Tuesday 2 July 2019

Lendlease Group (ASX: LLC), Australian Economy and Australian Dollar In General

Lendlease Group (ASX: LLC):
2 July 2019, Tuesday
(Click on the Technical Chart Above to Expand)

Attached is the Technicals for Lendlease Group which a number of people had bought and asked me about it today. The below are my opinions and for your learning:

Firstly, I had reiterated before that I do not like property stocks in general under the current economic cycle for which the interest rate cycle is not conducive to property companies and property construction companies.

Secondly, I had reiterated many times that, in my opinion, Australia will be economically punished by China -- the largest trading partner of Australia when it comes to GDP/money-making for Australia. While US is able to give economic sanctions, China does the same too. In China's perspective, Australia was instrumental in pushing the US to block and ban Huawei, and this caused China and Huawei immense losses which would not be forgiven by China easily -- this is not difficult to deduce based on logic.

This means Chinese monies which were mainly responsible for the largest and longest economic boom of Australia is a "goodbye for Australia" now and within the next few years too. So will be the same for Aussie Property Markets.

Next, look at Australia's key trading partner statistics below to know how economically important China is to Australia:

China: US$74 billion (29.2% of total Australian exports to China)
Japan: $26.2 billion (10.3%)
South Korea: $13.6 billion (5.4%)
India: $10.1 billion (4%)
United States: $9.2 billion (3.6%)
Hong Kong: $7.9 billion (3.1%)
New Zealand: $7.1 billion (2.8%)
Taiwan: $6.7 billion (2.6%)

Almost 1/3 of whatever Australia sells ends up in China. And only 3% of what Australia sells ends up in US, at a time when Donald Trump wants to use tariff to collect money from most of his trading partners, making an already harsh environment worse for Australia.

The technical chart of Lendlease Group further supports my point. All illustrations are as attached on technical chart. Key points on technical chart -- impulsive wave is down (true direction); corrective wave is up (fake direction); breakdown of large dead cat bounce channel in brown which took its time to suck in immense amount of fools' monies, followed by impulsive breakdown below brown channel's dead cat bounce; subtle supercycle down for Lendlease Group LLC as shown on chart; current execution of subtle dead cat bounce which continues to suck in fools' monies. This is a red-flag stock. There is another at least -50% wealth destruction for this company. 

The following is a generalised extrapolation of my thoughts:
This is a company which is a company within an entire industry (and possibly industries) being punished quietly by the very rich Chinese State Corporations and Chinese Monies who felt the pinch from the American Trade War. While China has to be more restrained towards US, the same cannot be said for Australia (especially when China lets Australia earn a lot of money, and does feel the sharp pain because of Huawei now, and Australia was recognised by China as one of the major contributors to this Huawei/5G jeopardy and pain).

All in all, because of the numerous deduced logic based on all the events until now, Australia and Australian currency are not expected to perform well at all in 2019, 2020 and possibly 2021 when compared to ASEAN or other emerging markets which had managed to stand neutral in the trade war. A wrong move caught in between the bouts exchanged by the 2 giants of US and China will normally land oneself into Intensive Care Unit (ICU). Unfortunately, Australia happened to walk in, and then become an unfortunate casualty.


DISCLAIMER

This analysis site, as well as the analyses in it, is created for the sole purpose of education, discussion, fundamental analysis knowledge sharing, technical analysis knowledge sharing, funds flow analysis knowledge sharing, general skills-knowledge sharing and opinions sharing. The contents of this blog are not to be taken as investment advice or inducement to trade, and I take no responsibility for any gains or losses as a result of reading my analyses, judgements and opinions. In essence, practise due diligence. 

No comments:

Post a Comment