By Raymond Chan

In the month of June, Latte with Ray was pleased to be interviewed by CCTV for the second time. The topic was on Wanda Group’s acquisition of Hoyts. Dalian Wanda Group (Chinese Name: 大连万达) is China’s "biggest private property developer" and the world's largest cinema chain operator, owning Wanda Cinemas (largest in China) and AMC Entertainment (2nd largest in US). The recent Hoyts acquisition is just another step of the group building up the global footprint.

Also in June, Latte with Ray presented at PEI Agri Investor Forum, held at Crown Convention Centre. Our fellow panel speakers include Ms Nicola Charlston (Partner, King & Wood Mallesons) and Leigh Shearman (director, Norco), Mr Ben Craw (Director, PBB Advisory) and Mr David Goodfellow (CEO, RIFA Australia). The event was well attended by 160 institutional investors, family offices and fund managers. Over the past few years, there has been a growing interest in Australian agriculture opportunities from global investors – especially our Chinese investors.

In April, we downgraded the ASX 200 valuation on the back of earning downgrades and rising bond yields. Since then the ASX 200 fell from 5,935 points to Friday’s 5,545,9 points (the low was 5,574 points in 20 May 2015).

Upcoming events to watch;

  • The potential collision between the Greek government and their creditors
  • Conference season which usually brings 'confession season' ahead of EOFY results
  • Property, utility and Infrastructure trusts going ex-distribution
  • Possible tax loss selling
  • A very strong IPO pipeline

Correction always creates opportunities. No one rings a bell at the market bottom.

Recently we ran thru a number of “Price vs Valuation” charts on ASX 100 stocks and found CBA and Lend Lease (LLC) as stocks to buy. CBA was trading on overvalued territory but the recent correction took the stock back to deep discount to valuation since 2010. Unless CBA is unable to maintain some earnings growth, this looks to be a good entry level. 

CBA – Price vs Valuation (5 year chart)

Another interesting one is LLC (Lend Lease).

LLC – Price vs Valuation (5 year chart)