Exclusive Henley startup club launches in Sydney with broadside for tech hubs

Trimantium Capital founder and Henley Club president Phillip Kingston. Photo: Ben PedrochiOne of Australia’s leading social impact investors will launch a new social club saying the rise of innovation hubs and coworking spaces do not fix real problems and can ultimately have a negative impact on their members.
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Trimantium Capital founder Phillip Kingston is heading up the targeted social movement known as the Henley Club, which will open in Sydney this week.

Henly Club differs from recently launched startup hubs such as Stone & Chalk, by operating as a private members social club, running events and offering its members networking opportunities. Mr Kingston questioned the value of startup hubs and accelerators to the community they purport to serve.

“Coworking spaces and incubators are systemically broken. They are often marred by a commercial imperative but fundamentally they do not solve a real problem,” Mr Kingston said.

“There is a definitional bias in which companies that take off will leave, so members are exposed to people who not moving out, and there are negative consequences to this. There is also no perverse incentive [with Henley Club] where a big investor wants first dibs on any emerging ideas.” Melbourne success

The Henley Club runs events and workshops for its members. Sydney will be the second chapter of the club, which has been running in Melbourne since 2012.

It has hundreds of members, many of whom have become investors, board members or mentors for each other. Its main focus is on innovation and technology entrepreneurs, social enterprise and young professionals.

One example of the network benefits of the club can be seen in the rise of the New Palm Court Orchestra, which combines jazz, classical and improvising musicians and was launched by pianist, composer and Henley member Gemma Turvey.

Mr Kingston said most existing technology co-working spaces and accelerator programs had very narrow focus, and curtailed the creativity and connections required to launch genuinely progressive organisations and businesses.

“There are a lot of people working in innovation and progress. A wider community solution is going to drive more meaningful and robust change that people actually want and need than political solutions.”

The club requires referrals to join and has a series of quotas including an equal split of male and female members, as well as racial and religious diversity quotas.

“Connectivity and building social capital have clear short and long term benefits,” Mr Kingston said.

“There is a massive fragmentation of capital networks. This is about bringing groups of people with answers to problems together with people with connections and money to support them.”

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ASX set for strong recovery, Deutsche’s top stock picks include Harvey Norman

Deutsche says Harvey Norman and a string of other stocks are strong buys. Photo: Scott Barbour
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History suggests the ASX 200 index is on track for gains of about 10 per cent over the next six to 12 months – as long as Australia avoids a recession, according to Deutsche Bank.

In addition to the big four banks, financial market plays and healthcare stocks, Harvey Norman, Echo Entertainment, Flight Centre, Boral, Fletcher Building, Stockland, REA Group, QBE and AMP were strong buys, Deutsche said, while resource stocks still looked too expensive.

Deutsche’s report, Corrections, Current Valuations and What to Buy, noted that the ASX200 had fallen 15 per cent over the past six months. Since 1960, there had been 13 such corrections.

“There are some 20 per cent-plus rebounds over the ensuing 6 to 12 months, but also some 20 per cent-plus falls,” Deutsche said. “The average is flat performance.”

However, the picture was rosier if corrections that preceded recessions were excluded.

“The market tends to rally following a 15 per cent fall provided no recession develops,” Deutsche said.

“Given our view that a recession is not imminent, we expect the market to rise in a similar fashion to historical precedents. Indeed, the market is already up 5 per cent since last Monday’s trough.” Resources expensive 

The ASX 200 was trading around 5202 at Monday noon, AEST, down more than 1 per cent for the day but 5.5 per cent higher than last Monday’s nadir of 4929.7.

Deutsche’s paper used a variety of price-earnings ratios to determine the value of the market: forward P/E ratio; trailing P/E ratio; modified trailing P/E ratio; cyclically adjusted P/E ratio; and Deutsche’s own “fair-value” model, which takes into account inflation, real interest rates, the Australian dollar and recent earnings per share revisions.

According to Deutsche’s analysis, both the forward and trailing P/E ratios were still 7 per cent above the historical average, suggesting the market was overvalued.

