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“Prepare for Battle”




Darryl Conroy
                                      1


Suncorp Bank
General Advice Warning




  This advice has been prepared without taking into account your particular
  objectives, financial situation or needs. For that reason, before acting on the
  advice you should consider the appropriateness of the advice having regard
  to your own objectives, financial situation and needs.

• Where the advice relates to the acquisition, or possible acquisition, of a
  particular financial product, you should obtain a Product Disclosure Statement
  relating to the product and consider the Product Disclosure Statement before
  making any decision about whether to acquire the product.
                                                                                    2
The Game Has Changed


      Market norms have broken-down

      Think Differently !

      Act Differently !


                                       3


Suncorp Bank
The Big Three
                      Europe
                    Sovereign Debt




          China                        US
         Economic                    Double Dip
         Slowdown


Suncorp Bank
Unprecedented Stimulus



     1. US      $ 2.3 trillion
     2. UK      £ 325 billion
     3. Japan   ¥ 55 trillion
     4. Europe € 1.02 trillion
     5. China   ¥ 4 trillion


Suncorp Bank
Record Low Bond Yields


        Submerging (developed)




        Emerging (BRIIC’s)



        Australia (piggy-in-the-middle)

                                           6



Suncorp Bank
Much Ado About Europe
…solvency…

        Country       Gross      Net
                    Debt/GDP   Debt/GDP
        Greece        181%       225%
        Ireland       164%      1,255%
        Spain         72%        235%
        Italy         119%       165%
        France        86%        279%
        Germany       96%        209%
        Australia     39%        106%
                                          7


Suncorp Bank
Uh Oh…
160 year high




                8


Suncorp Bank
Structural Change




                    9


Suncorp Bank
Patchwork Economy

• Bad News Cycle          • Adaptability

• Poor Confidence         • Flexibility

• Job Insecurity          • Productivity

• New Taxes               • Innovation

• Political Uncertainty   • Technology


                                           10


Suncorp Bank
Negative Tourism…




                    11


Suncorp Bank
Business Squeeze
Costs rising, but sales falling...




               Volume driven business to struggle

                               V

               Margin driven business to prosper


                                                    12


Suncorp Bank
Financial Markets
Wealth Preservation



                Cash is King
               ― Fixed Interest
               – Stocks (Dividends)
               – Commodities mixed
               ? Real Estate
                                      13


Suncorp Bank
Bank Funding
Winners & Losers




                   14


Suncorp Bank
A Tale of Two Cities




 Port Headland Donga   Parisian Chateau



                                          15


Suncorp Bank
Interest Rates




                 16


Suncorp Bank
AUD Overvalued !




                   17


Suncorp Bank
Aussie Dollar
Commodity slide




                  18


Suncorp Bank
Stocks – on trend




                    19


Suncorp Bank
“Plans are nothing; planning is
          everything.”
   ~ Dwight D. Eisenhower
                          Source: scrapetv.com

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Gympie Business Confidence Survey launch by Suncorp Bank Aug 2012

  • 1. “Prepare for Battle” Darryl Conroy 1 Suncorp Bank
  • 2. General Advice Warning This advice has been prepared without taking into account your particular objectives, financial situation or needs. For that reason, before acting on the advice you should consider the appropriateness of the advice having regard to your own objectives, financial situation and needs. • Where the advice relates to the acquisition, or possible acquisition, of a particular financial product, you should obtain a Product Disclosure Statement relating to the product and consider the Product Disclosure Statement before making any decision about whether to acquire the product. 2
  • 3. The Game Has Changed  Market norms have broken-down  Think Differently !  Act Differently ! 3 Suncorp Bank
  • 4. The Big Three Europe Sovereign Debt China US Economic Double Dip Slowdown Suncorp Bank
  • 5. Unprecedented Stimulus 1. US $ 2.3 trillion 2. UK £ 325 billion 3. Japan ¥ 55 trillion 4. Europe € 1.02 trillion 5. China ¥ 4 trillion Suncorp Bank
  • 6. Record Low Bond Yields  Submerging (developed)  Emerging (BRIIC’s)  Australia (piggy-in-the-middle) 6 Suncorp Bank
  • 7. Much Ado About Europe …solvency… Country Gross Net Debt/GDP Debt/GDP Greece 181% 225% Ireland 164% 1,255% Spain 72% 235% Italy 119% 165% France 86% 279% Germany 96% 209% Australia 39% 106% 7 Suncorp Bank
  • 8. Uh Oh… 160 year high 8 Suncorp Bank
  • 9. Structural Change 9 Suncorp Bank
  • 10. Patchwork Economy • Bad News Cycle • Adaptability • Poor Confidence • Flexibility • Job Insecurity • Productivity • New Taxes • Innovation • Political Uncertainty • Technology 10 Suncorp Bank
  • 11. Negative Tourism… 11 Suncorp Bank
  • 12. Business Squeeze Costs rising, but sales falling... Volume driven business to struggle V Margin driven business to prosper 12 Suncorp Bank
  • 13. Financial Markets Wealth Preservation  Cash is King ― Fixed Interest – Stocks (Dividends) – Commodities mixed ? Real Estate 13 Suncorp Bank
  • 14. Bank Funding Winners & Losers 14 Suncorp Bank
  • 15. A Tale of Two Cities Port Headland Donga Parisian Chateau 15 Suncorp Bank
  • 16. Interest Rates 16 Suncorp Bank
  • 17. AUD Overvalued ! 17 Suncorp Bank
  • 18. Aussie Dollar Commodity slide 18 Suncorp Bank
  • 19. Stocks – on trend 19 Suncorp Bank
  • 20. “Plans are nothing; planning is everything.” ~ Dwight D. Eisenhower Source: scrapetv.com

Editor's Notes

  1. Waiting it out, not an option
  2. Two out of three of the big risks looming over financial markets, have been quashed leaving the Greece question
  3. No discussion on the Aussie economy is complete without reference to commodity prices (coal and iron ore prices and let’s not forget LNG and coal seam gas).But not just the typical commodities, but coal, iron ore and gas!
  4. Economists forecast rate cuts, and financial markets are currently pricing a cash rate of 3.9% by June.
  5. Our currency tracks commodity prices and as we highlighted earlier commodity prices are sky high, especially those commodities important to us Iron ore, coal, gas and goldMay 2011 peak...
  6. 20 year view – on track !