By Kirsty Needham and Melanie Burton
SYDNEY (Reuters) – Australia announced the biggest shakeup of its foreign investment rules in almost half a century on Friday, including additional powers to force the divestment of a business if it creates a national security risk.
Citing the need to balance economic and national security, Treasurer Josh Frydenberg said all foreign investors will face greater scrutiny when bidding for sensitive assets, regardless of the size of the deal and whether the buyer is private or state-owned.
“Technology has been evolving and our geopolitical climate has become more complex,” Frydenberg said in Canberra. “In fact, the world over, governments are seeing foreign investment being used for strategic objectives not purely commercial ones.”
In one major change, the Treasurer will be given a last-resort power to vary or to impose conditions on a deal or force a divestment. A Treasury document said the power would not retrospective.
Frydenberg did not provide full details of which business sectors would be targeted under the changes, which will be made public in the next few weeks, but he did give some indication of areas of interest.
The definition of a national security business would likely cover telecommunication companies, energy and utilities businesses, the defence supply chain, and businesses that collect, store and own data deemed critical to Australia’s national security and defence, he said.
The changes, the biggest overhaul of foreign investment policy since the current framework was established in 1975, will effectively make permanent a temporary tightening of foreign investment regulations announced in March to prevent fire sales of distressed assets during the coronavirus crisis.
Under current laws, most private investments under A$275 million ($190.8 million) are not screened, while the threshold is A$1.2 billion for companies from countries such as China which have free trade agreements with Australia. The threshold is zero for state-owned enterprises.
Frydenberg did not single out China, or any other country, when announcing the overhaul but the Chinese government has in the past raised concerns with Australia about changes to foreign investment rules.
Chinese companies have been major investors in Australian resources, agriculture and property.
Public disquiet over the sale of the Port of Darwin in 2016 to Chinese company Landbridge prompted a rule change to require approval from the country’s Foreign Investment Review Board (FIRB) for critical infrastructure deals.
China dropped from second to fifth in the list of countries providing the largest sources of approved foreign investment in Australia for 2018-2019. The United States was first, followed by Canada, Singapore and Japan in 2018-2019. Chinese investment fell by almost 50% to $13.1 billion ($8.4 billion) in 2019.
The government plans to release a draft of the new rules by July for industry consultation before they are implemented on Jan. 1, 2021.
($1 = 1.4395 Australian dollars)
(Reporting by Kirsty Needham and Melanie Burton, additional reporting by Renju Jose; Editing by Stephen Coates and Jane Wardell)
Beginner investors should follow this timeless advice from Warren Buffett – Financial Post
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Taking that leap into investing your money isn’t easy. If you’re not careful, you can wind up losing money. (You probably will at some point anyway, to be fair.) Luckily for all those curious to dive into the investment world, there are plenty of experts out there who you can learn from.
For example, American investor and billionaire Warren Buffet has some timeless tips that can steer you in the right direction.
Of course, if you want to really dig in and grow your investing know-how, The Complete Finance Training & Investing Bundle is another great resource you can use to take your understanding further. Below, we’ve highlighted some timeless advice from Buffett as well as how this training bundle can help you become a better investor. Read on for details:
When you buy a stock, plan to hold onto it forever
Buying stocks isn’t like purchasing the latest fashion trend. You want to be sure you’re buying something you want 10 years down the line. “Our favourite holding period is forever,” Buffet once said. That’s because the more you buy and trade stocks, the higher your tax returns. Plus, building wealth takes time.
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There’s no easy answer to investing
Look, investing isn’t exactly complicated, but that doesn’t mean it’s simple, either. You don’t have to be a master of economics to be able to effectively invest your money, but you can’t turn to a set of rules to answer every question related to an investment. It’s something that takes time and thought to do right. “You don’t need to be a rocket scientist,” Buffet said. “Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.”
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Understand price versus value
Stock prices aren’t always the best marker to determine the value of a company. For instance, stock prices may drop during financial crises—but that doesn’t mean those companies aren’t worth investing in. After all, we’re thinking long-term here, right? These are often the best moments to buy quality stock. It’s cheaper. “Price is what you pay,” Buffet said. “Value is what you get.”
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Prices subject to change.
Africa’s Biggest Investment Takes Shape Under Islamist Threat – Yahoo Canada Finance
(Bloomberg) — Dozens of soldiers clutching AK-47s and grenade launchers watch over roaring bulldozers on the white sand beach that meets a tropical turquoise sea. They’re guarding Africa’s biggest investment: a $23 billion project to export Mozambique’s natural gas from an area increasingly besieged by an Islamist insurgency.
