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Australia Export Partners
Positive for Investment Growth (SWOT)
Negative for Investment Growth (SWOT)
Industry & Commodity Exports
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When local governments provide a favorable economic environment, the demand and value of their currencies will also increase. WikiWealth's Fundamental Currency Analysis is a combination of four different valuation methods: investment flows, purchase price parity, interest rate parity, and inflation rate parity (see Fundamental Currency Analysis). WikiWealth, and website visitors, examine the conditions for companies to prosper through the "Investor Survey." Countries with strong fundamental freedom, transparency, stability, strengths & opportunities (see Main Street Analysis), will aid the long term potential of companies. A "Buy" rating from both approaches mean a country's currency has high potential to increase in value.
Australia Summary
Australia Country Analysis ► (edit / improve) Australia (AUD) has a highly productive, capitalist economy with an emphasis on commodity exports, especially to Asia. Currency: Australia’s currency is moderately overvalued with low investment flow potential and negative purchase price parity. Investor Survey: Australia’s economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: Indonesia, China, Singapore, the UK and Japan are the top export partners, while the leading exporting industry is materials. Commodity: Australia produces a significant amount of uranium, gold, coal, copper, aluminum, lead, zinc, and silver mostly for export to growing Asian countries. SWOT Analysis: The leading Australian strength is their abundant natural resources, while no major weaknesses were identified. Trading Strategy: An overvalued currency, negative investment flow potential, but favorable business environment leads to a neutral outlook for Australian investments.
Investment Impacts (help)
Material Industry Analysis ► (edit / improve) The materials industry includes companies whose sales originate from the mining, acquisition and sale of physical substances for manufacturing-related purposes. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold. The Main Street analysis also says Hold, with SWOT strengths much great than weaknesses and SWOT opportunities less than threats. Trade: Some of the main trade hubs include Canada, Chile, Poland, Australia, Indonesia, Pakistan, Malaysia, and South Africa, while the main material commodities include aluminum, copper, lead, nickel, palladium, silicon, steel, tin, and zinc. Trading Strategy: The materials industry tends to be sensitive to economic cycles. Look for undervalued material investments during economic recessions when stock prices are low and sell material investments during the late stages of a bull markets when stock prices are high. Material stocks quickly increase at the conclusion of a recession, because materials are the primary input for the industrial sector. The global economy is currently in a recession, therefore, it is the perfect time to purchase material investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.
Australia's mineral wealth is very important to the development of China and India. Trade agreements between emerging countries and Australia increase the value of Australia's currency and companies.
China Country Analysis ► (edit / improve) China (CNY) is a fast growing communist country with the largest population in the world. Currency: China’s currency is moderately undervalued. Purchase price parity shows that China’s currency is approximately 40% undervalued, however, the other three valuation approaches show that China is fairly valued. Investor Survey: China’s economic environment is very unfavorable for long term economic growth due to the lack of economic freedom, government transparency, and the SWOT analysis. Trade: Indonesia, Pakistan, Norway, Singapore, Europe, the US are the top export partners, while the leading industry is industrial goods, usually for export. Commodity: China produces a significant amount of coal for use at home. The use of coal to provide energy leads to other health related problems. SWOT Analysis: The leading Chinese strength is their cheap labor, while the main weaknesses are political risk and corruption. Renewable energy has the opportunity to propel growth, while general pollution and an aging population could slow growth rates. Trading Strategy: An undervalued currency, average investment flow potential and an unfavorable business environment leads to a neutral outlook for Chinese investments.
China is a significant trading partner, which needs lots of raw materials to growth quickly. The proximity of Australia to China makes this relationship every more important.