But other P/E ratios told a different story. The cyclically adjusted P/E ratio was 12 per cent below the historical average, the fair-value model was 2 per cent below the historical average and the modified trailing P/E ratio – considering return on equity minus cost of equity – was 17 per cent below the historical average, suggesting a cheap market.

Amid major sectors, “resources still look expensive, banks seem cheap and industrials are in the middle,” Deutsche said.

Among industrials, cyclicals are trading at a 5 per cent discount to defensives.

“This is not especially large, but does suggest that cyclicals offer marginally more value.” On path to 6000

Deutsche also slashed its ASX 200 predictions, tipping 5600 by the end of 2015 (previously 6200) and 5800 by mid-2016 (previously 6350).

It tipped 6000 by the end of 2016.

UBS, like Deutsche, was not enthusiastic about prospects for the market.

“Valuation does not appear overly compelling in absolute terms, but we believe relative values versus low interest rates is the key positive support.

“Given headwinds from banks and resources, as well as a subdued outlook for the domestic economy, medium-term market prospects beyond a short-term bounce appear constrained by mediocre earnings growth.

“We believe the positive earnings impact from further falls in the Australian dollar … remains the key potential positive in the earnings cycle,” UBS said.

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Sydney weather: Mild start to spring ahead of warm burst

If it doesn’t feel like spring yet – it should do soon. German tourist, Vincet enjoying the sunshine in the Royal Botanic Gardens. Photo: Louie Douvis
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South-eastern Australia had its coolest winter for decades in some regions but seasonal temperatures for most of the country were above average and the mercury will soon start to climb, meteorologists said.

With winter officially ending on Monday, Sydney will have had its coldest winter by mean temperatures since 2010. For Melbourne, it was the most chilly since 1989, according to Weatherzone.

The Bureau of Meteorology said that final day figures could affect the comparisons for Sydney with the latest temperatures matching those of the 2012 winter. Maximums for the city are running at 0.8 degrees above the 1961-90 average and minimums 0.1 degrees below.

For Melbourne, the mean temperatures were just 0.1 degree below 1997’s level so Monday’s result “could conceivably push it level” with that year, making it only the coldest in eight years, Blair Trewin, senior climatologist with the bureau, said.

“The last couple of winters have been quite mild across south-eastern Australia, so this year was more typical of what we used to get,” Ben McBurney, a meteorologist with Weatherzone, said. “It has certainly come as quite a shock for some.”

Sydney, for instance, will come in about 1 degree above the long-term average for temperatures across the winter. Although the early mornings felt cold, only July among the three months of winter was below average for minimums – and only just, by about 0.1 degree, said Rob Sharpe, also a Weatherzone meteorologist.

Australia as a whole will post a warmer-than-average winter, particularly for the north and west, according to the Bureau of Meteorology. See chart below:

September will get off to a mostly sunny start in Sydney and Melbourne on Tuesday before rain arrives later in the week, particularly Thursday.

The low pressure trough, though, is unlikely to develop into an east coast low and will instead head “straight out to sea”, Mr Sharpe said.

Conditions, though, should warm up early next week, particularly for Sydney where a string of days with tops of 22-23 degrees can be expected, he said.

“It will feel like we’re getting into spring,” he said.

Nationally, the most notable warmth was in WA and Queensland, Dr Trewin said. Below-normal temperatures were largely confined to the south-east regions of the country, particularly for Victoria, Tasmania, southern NSW and southern SA.

“NSW hasn’t had a below-average winter for mean temperatures since 1997, a record which will not be spoilt in 2015,” Dr Trewin said.

Spring outlook

The bureau last week released its three-month weather outlook for the country, predicting a wetter-than-average spring for central and western parts of the country and more average conditions for the rest.

The additional cloud expected will likely mean day-time temperatures will be mild for spring, the bureau said:

The odds, though, strongly favour milder than average overnight temperatures during the September-November period, according to the bureau:

Rainfall and climate influences

Rainfall during the winter months was on the low side for both Sydney and Melbourne.

Sydney received about 229 millimetres of rain over the June-August period, or about 74 per cent of its long-run average, Weatherzone said.

Melbourne’s 124 millimetres was about 84 per cent of its usual for winter.

The sub-par rain came as a strong El Nino event developed in the Pacific. Such events tend to see rainfall shift away from Australia as easterly trade winds stall or reverse.

