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Date Posted: 16:05:46 05/16/10 Sun
Author: (Moon New 11.05am Friday May 14th 2010)
Subject: Current moon waxing crescent 10%=at 9am--Monday May 17th 2010
In reply to: detected as a spammer 9am Monday 17th of May 2010 's message, "The outlook for mining company profits and valuation is plainly negative." on 16:03:57 05/16/10 Sun

>The outlook for mining company profits and valuation
>is plainly negative. A significant new tax will have
>the effect of making investment in Australia much less
>attractive. The government's actions clearly lift the
>sovereign risk bar - changing the goal posts is not a
>good look. It certainly isn't a simpler tax system as
>the government promised.
>
>But if it is implemented, and it is still a big "if",
>the new tax won't kick in until July 2012. Will the
>Senate pass the Government's reform measures in their
>entirety? Will resource companies successfully lobby
>to have the tax watered-down? Will the Rudd government
>even be re-elected?
>
>We think the safest course of action is to assume the
>worst, with all recommendations implemented. If you
>can still buy companies at fair value, even including
>downgrades for RSPT you effectively have a free option
>on the legislation being softened, or better still,
>not getting through at all.
>
>It's worth considering the offshore petroleum industry
>has lived with a 40% resources rent tax (PRRT) since
>1987, though admittedly with more favourable offsets
>than proposed under RSPT.
>
>Under the RSPT our BHP valuation declines 15.5%. No
>change to near term earnings.
>
>Energy Resources of Australia Limited (ERA)
>Update: Resource Super Profits Tax not so Super
>Recommendation: Accumulate Change: Upgrade
>The Rudd government proposes a 40% Resource Super
>Profits Tax (RSPT) on top of corporate tax and a
>reduction in corporate tax rate ultimately to 28%.
>This response to the Henry Review needs careful
>consideration.
>
>Not all aspects of the design of the new tax have been
>defined - in fact far from it - and full implications
>for the industry will remain uncertain until
>clarification emerges. Be that as it may we attempt a
>first blush interpretation on the consequences for
>miners. Full details can be found in our Special
>Report "The Six Wives of Henry".
>
>The outlook for mining company profits and valuation
>is plainly negative. A significant new tax will have
>the effect of making investment in Australia much less
>attractive. The government's actions clearly lift the
>sovereign risk bar - changing the goal posts is not a
>good look. It certainly isn't a simpler tax system as
>the government promised.
>
>But if it is implemented, and it is still a big "if",
>the new tax won't kick in until July 2012. Will the
>Senate pass the Government's reform measures in their
>entirety? Will resource companies successfully lobby
>to have the tax watered-down? Will the Rudd government
>even be re-elected?
>
>We think the safest course of action is to assume the
>worst, with all recommendations implemented. If you
>can still buy companies at fair value, even including
>downgrades for RSPT you effectively have a free option
>on the legislation being softened, or better still,
>not getting through at all.
>
>It's worth considering the offshore petroleum industry
>has lived with a 40% resources rent tax (PRRT) since
>1987, though admittedly with more favourable offsets
>than proposed under RSPT.
>
>Under the RSPT our ERA valuation declines almost 20%.
>
>Origin Energy Limited (ORG)
>Update: Resource Super Profits Tax
>Recommendation: Buy Change: Unchanged
>The Rudd government proposes a 40% Resource Super
>Profits Tax (RSPT) on top of corporate tax and a
>reduction in corporate tax rate ultimately to 28%.
>This response to the Henry Review needs careful
>consideration.
>
>Not all aspects of the design of the new tax have been
>defined - in fact far from it - and full implications
>for the industry will remain uncertain until
>clarification emerges. Be that as it may we attempt a
>first blush interpretation on the consequences for
>miners. Full details can be found in our Special
>Report "The Six Wives of Henry".
>
>The outlook for mining company profits and valuation
>is plainly negative. A significant new tax will have
>the effect of making investment in Australia much less
>attractive. The government's actions clearly lift the
>sovereign risk bar - changing the goal posts is not a
>good look. It certainly isn't a simpler tax system as
>the government promised.
>
>But if it is implemented, and it is still a big "if",
>the new tax won't kick in until July 2012. Will the
>Senate pass the Government's reform measures in their
>entirety? Will resource companies successfully lobby
>to have the tax watered-down? Will the Rudd government
>even be re-elected?
>
>We think the safest course of action is to assume the
>worst, with all recommendations implemented. If you
>can still buy companies at fair value, even including
>downgrades for RSPT you effectively have a free option
>on the legislation being softened, or better still,
>not getting through at all.
>
>It's worth considering the offshore petroleum industry
>has lived with a 40% resources rent tax (PRRT) since
>1987, though admittedly with more favourable offsets
>than proposed under RSPT.
>
>We lower our ORG valuation 10% for RSPT risk.
>
>Rio Tinto Limited (RIO)
>Update: Resource Super Profits Tax not so Super
>Recommendation: Buy Change: Upgrade
>The Rudd government proposes a 40% Resource Super
>Profits Tax (RSPT) on top of corporate tax and a
>reduction in corporate tax rate ultimately to 28%.
