Thursday, January 27, 2005

IFRS: Pour Le Meilleur ...

In the last few months, the new International Financial Reporting Standards have been the focus of the business press all over the developed world ("developed world" is not politically correct. I should say "Economically Developed Countries"). Since taking effect on January 1 2005, the IFRS/IAS are no longer an issue of remote consequences for businesses and other entities.


The business community has shown hostility (or rather wariness) to the IFRS for, they say, it imposes huge accounting and auditing expenses on reporting entities. But the new standards were elaborated and implemented pour le meilleur (for the best) .
In fact, many observers and analysts remind us that the new standards were developed to "boost economic growth" and cut costs associated with compiling consolidated financial statements. Ultimately, this will lead to greater transparency and understandability of financial statement which in turns means a broader reach for companies wishing to raise capital. And with hamonisation of the reporting requirements there will be less resources needed to "translate" prospectus, financial statements and other documents.
To Be Continued ... Stay Tuned

Posted by Editor at 8:48 AM | | Comments

Sunday, January 23, 2005

Made For The Job

(Click to visit website)
I know I am deviating from the main focus of this blog ( And I am sorry it happens so often). But I had to link this.

Rene Rivkin: Bath Robe Model. Is this the job he was made for?

MyCareer.com.au allows you to vote for your favorite star!
You can vote on whether Donald Trump, John Howard, Paris Hilton, Ian Thorpe, Anna Nicole Smith and more were made for the jobs they are doing.
Go check it out! And vote!

Posted by Editor at 9:10 PM | | Comments

Monday, January 17, 2005

How Much Are You Worth?

I am a grad' and I wonder how much I should expect to get paid for the first years in the accountancy, banking & finance industry. I mean on average, ok. Here's an indication:

Accountant Assistant ~ Av. $alary: $40,000

Accounts Payable Clerk ~ Av. $alary: $33,000

Accounts Clerk ~ Av. $alary: $30,000


For more see Accountancy Aid Australia's salary survey.

Posted by Editor at 9:14 AM | | Comments

Sunday, January 16, 2005

A Socially Responsible Investor?

Remember last month's post on ethical investing (FTSE4Good Index)? And I promised I'd post on the Dow Jones Islamic Index (Could be called "DJII4God Index" ... ... )! Well, let's put the IMANX aside for a few more days. Instead, here's question for you:

Are you a socially responsible investor?

I know. I know. You'll tell me that rational investors do not factor in a company's social impact to make decisions unless it has immediate implications for the stock's performance. Maybe the term "socially responsible" bothers you.
The way I see it, we shouldn't be stopped by the word socially. Because good social behaviour could be a criteria to find good stocks to invest in (again, this will depend on your investment style). Still not convinced? Here's another question:

Would rather invest in a socially responsible company being given a choice ? (everything else being equal)

For most of us, i think the answer is yes. Well Reputex offers Social Responsibility ratings for Australian companies. Its ratings are based on factors such as Corporate Governance, Environmental Impact, Social Impact and Workplace Practices.
Coles Myer LTD has an A+ rating for instance (and a low rating for its environmental impact).
GE Financial Services has a B rating due to a "very Low" environmental impact. Go figure!
Corporations are increasingly aware of the public cry for my sensitive and responsible corporations. Well, with the torrent of corporate donations to Tsunami victims the public is getting what it was asking for.
Big businesses are being so generous that NGO are unable to accept all their donations much to the frustration of corporations (such generosity ... isn't it amazing ).
For more news on corporate good (and bad) behaviours visit the CSR Wire. But remember, there remains a major flaw in the sort of ratings I just talked about: reliability.

Posted by Editor at 1:57 PM | | Comments


Past Trends + Ignorance = Trading Stunt-ware

Posted by Editor at 12:01 AM | | Comments

Saturday, January 15, 2005

False Accounting Rampant in China

It is happening! It is starting to make the headlines!

~ Lies, lies and more lies in state firms' audit reports ~ (Asia Times)

It is happening now but it was long long due. With its double digit growth rate China is a bonanza for foreign investors and international corporations. Every week in the papers there is an article on the "Chinese Miracle" or "China, the powerhouse of the world economy". You cannot but notice the market's bullish outlook despite investment bankers admitting that " there will be some very big setbacks along the way" (Merrill Lynch Investment Managers Australia).
Yes, over the next 15 to 20 years the action will be in China. But what kind of action? There will still be "very big setbacks" like David Hudson puts it. And that's the part that we should keep in mind. This has to be done methodically. (Yes, I am against the blind rush to be part of the action thing). The last thing we want is a Chinese economy built on sand.
Remember the Asian Crisis? ( I often come back to this because it is the only financial crisis I've ever witnessed) What was the problem again? Poor legal system and financial framework (or lack thereof). Government corruption and crony capitalism. China escaped unhurt. This certainly doesn't mean the giant could sustain a crisis emerging within its borders.
~ China Confronts Its First Financial Scandal of 2005 ~ (The WeekEnd Australian headline, January 15-16 2005)
It's happening! David Ji, founder and president of Apex was arrested in Shengzen on fraud charges. The scandal involves Communist Party official. Not a nice affair this one.
~ State companies found cheating on audit reports ~ (China View)
Ok, that's not good. But see how bad it is: "An audit of 181 Chinese state owned enterprises found that 120 submitted incomplete financial information, while 13 falsified records" (The WeekEnd Australian headline, January 15-16 2005)
~ Audit Finds US$7.7 Billion Misused ~ (china.org.cn)
? Brr. Now, someone's going to have to deal with this.
~ China Punishes Companies for Accounting Fraud ~ (People's Daily)
Look it seems the Ministry of Finance is working on the problem.

