term economic advantage for China, and hobble Australia's industrial capacity.' Mr Cavanough said other nations are actively responding to these challenges while Australia's current approach of reacting plant by plant is unsustainable. 'Currently, the government is playing industrial whack-a-mole – working with individual refiners to preserve individual plants as they come under threat,' he said. The report urges the Albanese Government to develop a cohesive national strategy to safeguard communities reliant on the industry.
