QBE Insurance (QBE.ASX) – These stocks had a recent downturn when the oil spills in the Gulf of Mexico issue arose. In fact, QBE has no direct responsibility in the environmental impact but they do cover some of BP’s operations in the area. Also the company has a massive exposure to the US market/currency due to its overseas operations and capital. So far, nothing to worry I would say. These are high-quality shares and they will still outperform other companies within the sector as they have one of the most respected and solid managements around and a very strong future perspective. Their history of successful acquisitions says it all in terms of expansion and ambition. The share price risk would be considered moderate and would not suit all investors, but this is a long-term investment view.
Mining Tax: Our new PM Ms Gillard and Deputy Prime Minister Wayne Swan let things got a bit loose. The Miner’s got partially what they were claiming for. A reduced tax impact (from 40 to 30 per cent) but it still to be applied only for the majors (iron and coal) and existing mines. Other miners were concerned not to be included in the negotiations. Rio Tinto, BHP and Fortescue Metals were the ones approached for the discussions.
Oil and coal seam gas directors are not so happy as they are still into the existing Petroleum Resources Rent Tax and taxed at ‘Kevin Rudd’s’ 40 per cent. Conclusion? The government will be behind in $1.5bn in revenue, compared to the previous ’40% one-size-fits-all’.
ASX’s All Ordinaries Index still a bit lower than usual trading at around 4,200. A lot ot reasons behind this price action, including the ‘not so good’ company’ reports in the end of this Financial Year in Australia. Maybe it is a good moment for ‘stock hunting’.
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