The biggest question mark hanging over 2006 and beyond isn’t
whether the commodity cycle remains “stronger for longer,” but
rather just how strong and long the cycle is, says Stephen Bartholomeusz in The Age. It is evident that there is a China-inspired super cycle in
commodities occurring, and that in most commodities there is an
imbalance between demand and supply of such proportions that it may
take years for the producers to close the gap.
Corporate Australia is seemingly becoming more conservative, with gearing levels falling and share buybacks firmly in vogue, says John Durie in the Fin Review (not online). A
combination of corporate governance-inspired caution and lack of easy
domestic acquistions has meant that corporate buybacks are very much in
vogue and popular with shareholders.
Also in the Fin Review, the federal government has intervened in Telstra’s stoush with the
competition regulator over a pricing structure the carrier claims could
wipe $850 million off its annual revenue.
John Howard and senior cabinet ministers yesterday resolved to require
the regulator not to impose an unreasonable burden on any company,
lending weight to Telstra’s concerns that heavy regulations could
damage its growth prospects.
On Wall Street, US stocks closed lower overnight as the market failed to keep up some morning momentum, but
the damage was limited thanks to Pfizer’s dramatic rally following
a closely watched legal victory. The Dow Jones ended down 39.06 points at 10,836 – MarketWatch has a full report here.