Insolvency Insights - Analysis of ASIC's November 2013 External Administration Appointments Statistics

Corporate Finance & Restructuring

January 13, 2014

OVERVIEW 

Records show that up to November 2013, 10,046 companies had entered external administration in 2013, still on pace to deliver a record result for 2013.

Economic indicators for November saw increasing measures on a number of consumer related fronts, driven by record low interest rates. Business related indicators, such as the AIG Performance of Manufacturing Index were weaker, falling by 5.4 points in November, to 47.7 points.

A report prepared by FTI Consulting covering the North American holiday retail sales for 2013 raised the interesting point that continued increases in gift card sales had slowly shifted large amounts of holiday sales into January over time. The FTI Consulting Annual Holiday Retail Report tracks US retail data back to the early 90's and provides an annual insight into the trends and challenges of the retails sector in North America. Most of these trends are also evident in the local market.

With moderate to strong figures seen across economic indicators, a number of market commentators now hold the view that the Reserve Bank of Australia (RBA) will not cut the cash rate again this cycle, with an extended period of low interest rates having buoyed economic activity.

The economy therefore seems finely poised at the beginning of 2014 with a mixture of positive and negative forward looking indicators. In our view, the strength of activity in areas like the IPO market, retail trade, property prices and the AUD exchange rate in the first quarter of 2014 will set the scene for the rest of the year. 


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