Major Australia Trade Partners ► Press "Edit / Improve"
China Country Analysis ► (edit / improve) China (CNY) is a fast growing communist country with the largest population in the world. Currency: China’s currency is moderately undervalued. Purchase price parity shows that China’s currency is approximately 40% undervalued, however, the other three valuation approaches show that China is fairly valued. Investor Survey: China’s economic environment is very unfavorable for long term economic growth due to the lack of economic freedom, government transparency, and the SWOT analysis. Trade: Indonesia, Pakistan, Norway, Singapore, Europe, the US are the top export partners, while the leading industry is industrial goods, usually for export. Commodity: China produces a significant amount of coal for use at home. The use of coal to provide energy leads to other health related problems. SWOT Analysis: The leading Chinese strength is their cheap labor, while the main weaknesses are political risk and corruption. Renewable energy has the opportunity to propel growth, while general pollution and an aging population could slow growth rates. Trading Strategy: An undervalued currency, average investment flow potential and an unfavorable business environment leads to a neutral outlook for Chinese investments.
Japan Country Analysis ► (edit / improve) Japan (JPY), the second largest economy in the world, has an industrial, export oriented economy that benefits from its relationship with the USA and proximity to China. Currency: Japan’s currency (the Yen) is overvalued according to investment flow potential, the purchase price parity, and the interest rate parity. Investor Survey: Japan’s economic environment is moderately favorable for long term economic growth due to high scores on economic freedom and government transparency, but low scores on the SWOT Analysis. Trade: Indonesia, China, Singapore, the EU, Korea, and the US are Japan’s top export partners, while the leading industry is industrial manufacturing. Commodity: Japan imports many products because of its lack of arable land and energy resources. SWOT Analysis: The leading Japanese strength is their education system, while the main weakness is a declining birth rate. A major Japanese threat is the continuation of zombie companies. Trading Strategy: An overvalued currency, low investment flow potential and moderate business environment leads to a negative outlook for Japanese investments.
USA Country Analysis ► (edit / improve) The United States (US) has a highly productive, capitalist economy and is the largest and most diverse market in the world. Currency: the US dollar (USD) has the potential to increase in value especially versus the Australian and Canadian dollar because of the significant potential of undervalued companies. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: China, Japan, Mexico, and Canada are the top US trading partners, while the leading export and import are electrical machinery and vehicles, respectively. Commodity: The US produces a significant amount of coal and wheat for use at home and as an export. However, the US consumes a larger amount of oil, which contributes to their trade deficit. SWOT Analysis: The leading US strength is its entrepreneurial culture, while the main weakness is high health care cost. Energy independence has the opportunity to propel growth, while the major threat is the housing crisis, which will lower growth. Trading Strategy: An undervalued currency, high investment flow potential and favorable business environment lead to a positive outlook for US investments, which will also benefit from positive international actions.
Korea Country Analysis ► (edit / improve) Korea (KRW) has a fast growing Asian country with a market-based economy. Currency: Korea’s currency is undervalued as a result of the purchase price parity analysis. Investor Survey: Korea’s economic environment is moderate, because high scores on economic freedom are offset by low scores on the SWOT analysis. Trade: Indonesia, China, Singapore, Japan, Hong Kong are the top export partners, while Korea’s emerging industry relates to technology. SWOT Analysis: The leading Korean strength is their shipbuilding expertise, while the main weakness is their bank cross holdings. North Korea is their main threat to long term economic growth. Trading Strategy: An undervalued currency, high investment flow potential and moderate business environment leads to a slightly positive outlook for Korean investments.
UK Country Analysis ► (edit / improve) The UK (GBP) has a highly productive, capitalist economy with a strong financial services industry. Currency: The British Pound is slightly overvalued on a global basis. The purchase price parity indicates that the British Pound should fall in value over time. Investor Survey: The UK’s economic environment is very favorable for long term economic growth due to high scores on economic freedom, government transparency, and economic diversity. Trade: Belgium, India, the EU, Netherlands, and France are the top export partners, while the leading industry is financial services. Commodity: The UK produces a significant amount of natural gas and imports of cocoa for domestic consumption. SWOT Analysis: The leading UK strength is the London Stock Exchange, which aids the financial services industry. The main weaknesses include high consumer and fiscal deficits. Trading Strategy: An overvalued currency, moderate investment flow potential and very favorable business environment leads to a neutral outlook for UK investments.
