22/08/2006 - 22:00

Speculative stocks lead the pack

22/08/2006 - 22:00

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This year’s total shareholder return survey results are perhaps less surprising than usual.

This year’s total shareholder return survey results are perhaps less surprising than usual.

Few of us would have failed to follow the market’s performance, especially that of the resources stocks and, more precisely, those linked to uranium.

Paladin Resources Ltd is a worthy choice in my view. This is not about some one-year-wonder, the uranium-focused player has been a consistent performer during the recent past.

We have run this survey long enough to see the full cycle, from when the major industrials led the pack to current times when small and still relatively speculative stocks are now at the vanguard of Western Australia’s healthy and sizeable listed companies sector in performance terms.

While Wesfarmers may be comparatively in the doldrums, it holds a different place in most peoples’ portfolios and, if its management direction is suited to what is in store, then it will no doubt rise again to lead the ranks.

I also took a deeper look at the stocks on this list and tried to discern the deeper trends in the economy, which are merely reflected in the stock market.

Clearly there is a belief that uranium’s time has almost come. What else is there to look for in the TSR litter?

And it is far from surprising that property focused entities have delivered the best dividend performance this year.

Perhaps something that is interesting, and again not exactly a shock, is how the market punishes companies that make big stuff-ups. Evans & Tate, iiNet, Chemeq and ERG are good examples.

The first two had a difficult financial year, the latter pair have languished longer than that. Hopefully it’s not catching.

 

Lack of leadership in planning debate

As the debate rages about development in our central city and up our coast, isn’t it time, I have to ask, we found the will to mould Perth into a city that will be as liveable today as it may be in 100 years from now?

Let’s hope some progress is made before that.

Imagine if our descendents are still wondering why there has been no development on the foreshore in front of the CBD, to name but one of our city’s flaws.

Or perhaps they will have moved on in their leisure and recreation to enjoy other things – either because that is the way of the times, or because they simply had to.

Why is this inertia present in our community? Are times too good, Perth too easy, for leaders to make tough decisions?

Do we need to be broke before we attempt to revitalise our city, using as many people do the example of Melbourne?

 

Commissioner on the wrong path

I was listening to our Police commissioner, Karl O’Callaghan, on the radio the other evening discussing the issue of violence in our key nightlife areas – Northbridge and Fremantle.

Apparently, the issue is especially of concern in the small hours of the morning when clubs shut and taxis are scarcer than usual.

I have to admit that these could be factors, but the commissioner even went so far as to suggest that narrow pavements may be part of the problem because they pack people together.

Spacious Perth, dullsville, can hardly blame its issues on overcrowding. Especially when so little violence occurs in the most popular and invariably crowded nightlife spots around the world.

The fault lies with the people causing the violence – people who can’t handle their alcohol, or have been brought up thinking that such behaviour is a prerequisite for a good time.

Most of us can stomach a certain amount of anti-social behaviour. The exception is when it is likely to pose a threat to others, especially in the form of violence.

I have little sympathy for people who think that sort of thing is tolerable – whether they are drunk or not.

And, while I think this is where hard line policing belongs, I am not averse to seeing a decent publicity campaign focusing on this type of anti-social behaviour.

 

Branding and state arts sponsorship

Next week marks the close for entries to the State Arts Sponsorship Awards, a perennial favourite of mine.

I am a believer in arts and culture being a domain for private funding, something that has not been particularly prevalent in Western Australia.

That is improving, though, and awards programs like this that are built to acknowledge the business and individuals that contribute to this important sector have helped highlight the state’s performance.

More importantly, this is not just about throwing away money in the good times. It is a strategy that has real business benefits.

A good example is Wesfarmers, which made it into our top 10 most recognised brands two weeks ago.

Even though the Wesfarmers name is not to be found on the shelves of WA’s supermarkets – leading advertising and marketing professionals concluded its brand was well known and understood.

Much of this comes from the softer style of marketing that Wesfarmers employs, funding the arts and culture in major way.

This doesn’t work for everyone but it has a growing place in our business community.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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