Sector commentary

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Oil & Gas

14/01/2015
Oil & Gas - Macro Outlook: Current prices are not sustainable
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The oil market was late in appreciating the significance of the shale revolution and slowing demand growth. Arguably, however, the 50% plunge in prices in the second half of 2014 was excessive and is setting the scene for a rebound. Sub $60/barrel prices are below fully accounted costs for a wide swathe of projects. Sharp investment cutbacks are likely, which is particularly relevant for high depletion rate shale oil producers. The price trend may remain soft during early 2015 reflecting a continuing supply surplus. By the second half, however, we would expect a firming tendency once the significance of financing constraints and likely slowing US production growth are assimilated. Medium term, we believe a price ceiling could emerge at $75-80/barrel given the new found elasticity of supply through shale development, capacity additions in Brazil, Canada and Iraq and structural issues slowing demand growth.

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Oil & Gas

03/12/2014
Catalytic converter - Crude oil prices: A range-bound future
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Last week’s OPEC meeting has fuelled the continuing slide in crude oil prices that began back in June 2014. With crude oil prices down c 40% since that time and no sign of support from either OPEC or non-OPEC producing nations, the world has had to wake up to the burgeoning level of oversupply hampering the crude oil markets. Driven by booming oil shale activity, US oil production reached 8.9mmb/d in October, within reach of Saudi Arabia at 9.75mmb/d. From this perspective it was clear something had to be done. With the industry now beginning to cut spending in response to weaker pricing, we expect that a material reduction in US oil output, and by consequence a stabilisation in crude prices, is on the horizon. In the interim we expect pricing to remain weak, with key investment opportunities in the upstream sector being low-cost operators with significant cash and low debt. We reduce our 2015 oil price expectations to $75/bbl for Brent and $70/bbl for WTI, while leaving our long-term view unchanged at $80/bbl.

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Alternative Energy

24/11/2014
Renewables rising - Sector primer
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With regard to renewables, those lyrics, “Here Comes the Sun”, finally seem to be coming to fruition, as evidenced by the recent performance of many companies in the alternative energy/renewables sector. The recent plethora of yield company spin-offs, as well as similarly missioned “total return” companies, has provided visibility to the sector, validating it further, and offering investors a unique way to play the alternative energy/renewables space in terms of both yield and growth potential. While volatility is likely to be high, overall, we are bullish on the alternative energy/renewables sector, and believe the “total return” concept offers investors the potential for diversification, higher yield and more secured cash flows associated with renewable assets. In this report, we initiate coverage of the alternative energy/renewables sector, and present an overview of climate change, snapshots of the main subsectors and spotlights on select “yieldco/total return” companies in the space.

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Companies mentioned
Show companies...Abengoa Yield (ABY), Brookfield Renewable Energy Partners (BEP), Capstone Infrastructure (CSE.TO), Hannon Armstrong Sustainable Infrastructure (HASI), NextEra Energy Partners (NEP), NRG Yield (NYLD), Pattern Energy Group (PEGI), TransAlta Renewables (RNW.TO), TerraForm Power (TERP), Bluefield Solar Income Fund (BSIF.L), Greencoat UK Wind (UKW.L)

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*Multiple Sectors

11/11/2014
Deutsche Börse Eigenkapitalforum 2014 Research Guide
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Welcome to the Edison research guide for the Deutsche Börse Eigenkapitalforum 2014. Edison is delighted to be a partner for this event for the third time. This book profiles 75 companies that will be presenting at the Eigenkapitalforum. Connecting a large number of investors with a broad range of companies in a forum like this is moreimportant than ever. Being able to discuss the business model and outlook directly with management is hugely important for investors to identify value. In the same way, it offers quality companies the chance to stand out of the crowd and attract new investors. Thanks to all those who took the time and effort to communicate with Edison’s analysts – your contributions are reflected in the quality of this year’s research guide. The guide opens with a market strategy piece and includes an overview of each sector, as well as conference programme and maps. The company profiles include: • a discussion of the company’s strategy and market position; • a review of the business’s recent financial performance; and • a discussion on valuation based on consensus or Edison estimates. Hard copies of this guide will be available at the forum. Edison is Europe's leading investment intelligence firm, setting the standards for investor interaction with corporates. Our team of over 120 analysts and investment professionals works with leading companies, fund managers and investment banks worldwide to support their capital markets activity. We provide services to more than 450 retained corporate and 60 investor clients from our offices in London, New York, Frankfurt, Sydney and Wellington. Our research can be accessed free of charge at http://www.edisongroup.com.