Major Australia Production ► Press "Edit / Improve"
Uranium Commodity Analysis ► (edit / improve) Uranium has two main uses: 1. as a military weapon used to penetrator armor; 2. as a power source used in nuclear plants. Commodity Analysis: Uranium is rated a Buy. Uranium suppliers have low potential to increase in value; therefore, supply could decrease over time. Investor Survey: Uranium’s long term growth potential is very favorable due to high scores on sensitivity to price changes and difficulty to expand in the short term. SWOT Analysis: Strength: Uranium is the main fuel for nuclear power plants, which are expected to grow over the long term; Weakness: nuclear waste is a negative effect of using uranium fuel. Trading Strategy: The commodity analysis buy rating indicates that uranium should increase in price over the short term, while a very favorable investor survey means uranium should increase in price over the long term.
Coal Commodity Analysis ► (edit / improve) Coal is the largest source of fuel used to produce electricity in the world. Coal is also one of the largest sources of carbon dioxide emissions. Commodity: Coal is rated a Buy. Coal demanders have a high potential to grow, while coal suppliers have low potential in increase. Investor Survey: Coal’s long term growth potential is moderately favorable due to high scores on sensitivity to price changes and low sources in short supply and substitute products. SWOT Analysis: Strength: Coal is the largest source of energy worldwide; Weakness: coal produces considerable pollution. Opportunity to grow: coal’s widespread use could aid growth as the world economy grows; Threats to growth: alternative forms of clean energy may compete against coal. Trading Strategy: The commodity analysis buy rating indicates that coal should increase in price over the short term, whereas a moderately favorable investor survey means coal may not increase in price over the long term.
Lead Commodity Analysis ► (edit / improve) Lead has a variety of uses, from building construction to bullets. Commodity: Lead is rated a Buy. Lead demanders have average potential to increase in value, while lead suppliers have very low potential to increase in value. Investor Survey: Lead’s long term growth potential is low due to low scores on lack of good substitutes and SWOT threats. SWOT Analysis: Strength: Lead has a limited supply; Weakness: lead poisoning is a significant threat to the use of lead. Threats to growth: lead is difficult to dispose of and it is harmful to the environment. Trading Strategy: The commodity analysis buy rating indicates that lead should increase in price over the short term, whereas a very low investor survey means lead should decrease in price over the long term.
Zinc Commodity Analysis ► (edit / improve) Zinc is mainly used as an anti-corrosion coating on iron and steel. Commodity Analysis: Zinc is rated a Buy. Zinc demanders have a high potential to increase in value, while zinc suppliers have low potential to increase in value. Investor Survey: Zinc’s long term growth potential is very favorable due to high scores on the SWOT analysis. SWOT Analysis: Strength: zinc has anti-corrosion properties, which will benefit the growth of zinc as emerging countries continue to urbanize. Opportunity to grow: Zinc’s recyclable, non-toxic properties could benefit its growth as environmental concerns increase. Trading Strategy: The commodity analysis buy rating indicates that zinc should increase in price over the short term, while a very favorable investor survey means zinc should increase in the long term.
Nickel Commodity Analysis ► (edit / improve) Nickel is corrosion-resistant, so it has many uses in the plating of coins and magnets. Commodity: Nickel is rated a Hold, because both Nickel demanders and suppliers have a high potential to increase in value. Investor Survey: Nickel’s long term growth potential is moderately favorable due to high scores on the SWOT analysis. SWOT Analysis: Strength: Nickel helps prevent contamination when used with steel. Opportunity to grow: nickel’s demand could increase as emerging markets continue to grow; Threats to growth: high exposure could lead to health risk. Trading Strategy: the commodity analysis Hold rating indicates that nickel should stay the same price over the short term. An average investor survey means nickel should stay the same in price over the long term.
Gold Commodity Analysis ► (edit / improve) Gold is a widely used metal in the jewelry industry. Commodity: Gold is rated a Hold, because gold demanders and suppliers have a low potential to increase in value. Investor Survey: Gold’s long term growth potential is moderately favorable due to high scores on difficulty to expand in the short term and many SWOT analysis strengths. SWOT Analysis: Strength: Gold has a large, diverse growth market; Weakness: If the cost of gold is too high, then consumers might substitute other metals for gold. Opportunity to grow: gold acts as an inflation hedge investment. Threat: volatile prices may decrease the popularity of gold. Trading Strategy: commodity analyses hold rating indicates that gold should stay the same price over the short term. A moderately favorable investor survey means gold may increase in price over the long term.
