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Australian investors flock to Australian equities ETPs despite March mayhem

INVESTORS showed their optimism for local equities by flocking to Australian equities in March, according to research from Rainmaker Information.

"The March report on the Australian Exchange Traded Products (ETP) market from the ASX clearly demonstrates how investors are reacting to the mayhem COVID-19 has had on world investment markets,” head of investment research at Rainmaker Information, John Dyall said.

The Australian ETP market lost $6.7 billion in market value over the month, ending at around $57 billion.

This is down from $64 billion at the end of February, a loss in percentage terms of around 10 percent.

Despite these losses investors continued to put money into the ETP market with a net inflow of $360 million in the month of March.

A sign of the caution showed by investors is that this was only one quarter of February’s net inflows of $1.5 billion, Mr Dyall said.

However, there was a greater turnover of ETPs, with traded value reported at being two and a half times the size of February’s traded value ($17.8 billion versus $7.2 billion).

The product with the largest net outflows was the Australian High Interest Cash Fund, which lost $257 million or 13 percent of funds under management.

The product with the largest increase in assets under management was ETFS Physical Gold, which increased by $189 million on net inflows of $135 million to the end the month with $1.6 billion.

The product with the highest net inflows was Vanguard Australian Shares Index ETF with net flows of $538 million.

On an asset class basis, Australian equities were popular with net inflows of $1.2 billion, with the largest inflows going into market cap index products.

“One would have expected fixed interest products to be popular in this period, but the reported dislocation in fixed interest markets seemed to have an effect,” Mr Dyall said.

Fixed interest had the highest net outflows, losing $770 million, a significant turnaround from the $488 million it gained in February.

Only one fixed income product, the Vanguard Australian Government Bond Index, had net inflows of any value, and that was only $11 million.

“From a quality and default perspective, this would be one of the safest investments in the Australian ETP market," Mr Dyall said.

International equities experienced a slight outflow of $56 million over February, although they lost $2 billion in assets.

The most notable action was the repositioning of portfolios away from currency unhedged products towards currency hedged products.

Over March the Australian dollar fell 5 percent against the US dollar and has fallen 13 percent since the start of the year.

The iShares Core S&P 500 ETF had the largest net outflows of $156 million, while its hedged counterpart iShares Core S&P 500 AUD Hedged ETF had the second highest net inflows of $115 million.

In fact, the top seven international equities net inflow products were all currency hedged.

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Most Queensland resource, energy job vacancies advertised in April

AMID TIGHTER restrictions with the COVID-19 response, half of the 800 job vacancies in Queensland’s resources and energy sector were listed in the last fortnight on employment website Seek. 

Queensland Resources Council chief executive Ian Macfarlane said while the resources sector was working tirelessly with government, its suppliers and communities to slow the spread of COVID-19, companies were still hiring. 

“Before COVID-19, one in seven Queensland jobs – or 372,000 full-time equivalent jobs – were supported by the resources sector,” Mr Macfarlane said. 

“COVID-19 and the restrictions have caused widespread job losses and underemployment. The resource sector is hiring and those job vacancies are across the State.” 

There are 799 job vacancies in the Queensland resources, mining and energy sector advertised on Seek, with 420 of those positions advertised in the last fortnight. 

The vacant positions are advertised in the following regions:

  • 25 in Cairns and Far North
  • 41 in Townsville
  • 48 in Mount Isa
  • 52 in Western Queensland
  • 305 in Mackay and Coalfields
  • 75 in Rockhampton and Capricorn Coast
  • 177 in Gladstone and Central Queensland
  • 11 in Toowoomba and Darling Downs
  • 141 in Brisbane

Some job vacancies are advertised in multiple regions.

www.qrc.org.au

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Growing Australian renewable energy startups

ON BEHALF OF the Australian Government, the Australian Renewable Energy Agency (ARENA) has announced $480,000 in funding over the next 12 months to EnergyLab Australia Pty Ltd (EnergyLab) to support the Australian startup acceleration program designed to assist clean energy entrepreneurs.

Since 2017, EnergyLab has supported more than 80 Australian energy startups through its programs. This includes the innovative energy retailer Amber Electric that allows customers to reduce their energy costs via access to wholesale electricity prices. Amber Electric recently closed a $2.5 million funding round. 

Recruitment of entrepreneurs and startups for the Scale Up program is underway now, with chosen applicants to be announced later in 2020.

ARENA CEO Darren Miller said the project would help Australia’s brightest clean energy entrepreneurs turn their ideas into reality.