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Companies mentioned
Heartland New Zealand , Adler Real Estate , ifa systems , CENIT , Grand City Properties , StemCells , Tipp24 , InVision , SinnerSchrader , Erytech Pharma , Sartorius , Nanogate , Leifheit , Lanxess , Albioma , aap Implantate AG , Prosensa , Thin Film Electronics , Fair Value REIT , artnet , Grammer , Newron Pharmaceuticals , GFT Group , Mologen AG , Deutsche Börse , Global Bioenergies , Sygnis , Firstextile , Seven Principles , PSI , TXT e-solutions , BB Biotech , MagForce , Medigene , Stratec Biomedical , Deutsche Beteiligungs , Transgene , Neovacs , MorphoSys , 4SC , Evotec , Epigenomics , Innovation Group , Wilex , Paion , Primary Health Properties , See more..., Takkt, Lotto 24, SYZYGY, Aurelius, Vietnam Holding, DO Deutsche Office, PATRIZIA Immobilien, SFC Energy, Wacker Chemie, PVA TePla, Arbonia Forster Holding, Durr, INDUS Holding, KTG Energy, Phoneix Solar, Technotrans, CropEnergies, NeoStem, All for One Steeb, DATAGROUP, First Sensor, Jenoptik, Mensch and Machine Software, REALTEACH, Reply SpA, SNP AG, Wincor Nixdorf, Activia Resources, TransGlobe Energy

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Technology

15/10/2014
German Mittelstand Conference
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Welcome to the Edison research guide for the OktoberINVESTfest. Edison is delighted to be a partner for this event for the second time. This book profiles the 14 German and 13 American companies presenting at the Invest in Bavaria forum in New York on 20 October 2014.

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Companies mentioned
ifa systems , GFT Group , PSI

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Pharmaceutical & Healthcare

13/10/2014
ASX Spotlight Conference book
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Edison Investment Research is delighted to be working with ASX on its upcoming Spotlight Conferences in Singapore and Hong Kong on the 21 and 23 October. Below please find a link to the report Edison has produced for the event. It features profiles for each of the participating companies. We would like to thank ASX and the companies involved for their cooperation.

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Companies mentioned
Benitec Biopharma , Bionomics

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Technology

06/10/2014
Mobile ecosystems
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The heady days are over. Growth is slowing and competition is growing. There has always been opportunity for change in the mobile industry but both Apple and Google seem to have found the holes in the armour and are moving to address their weaknesses. This puts a time limit on any challenger as the risk is that these two become so big and so ubiquitous that users cannot be bothered to look elsewhere.

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Oil & Gas

27/08/2014
Onshore down under - Oil & gas sector report
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The evolution of the Australian onshore unconventional sector is nearing the sharp end. JVs are largely bedded down, key work programmes are mapped and funded, and the next two years is about execution. In this report we update our August 2013 report by tracking progress of a subset of onshore players. We review macro developments, track well and seismic activity and compare deal flow with our previous report. We also analyse equity performance, and assess how the market has moved relative to company progress. Short-term investor focus appears to be on take-over targets, but we think that focus will revert to activity. With the Cooper Basin programmes in full swing, the event horizon may not be far off. Medium-term focus is on those driving the activity, while investing in the resource plays is more about longer-term positioning.

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Companies mentioned