Companies led by Total SA will pump the gas from wells about 40 kilometers (25 miles) offshore, cool it to temperatures below minus 260 degrees Fahrenheit so that it turns to liquid, then ship it to electricity plants from France to China. The consortium is about to finalize almost $16 billion in project financing — another record for the continent.
“The work is immense,” said Ronan Bescond, the 44-year-old French chemical engineer who Total chose to lead the project after a career of nearly two decades at the company. “The first cargo of LNG must be in 2024. And we are on the right track,” he said to a handful of reporters in a prefabricated room at the site 32 kilometers south of the Rovuma River that marks the border with Tanzania.
The obstacles facing a project that’s expected to transform the impoverished southeast African nation are huge.
To achieve the target of first production for an undertaking worth billions of dollars more than Mozambique’s entire economy, developers need to move thousands of tons of equipment through territory thick with Islamic State-aligned insurgents. At one stage, a Covid-19 outbreak saw the Total site accounting for three in four of the country’s confirmed infections. All this as natural-gas prices plunged to near 25-year lows.
Militants who first pledged allegiance to IS in 2018 have carried out increasingly brazen attacks this year.
Last week, they raided Mocimboa da Praia for a third time, and occupied the town for as long as three days. It’s a crucial supply hub just 60 kilometers south of the project site and the closest port.
As many as nine workers for Total subcontractors Fenix Construction Services Lda died in the attack, Jasmine Opperman, an African analyst at Wisconsin-based Armed Conflict Location & Event Data Project, said in a Twitter post. The company didn’t answer seven calls and two emails seeking comment.
Before the gas discoveries and insurgency, the remote coastline was more famous for luxury tropical island resorts. Last month, one of the nearby hotels offered a discount price of $19,820 a night to hire out an island as a refuge from the coronavirus.
The private military company that Mozambique hired in April to provide air support to government troops in the form of helicopters fitted with machine guns has struggled to quell the violence. Lionel Dyck, the founder of Dyck Advisory Group, the firm the government employed, declined to comment when contacted by mobile phone.
Governments including South Africa, the U.S. and Portugal have indicated willingness to help fight the insurgency.
“The insurgency is a challenge but we’re happy that our defense and security forces have been playing their role,” Max Tonela, Mozambique’s energy and natural resources minister, told reporters during the June 19 site visit. “We all as Mozambicans must fight against this evil that comes from external attacks.”
About 1,300 people have died in the violence, with a further 220,000 displaced since the first attack three years ago, which also took place at Mocimboa da Praia.
For the second time, IS referred directly to the projects in a weekly newsletter this month. The group said that it would be “delusional” to think that the government could protect the investments, and warned other countries against getting involved.
The marginalization of young men in a region that’s predominantly Muslim and 1,900 kilometers away from the capital, Maputo, has helped lead to radicalization that’s fueled the insurgency, according to researchers including Saide Habibe at the Maputo-based Institute of Social and Economic Studies who have studied the origins of the fighters.
Total’s project will hire 14,000 people at peak construction, of which at least 5,000 will be Mozambican and many from the region, Bescond said at the briefing, wearing a surgical mask, as all visitors to the site must do to prevent another outbreak of the coronavirus.
The financial rewards are worth the cost to the government of the soldiers patrolling the vast compound and snipers on its perimeter fence — Total’s estimate is $50 billion in direct and indirect revenue over 25 years for the $15 billion economy.
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Indonesia says trade, investment deal with Australia takes effect – TheChronicleHerald.ca
JAKARTA (Reuters) – An Indonesia-Australia deal that eliminates most trade tariffs between the two nations and aims to open up investment, took effect on Sunday, Indonesia’s Trade Ministry said.
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), signed last year and ratified by the Indonesia’s parliament in February, aims to boost bilateral trade that was worth $7.8 billion in 2019.
“COVID-19 has resulted in economic slowdown in nearly all countries,” Trade Minister Agus Suparmanto said in a statement. “IA-CEPA momentum can be used to maintaining Indonesian trade and improve competitiveness.”
In a signing ceremony last year, the two countries said the pact would eliminate all Australian tariffs on imports from Indonesia, while 94% of Indonesian tariffs would be gradually removed.
Australia aims to boost exports including wheat, iron ore and dairy, while Indonesia hopes to increase automotive exports, textile and electronics. The deal opens up investment, including for Australian universities in Indonesia.
The ministry said in the statement it has issued three regulations to allow for implementation of the deal.
(Reporting by Fransiska Nangoy; Editing by William Mallard)
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