The winter, though, would have been drier across much of southern Australia if not for the countering influence of exceptionally warm waters in the Indian Ocean. (See chart of temperature anomalies below:)

“Generally speaking, [the Indian Ocean warmth] is going to moderate the effects of the El Nino, particularly during the late winter and into spring,” Mr Sharpe said.

The record El Nino year of 1997-98 was characterised by close to average rainfall across much of Australia in large part because of moisture still reaching much of the country because of favourable Indian Ocean conditions leading to more convection.

“It looks like [the El Nino] might not be all that bad for Australia,” Mr Sharpe said, adding that its impacts globally may still be large.

Weatherzone is owned by Fairfax Media, publisher of this website.

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Trade Union Royal Commission: Dyson Heydon stays on as Commissioner

Dyson Heydon arrives at the royal commission on Monday morning ahead of delivering his decision. Photo: Ben Rushton Australian Council of Trade Unions president Dave Oliver speaks to the media after the decision. Photo: Dominic Lorrimer
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Heydon shows why judges really are a breed apartAttending Liberal event does not mean I back Liberals: Heydon

Dyson Heydon has ruled he will continue as the head of the royal commission into trade unions despite being accused of bias for agreeing to appear at a Liberal Party fundraiser.

In a short hearing on Monday, Mr Heydon dismissed an application by unions to have him removed as commission chair after he accepted an invitation to speak at the Sir Garfield Barwick Address.

“I have considered all the submissions. In my opinion, the applications must be dismissed. I publish my reasons,” Mr Heydon said at the end of the five minute hearing.

In the 67-page judgement of his reasons, Mr Heydon ruled “it is not the case that a fair-minded lay observer might apprehend that I might not bring an impartial mind” to the inquiry.

He rejected the unions’ submission that the Sir Garfield Barwick address was a “Liberal Party event”, saying the “mere fact that  a person agrees to deliver a speech at a forum does not rationally establish that the person is sympathetic to, or endorses the views of, the organiser of the forum”.

The government welcomed the decision but unions said they would be reading the judgment carefully before announcing whether they would appeal.

Mr Heydon was forced to consider his position after Fairfax Media revealed he was listed as a guest speaker at the Sir Garfield Barwick Address, a Liberal Party fundraiser.

The commissioner withdrew from the event but unions said his acceptance of the invitation gave the appearance of a political allegiance – with the commissioner himself left to make the ruling on whether it was a case of apprehended bias.

He had first been due to make a ruling last Tuesday, which he delayed until last Friday.

That date was again pushed back to Monday after fresh claims emerged Mr Heydon only withdrew from the event after he was alerted to possible media interest by counsel assisting the royal commission, Jeremy Stoljar SC.

Mr Heydon told the commission on Monday he had received three sets of written submissions on Friday afternoon – one from the CFMEU, one from the ACTU and one from the AWU.

But he had determined the application should be dismissed.

In his reasons, Mr Heydon noted he only read emails printed out by his personal assistant and in this case, he did not read attachments about Sir Garfield Barwick address.

Responding to the decision, Attorney-General George Brandis said the government was pleased.

“I’m not at all surprised by this decision, it’s a decision that I was privately expecting because the case for apprehended bias, applying the appropriate legal tests is so thin,” Senator Brandis told Sky News.

He said it would difficult “for anyone reasonably to conclude that he was biased to the Liberal Party” when Mr Heydon said he had withdrawn from the event as soon as he was aware it was a fundraiser.

“One of the reasons I recommended to the Prime Minister that we appoint Dyson Heydon to conduct this royal commission is that you could always foresee that the Labor Party and the union movement would throw everything at this person because they had so much to lose by the corruption in the union movement being exposed,” Senator Brandis said.

“Therefore I wanted someone whose reputation was so strong, whose integrity was so beyond question that he would withstand all the mud that has been flung at him by the Labor Party, the union movement and its surrogates in the parliamentary Labor Party.”

But ACTU secretary Dave Oliver said the royal commission’s reputation was now “terminally tarnished” as a result of Monday’s ruling.

“Despite the decision today of Dyson Heydon, the reality is that this royal commission is now terminally tarnished,” Mr Oliver said.

