Corporates: Qantas, Billabong, Caltex
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It was almost expected: the downgrading of Qantas' credit rating on Friday by Moody's, the ratings agency.Qantas' interim result, revealed with the & #36;500 million capital raising a few weeks ago, showed a sharp slump in profit, and a drop in traffic.That was a combination to attract the rating agencies, and Moody's pounced on Friday.Nothing has happened since then to improve the picture; just more cost cutting such as Jetstar taking over Qantas' domestic New Zealand rotes and Qantas dropping a number of international routes to NZ, China and India).More downgrades will follow, especially when the batch of interim results are completed this week.Moody's also warned the major Australian banks last week that it was looking at their credit ratings (all AA).Standard and Poor's chopped Queensland's rating from AAA to AA plus on Friday. .Qantas shares fell to a record low after the rating was lowered one level to Baa2, two grades above junk.The outlook is stable, Moody's said in a statement. & quot;Qantas' credit profile has been adversely impacted by relatively high debt and strained profitability and cash flow, putting pressure on the rating at a time of worsening industry fundamentals, & quot; Moody's analyst Ian Lewis said in the statement. & quot;However, the sharp fall-off in consumer demand for air travel, as a result of the global economic crisis and which is to a large extent beyond Qantas' control, has outweighed the beneficial effect of these actions, placing material challenges that are more manageable at the Baa2 rating. & quot; & quot;The downgrade reflects deterioration in Qantas' credit profile over a period of time, which has significantly diminished the available cushion within the previous Baa1 rating, & quot; Mr Lewis said.The shares ended up down 4.3% on Friday at & #36;1.68.Qantas CEO, Alan Joyce said in a statement that the & quot;aviation sector is experiencing a high degree of volatility worldwide, and Qantas has had to confront that. & quot;In the current environment, we have increased our focus on earnings preservation and conservative cash management. & quot;The airline has cut its interim dividend to 6c a share from 18c a year earlier.Qantas' ratings trim and the cut in Queensland's won't be the last here by credit rating companies.In fact there are now just six companies worldwide on an AAA rating at major agencies.Two of those may fall off this list: they are major US companies, General Electric and Pfizer, the big drug group now engaged in an absurd & #36;US68 billion takeover bid. GE shares are now below & #36;US10 on Wall Street.
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Daniel Kertcher established Platinum Pursuits in 2001 as a vehicle in which to share his knowledge of strategies to use the financial markets to grow wealth, with the aim of achieving financial freedom by making your money work for you.
His argument is that until you become financially literate and develop a method where you're able to get a reasonable return on your capital (i.e. making your money work for you), you will instead be forever working hard for your money.
Daniel Kertcher personally achieved financial freedom at a relatively young age, through his knowledge of property and then financial markets investing. Through using Options and leveraged instruments such as CFDs, Daniel developed a system to trade the markets where he could benefit from the leverage when the trade went in the direction he predicted, and hedged his positions so that there was a limited downside risk.
Some people in the past have criticised Daniel's message of striving for financial freedom in a high-risk environment such as trading derivatives. However, it is not Daniel's or Platinum Pursuits' goal to encourage everyone to trade the financial markets. Every kind of investing contains an element of risk, so this level of education is aimed specifically for those who want an understanding of professional trading techniques and strategies that they hope to apply to their own capital, and it is absolutely true that many people are not yet in a position to invest a chunk of their savings.
To be truly financially literate, it can pay to explore all the options available when you are in a position to try to get ahead in life. Daniel currently presents free introductory seminars nationally on selected dates from February to November. |
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