“Startups and entrepreneurs play an important role in accelerating the uptake of clean energy solutions, however, they can also face challenges in reaching scale and aren’t equipped to overcome hurdles such as high capital requirements, geographic constraints and revenue delay," Mr Miller said.

“EnergyLab, through mentoring and supporting startups, will help us to see an increase in expertise, skills and capacity in the renewable energy technology sector and identify pathways to commercialisation to keep Australia at the forefront of renewable energy innovation,” he said.

EnergyLab CEO James Tilbury said, “ARENA’s support will enable us to do even more to support Australia’s leading clean energy entrepreneurs. 

“In particular, this funding allows us to launch a Scale Up Program to provide the best late-stage energy startups with the support they need to reach their full potential.”

EnergyLab, a start-up accelerator program, has four core programs: 

  • Pre-Acceleration – helping entrepreneurs with an idea to test its commercial viability.

  • Acceleration – EnergyLab’s flagship program helping the most promising energy startups launch a product into the market, secure first customers and raise a seed funding round. 

  • Scale Up – providing late-stage energy startups with introductions to decision-makers at Australia’s most innovative energy utilities, mentorship from Australia’s most successful energy-sector founders, and advice from Australia’s most active energy-sector investors. 

  • Women in Clean Energy Fellowship – equipping women interested in energy entrepreneurship with the skills, knowledge and support they need to start a company. 


EnergyLab is also supported by a number of energy industry stakeholders such as Origin Energy, APA Group, Powerlink, The University of Technology Sydney, Ausnet Services, Climate-KIC, KPMG, Aperion Law, and the Clean Energy Finance Corporation.

www.arena.gov.au

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Unions condemn Federal Government for treatment of cruise ship crews

THE Maritime Union of Australia (MUA) and the International Transport Workers’ Federation (ITWF) have condemned the "brutal treatment of more than 15,000 international crew from more than 50 nationalities engaged in the cruise ship industry in Australian waters".

Last week, the union and the federation wrote to Prime Minister Scott Morrison asking for "the same level of cooperation that industry unions and government have engaged in across Australia in response to this terrible pandemic".

"We had asked for leadership and a humanitarian response to stranded seafarers drifting around the Australian coast," a union spokesperson said.

"Instead Morrison reverts to type and has ordered all ships to leave Australian waters without any regard for the health, safety, dignity, or for the future safety of 15,000 international workers.

"Ordering flag of convenience ships back to their home ports demonstrates no understanding of the industry and sets a fully crewed flotilla adrift at the worst possible time.

"The Morrison Government’s reckless and heartless treatment of international workers will put the safety of Australian cruise ship workers at risk in other countries."

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NSW Government secures future of council-run childcare services with funding boost

THE United Services Union has commended the NSW Government for securing the future of council-run childcare services with an $82 million funding boost, saying the move has provided certainty for parents and staff during the current health crisis.

Local government is the largest provider of childcare services in NSW, but the exclusion of councils from the Federal Government’s $1,500 per fortnight JobKeeper payment threatened to cause the closure of hundreds of centres due to a major funding shortfall.

The NSW Government’s funding package for local councils will ensure these centres can remain open to provide care for the children of essential workers during the coronavirus pandemic.

The USU, which represents local government employees in NSW, commended Local Government Minister Shelley Hancock for genuinely listening to the concerns of the sector and providing urgent funding to keep centres operating.

“When the Federal Government announced their childcare package, it quickly became clear that the decision to exclude local government from the JobKeeper component left a massive budget hole that would force hundreds of childcare centres to close their doors,” USU general secretary Graeme Kelly said.

“The Minister for Local Government listened to those concerns, met with the industry unions and Local Government Association NSW, and took immediate action to fund this shortfall, ensuring council-run facilities will receive the same level of support as private providers.

“The ongoing provision of safe, high-quality childcare by local government is vitally important, allowing families with young children to keep our hospitals, schools, supermarkets, and supply chains operating during this crisis.

“As the largest provider of childcare services in NSW, councils are playing a vital role in supporting local communities through the current health crisis.”

But Mr Kelly warned that other essential services provided by local government remained at risk, highlighting the need for the Federal Government to provide a stimulus package to the sector.

“While the future of childcare has been secured, many other essential services provided by councils remain at risk in the current crisis, which is why the Federal Government needs to urgently develop a stimulus package for local government,” he said.

“This should include a review of the decision to leave councils out of the JobKeeper arrangements, along with financial assistance to enable councils to support their communities by preserving jobs.

“These steps should be combined with a direction to local councils to retain all current full-time, part time and casual employees, with training and redeployment allowing them to provide essential community services during the current pandemic.”

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