>This response to the Henry Review needs careful
>consideration.
>
>Not all aspects of the design of the new tax have been
>defined - in fact far from it - and full implications
>for the industry will remain uncertain until
>clarification emerges. Be that as it may we attempt a
>first blush interpretation on the consequences for
>miners. Full details can be found in our Special
>Report "The Six Wives of Henry".
>
>The outlook for mining company profits and valuation
>is plainly negative. A significant new tax will have
>the effect of making investment in Australia much less
>attractive. The government's actions clearly lift the
>sovereign risk bar - changing the goal posts is not a
>good look. It certainly isn't a simpler tax system as
>the government promised.
>
>But if it is implemented, and it is still a big "if",
>the new tax won't kick in until July 2012. Will the
>Senate pass the Government's reform measures in their
>entirety? Will resource companies successfully lobby
>to have the tax watered-down? Will the Rudd government
>even be re-elected?
>
>We think the safest course of action is to assume the
>worst, with all recommendations implemented. If you
>can still buy companies at fair value, even including
>downgrades for RSPT you effectively have a free option
>on the legislation being softened, or better still,
>not getting through at all.
>
>It's worth considering the offshore petroleum industry
>has lived with a 40% resources rent tax (PRRT) since
>1987, though admittedly with more favourable offsets
>than proposed under RSPT.
>
>Under the RSPT our RIO valuation declines 13.3%. No
>change to near term earnings.
>
>Santos Limited (STO)
>Update: Resource Super Profits Tax
>Recommendation: Accumulate Change: Downgrade
>The Rudd government proposes a 40% Resource Super
>Profits Tax (RSPT) on top of corporate tax and a
>reduction in corporate tax rate ultimately to 28%.
>This response to the Henry Review needs careful
>consideration.
>
>Not all aspects of the design of the new tax have been
>defined - in fact far from it - and full implications
>for the industry will remain uncertain until
>clarification emerges. Be that as it may we attempt a
>first blush interpretation on the consequences for
>miners. Full details can be found in our Special
>Report "The Six Wives of Henry".
>
>The outlook for mining company profits and valuation
>is plainly negative. A significant new tax will have
>the effect of making investment in Australia much less
>attractive. The government's actions clearly lift the
>sovereign risk bar - changing the goal posts is not a
>good look. It certainly isn't a simpler tax system as
>the government promised.
>
>But if it is implemented, and it is still a big "if",
>the new tax won't kick in until July 2012. Will the
>Senate pass the Government's reform measures in their
>entirety? Will resource companies successfully lobby
>to have the tax watered-down? Will the Rudd government
>even be re-elected?
>
>We think the safest course of action is to assume the
>worst, with all recommendations implemented. If you
>can still buy companies at fair value, even including
>downgrades for RSPT you effectively have a free option
>on the legislation being softened, or better still,
>not getting through at all.
>
>It's worth considering the offshore petroleum industry
>has lived with a 40% resources rent tax (PRRT) since
>1987, though admittedly with more favourable offsets
>than proposed under RSPT.
>
>We lower our WPL valuation 10% for RSPT risk. No
>change to near term earnings.
>
>Woodside Petroleum Limited (WPL)
>Update: Resource Super Profits Tax
>Recommendation: Buy Change: Unchanged
>The Rudd government proposes a 40% Resource Super
>Profits Tax (RSPT) on top of corporate tax and a
>reduction in corporate tax rate ultimately to 28%.
>This response to the Henry Review needs careful
>consideration.
>
>Not all aspects of the design of the new tax have been
>defined - in fact far from it - and full implications
>for the industry will remain uncertain until
>clarification emerges. Be that as it may we attempt a
>first blush interpretation on the consequences for
>miners. Full details can be found in our Special
>Report "The Six Wives of Henry".
>
>The outlook for mining company profits and valuation
>is plainly negative. A significant new tax will have
>the effect of making investment in Australia much less
>attractive. The government's actions clearly lift the
>sovereign risk bar - changing the goal posts is not a
>good look. It certainly isn't a simpler tax system as
>the government promised.
>
>But if it is implemented, and it is still a big "if",
>the new tax won't kick in until July 2012. Will the
>Senate pass the Government's reform measures in their
>entirety? Will resource companies successfully lobby
>to have the tax watered-down? Will the Rudd government
>even be re-elected?
>
>We think the safest course of action is to assume the
>worst, with all recommendations implemented. If you
>can still buy companies at fair value, even including
>downgrades for RSPT you effectively have a free option
>on the legislation being softened, or better still,
>not getting through at all.
>
>It's worth considering the offshore petroleum industry
>has lived with a 40% resources rent tax (PRRT) since
>1987, though admittedly with more favourable offsets
>than proposed under RSPT.
>
>We lower our WPL valuation 5% for RSPT risk. No change
>to near term earnings.
>
>
>Top
>
>
>Back to Stock Market Commentary Headlines
>
>
>
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>Neither Morningstar, nor its affiliates nor their
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>is general advice that has been prepared by
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>AFSL: 240892 (a subsidiary of Morningstar, Inc.),
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