Posted by Editor at 9:07 PM | | Comments

Saturday, January 08, 2005

What Makes a Stock SEXY?

I started a group in Google Groups today! (Google rocks ... really). I started it because I am curious to know how other investors really pick stocks. And by investors I mean "mum & dad" investors rather than professionals. People who invest others' money are ususally (and they should be) restricted to an investment style. Mums & Dads often lack the resources and the expertise to choose the stocks that will give them maximum return for a given amount of risk. But this doesn't mean they don't make money. They simply do not realise abnormal returns.
After three years studying finance at university I came to realise that there is always a bias when "picking" stocks. Because we tend to identify with a certain company or a particular sector.
I have a favorite stock. Not that it is a particularly good stock (of course, depending on your investment style -Aggressive Growth, Value, Growth At a Reasonable Price - you will find that it is/isn't a good stock). It is Rayonier REIT (RYN: S&P 400). And I have been following it for a year now. It was part of an assignment I had to do at university. And it became my "Sexy Stock". Do I own it? Won't tell you ... But I find it sexy.
Now here's a question:

Is sexiness a criteria for choosing a stock?

Most definitely not. Never. But I still like the RYN.
Now if you have a sexy stock then go to http://groups-beta.google.com/group/SexyStock and tell us about it and why you think it is sexy. Or if you want send us an email at SexyStock@googlegroups.com.
I hope to get a few replies this week. If not, I will open another topic. I already have a few ideas. If you too have ideas then drop me a ligne or your link.
It's time for me to go (I have a few resumes to send).
Next post on the Sarbanes-Oxley Act.

Posted by Editor at 9:10 PM | | Comments

Wednesday, January 05, 2005

The J.O.B Market and Extravagant CEOs

And back for anther year. It isn't exactly starting the way I wished: I didn't get any reply from the positions I applied for prior to the Christmas holidays.
But that's ok. I am still in an optimistic mood. I mean, with the current shortage of accountants employers are more flexible when selecting candidate. Hay Accounting & Finance reported that employers prefer to "match personality and cultural fit rather than solely technical skills, when assessing potential employees".
That's good news because the competition is intense between accountancy job-seekers (and employers). Employers want to make sure they get the best candidates. The Acountancy Employment Activity Report (by Hays Accounting & Finance) concludes on an optimistic note for job-seekers:
With counter offers rising as a severe shortage of candidates continues, staff retention has become an important issue. We expect vacancy levels to grow as the healthy labour market continues. [...] Strong market confidence and continuing secondments of staff to Sarbanes-Oxley and IFRS project work will also create backfill temporary vacancies. Overall, activity should be strong as market confidence remains high and employers continue to expand staffing levels. As such, the next quarter [July- September 2004] should provide fascinating times for candidates and employers alike.
And it was! See for yourself! Check the July - September 04 Accountancy Employment Activity Report.
I hope this month will bring me good responses. We shall see.
Meanwhile here is one very cool book you can buy yourself on amazon.com. It looks to me like good summer reading.


CEOs Gone Wild?

Note: We'll discuss the issue of corporate governance another day. But for now let me clarify one thing. I have no problem with executives who receive (or pay themselves) fat cheques. I hope to be one of them one day ;) .
However, they should land big bonuses and perks only when they create maximum value for the shareholders. Definitely not when the company goes bust. It is a lot like the risk-return principle. Think about it: executives get compensated for the risk they take. That is the risk of being held liable if things go sour. High risk, high return.
We will talk about this is in a more constructive way another day. Until then take care.

Posted by Editor at 7:25 PM | | Comments

Find-A-Career: Investment Banking

"AUSTRALIA was the third most active market in the world for merger and acquisition last year, as investment banks gorged on takeovers in the booming property and resources ectors" (Geoff Elliott for The Australian)

And it seems this will continue in 2005. Now, that's good news for investment banks! This year they cashed in on $US90.4 billion of business in Australia alone.
The investment bank UBS "scored the most M&A work in 2004, with a role in $US61.94 billion worth in announced transactions and $US45.28 billion in completed ones." Morgan Stanley and Macquarie bank followed in 2nd and 3rd respectively.
For the industry this is excellent. I am sure investment bankers are looking foward to cash in (secretly ?!) the five-figures fruit of their hard work.
I wassurfing on UBS website - graduate section - and found some very interesting info. Thinking of a career change? How about investment banking ?

Posted by Editor at 4:20 PM | | Comments