“Any recommendation out of this can’t be taken seriously in respect of looking at it for the political nature of this commission.”

He said unions would consider and read the judgment before deciding whether to appeal the decision in the Federal Court but renewed calls for Mr Abbott to shut the commission down.

“We have only just received it. We will need to talk to our legal counsel and we will engage with our affiliates and make an announcement in due course.”

“Look, the fact is he [Mr Heydon] has had to sit in judgment of himself. I am sure there are many people sitting in pubs at the moment or sitting at home watching this [thinking] “How does that work? Does that pass the sniff test?”. Speaker invite

New documents were released on Thursday after a fresh request by unions, with an email showing Mr Stoljar was asked on August 12 by Chris Winslow, the publications manager for the NSW Bar Association, if Mr Heydon was aware the Sir Garfield Barwick Address was a Liberal Party fundraiser.

The commission also released a note from Mr Stoljar’s diary which showed that he had raised this with Mr Heydon on August 13 and Mr Heydon had shown him an email from the event organiser Greg Burton in which he said the lecture was not a fundraiser.

Unions have demanded to know why the documents were not released two weeks ago when they made their first application for information.

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Prime Minister Tony Abbott says Treasurer Joe Hockey has his ‘full confidence’

Prime Minister Tony Abbott says Treasurer Joe Hockey is doing a fine job. Photo: Dominic Lorrimer Mr Abbott said no one had raised with him the question of Mr Hockey’s future. Photo: Louie Douvis
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Abbott urged to consider dumping Hockey

Tony Abbott says Joe Hockey is “doing an excellent job” and enjoys the full confidence of the Prime Minister and cabinet, a day after two cabinet ministers told Fairfax Media that discussions were taking place about whether to move against the Treasurer if the Canning byelection goes badly for the Coalition government.

Mr Abbott has insisted that no one had raised with him the future of his under-fire Treasurer.

His comments came as respected NSW senator Arthur Sinodinos launched an attack on his former ministerial colleagues for leaking against Mr Hockey and called on Mr Abbott to sack anyone found guilty of destabilising the government.

In a sign of the gallows humour taking hold in the Coalition, despondent Liberals joked to Fairfax Media, “that was close — we almost stayed on message today” and “another week going well; didn’t even make it to 9am Monday without another self-inflicted wound”.

But Mr Abbott said talk of a switch to Social Services Minister Scott Morrison was “a matter of almost no account whatsoever, no one has even raised it with me. The Treasurer is doing an excellent job, he has my full confidence and he has the full confidence of the cabinet,” he said.

“Not a single person has raised this issue with me; it’s a matter of so little moment that not a single person has raised it with me. He has my full confidence, he has the full confidence of the cabinet, he is doing a fine job.”

Asked about the call to sack  leakers made by Senator Sinodinos, Mr Abbott said that “this government is focused every day on jobs and growth. The best thing we can do for jobs and growth right now is get the China free trade agreement through the Parliament”.

Labor Treasury spokesman Chris Bowen made an extraordinary plea for his opposite number to be kept in the job because “getting rid of a treasurer, even as bad as this one, would have a blow on consumer confidence and business confidence”.

“We have cabinet ministers backgrounding and leaking against their Treasurer. We have the spectacle of a government senator, Senator Sinodinos, releasing a statement about the internal workings of the Liberal Party and attacking his own colleagues. What is very clear is that this is a government focussed on themselves,” he said.

Meanwhile, a leak to Fairfax Media about Monday’s talking points, which are sent to ministerial offices, revealed that no ministers were offered any instructions on how to respond to questions about the future of the Treasurer.

On the Canning byelection, which cabinet ministers believe could trigger a frontbench switch to Mr Morrison if the swing is larger than 6 per cent, the talking points emphasise the local nature of the contest.

They  state that voters in Canning are being asked to choose someone to follow in late MP Don Randall’s footsteps and represent their interests in Canberra.

“It’s about choosing someone who has the experience, compassion, leadership ability and dedication to listen to local people and deliver what they need,” the note states.

“[Liberal candidate] Andrew Hastie served his country and has the experience and training to deliver for the people of Canning.”​

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