Sector commentary

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*Multiple Sectors

22/05/2015
ASX Spotlight conference book May 2015
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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 26 and 28 May. 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
Anteo Diagnostics , Otto Energy , Bionomics , See more..., Anteo Diagnostics, Blue Sky Alternative Investments, Dacian Gold, Dorsavi, Dubber, Eureka Group Holdings, IMF Bentham, Martin Aircraft Company, Mincor Resources, Neometals, Skilled Group, TNG, The a2 Milk Company

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Oil & Gas

18/05/2015
Nodding Donkeys - The musings of the Edison Oil and Gas team since March 2015
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Edison’s Oil and Gas team has a great deal of knowledge in the sector, with decades of cumulative experience on the buy side, sell side as well as technical and management roles in industry.

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Companies mentioned

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Oil & Gas

01/05/2015
Oil & gas macro outlook - The market is returning to equilibrium
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Since the 2015 first quarter lows, light crude oil prices have risen by around 30% despite inventories rising to record levels. Rather than inventories, the market has chosen to focus on one of the sharpest drops in the US rig count on record and the potential for a weakening US production trend in the coming months. While the lows for this cycle have probably been seen, we believe the price trend could soften near term reflecting hefty inventories and buoyant OPEC supply. The issue of Iranian exports could also weigh on prices ahead of the end June deadline for a final agreement between the world’s major powers and Iran over its nuclear programme. Looking at the balance of 2015, however, we continue to expect an upward trend in prices as the market returns to equilibrium driven by slowing non-OPEC supply growth and firming demand.

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Companies mentioned

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Technology

23/03/2015
NZ - Edison talks tech
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The rapid pace of development and diversity within the technology sector make it both one of the most rewarding and the most challenging to play from an investment perspective. As the rate of innovation accelerates across so many different disciplines and so many vertical and geographical markets, so the opportunities for value creation are increasing. Equally, gaining an in-depth understanding of the investment case becomes more challenging, as technology becomes more involved, the pace of development accelerates, business models change and competition globalises. At Edison, we feel we have built a unique global platform for bridging this gap and our inaugural Australia and New Zealand ‘Edison Talks Tech’ conferences are an important new component in this. We hope you find them enjoyable, informative and effective.

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Companies mentioned
Vista Group International , Smartpay Holdings , Serko , ikeGPS Group , GeoOp , Rex Bionics , VMob Group , SLI Systems

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Consumer Support Services

23/03/2015
AUS - Edison talks tech
Download via: Website

The rapid pace of development and diversity within the technology sector make it both one of the most rewarding and the most challenging to play from an investment perspective. As the rate of innovation accelerates across so many different disciplines and so many vertical and geographical markets, so the opportunities for value creation are increasing. Equally, gaining an in-depth understanding of the investment case becomes more challenging, as technology becomes more involved, the pace of development accelerates, business models change and competition globalises. At Edison, we feel we have built a unique global platform for bridging this gap and our inaugural Australia and New Zealand ‘Edison Talks Tech’ conferences are an important new component in this. We hope you find them enjoyable, informative and effective.

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Companies mentioned
Redflex Holdings , nearmap , My Net Fone , Freelancer , Crowd Mobile , Smartpay Holdings , Catapult Group International , Serko , Migme , VMob Group , TZ Limited , SLI Systems

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Oil & Gas

25/02/2015
Catalytic converter - Five themes from oil majors’ 2015 updates
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As the Big Oil year-end 2014 reporting season draws to an end, we reflect on the main messages from the strategy updates. Based on current guidance, majors’ organic capex is set to fall around 13% in 2015, after four straight years of capex hikes. Spend could drop more as service costs are seen declining 20-30% from their 2014 peak. Exploration and pre-FID projects – notably expensive, complex projects such as deepwater, LNG and oil sands – are prime targets for investment cuts. Base capex in high-cost regions is also being trimmed, which should accelerate global decline rates. Majors appear keener on divestments than acquisitions for now, but we would expect to see opportunistic mid-sized asset deals. In our view, Big Oil’s focus on dividends may be preventing managements from acting more countercyclically in a downturn.

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Companies mentioned

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Oil & Gas

25/02/2015
Exploration watch - Drilling returns to the Falklands
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‘Exploration watch’ is a regular Edison publication focusing on upcoming exploration activity and the impact on notable E&Ps. In this inaugural edition, we look at the upcoming campaign in the North Falklands Basin where the first well, Zebedee, is due to spud in March 2015. This campaign, targeting c 350-600mmbbl, is often referred to as ‘exploration’; however, it includes a significant element of low-risk exploration together with an appraisal opportunity, especially for those looking to expand on the existing Sea Lion footprint. With Sea Lion development FID expected in 2016, appraisal and low-risk exploration elements of the upcoming Zebedee, Chatham and Jayne East wells could all add high-value barrels to the existing 393mmboe of contingent resources identified to date. The biggest exploration targets, however, lie 40km to the south of Sea Lion where the Isobel/Elaine complex could be as big again as Sea Lion. The Falklands has seen no exploration drilling for over two years, so this campaign will be a welcome return for investors interested in what is still essentially a frontier region.

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Companies mentioned
Falkland Oil & Gas , Premier Oil , Rockhopper Exploration , See more..., Argos Resources

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Oil & Gas

30/01/2015
Catalytic converter - Inertia in US shale continues
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As the oil market awaits a negative supply response to the sharp correction in crude prices since mid-2014, we suggest a period of inertia may be ahead, with oil production, particularly from US shale, holding up in the near term. Supporting this inertia we see falling service costs, improved operating efficiencies and significant hedging as combining to sustain near-term activity. Hence, while a price correction is likely in the medium term, we forecast crude prices to remain subdued at current levels for the remainder of 2015, for which we estimate an average crude price of $52.5/bbl for the year. As 2015 capex cuts bite, hedges unwind and funding becomes increasingly difficult to secure, we expect this will form the foundation of a recovery early in 2016, where we estimate an average of $72.5/bbl will be achieved for the full year.

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Companies mentioned