Aluminum Commodity Analysis ► (edit / improve) Aluminum is one of the most widely used metals and global production is second only to iron. Commodity: Aluminum is rated a Hold. Aluminum demanders and suppliers have potential to increase in value. Investor Survey: Aluminum’s long term growth potential is moderately favorable due to high scores on the SWOT analysis. SWOT Analysis: Strength: Aluminum has a vast number of uses, which help it to maintain long term demand. Opportunity to grow: Aluminum is completely recyclable, which will help as consumers become more environmentally active; Threats to growth: Other materials with similar properties like carbon fiber could be a significant threat to aluminum. Trading Strategy: The commodity analysis hold rating indicates that aluminum should stay about the same over the short term, whereas a moderately favorable investor survey means aluminum may increase in price over the long term.
Silver Commodity Analysis ► (edit / improve) Silver is a precious metal most commonly used in jewelry. Commodity Analysis: Silver is rated a Hold. Silver demanders and suppliers have low potential to increase in value. Investor Survey: Silver’s long term growth potential is very favorable due to high scores on the SWOT analysis. SWOT Analysis: Strength: Silver has a limited supply and is widely used; Opportunity to grow: silver’s potential as a gold substitute could increase growth; Threats to growth: high prices for silver could decrease demand and hurt short term growth. Trading Strategy: The commodity analysis hold rating indicates that silver should stay the same price over the short term, whereas a favorable investor survey means silver should increase in price over the long term.
Wool Commodity Analysis ► (edit / improve) Wool is the fiber derived from the skin cells of sheep, goats, llamas, rabbits and other animals. Commodity Analysis: Wool is rated a Hold. Wool demanders have average potential to increase in value, while there was not enough information to determine whether wool suppliers have potential to increase in value. Investor Survey: Wool’s long term growth potential is moderately favorable due to high scores on SWOT opportunities. SWOT Analysis: Strength: Wool has many unique benefits that differ from other fibers; Weakness: fluctuating grain prices could increase feed cost for wool producing animals. Opportunity to grow: wool could benefit from future cloning of animals. Trading Strategy: The commodity analysis hold rating indicates that wool should stay the same price over the short term, whereas a moderately favorable investor survey means wool may increase in price over the long term.
Major Australia Consumption ► Press "Edit / Improve"
Important Australia Industries ► Press "Edit / Improve"
Material Industry Analysis ► (edit / improve) The materials industry includes companies whose sales originate from the mining, acquisition and sale of physical substances for manufacturing-related purposes. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold. The Main Street analysis also says Hold, with SWOT strengths much great than weaknesses and SWOT opportunities less than threats. Trade: Some of the main trade hubs include Canada, Chile, Poland, Australia, Indonesia, Pakistan, Malaysia, and South Africa, while the main material commodities include aluminum, copper, lead, nickel, palladium, silicon, steel, tin, and zinc. Trading Strategy: The materials industry tends to be sensitive to economic cycles. Look for undervalued material investments during economic recessions when stock prices are low and sell material investments during the late stages of a bull markets when stock prices are high. Material stocks quickly increase at the conclusion of a recession, because materials are the primary input for the industrial sector. The global economy is currently in a recession, therefore, it is the perfect time to purchase material investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.
Financial Industry Analysis ► (edit / improve) The financial services industry includes companies whose sales come from the management of money for individuals and institutions. Financial services companies include banks, insurance companies, brokerage, wealth management, and credit card companies. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold. The Main Street analysis is also a Hold, with SWOT strengths much great than weaknesses, but SWOT opportunities less than threats. Trade: Some of the main centers for financial innovation include the US, Switzerland, the EU, Netherlands, Australia, Hong Kong, and Japan. Trading Strategy: The financial industry is sensitive to economic cycles. However, financial service companies increase quickly out of recessions, because interest rates tend to be low. Look for undervalued financial investments during economic recessions when stock prices are low and sell financial investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase financial investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.
Source: http://free-trade.suite101.com/article.cfm/australias_trade_buddies
