Rain hits Australian fires, but blazes still rage

Heavy rain fell on bushfires in eastern Australia Friday for a second straight day, offering further relief from a months-long crisis, but dozens of blazes remained out of control.

This week’s wet weather has given exhausted firefighters a major boost in battling unprecedented blazes that have been fuelled by climate change and drought.

The fires have claimed 28 lives, scorched massive tracts of pristine forests and destroyed thousands of homes.

Following months of hot and dry weather that have fuelled the fires, Friday saw the heaviest rainfalls in nearly a decade in some areas close to hotspots.

“Rain has fallen across most fire grounds over the last 24 hours, which is great news,” said the Rural Fire Service of New South Wales, the eastern state where many of the worst blazes have raged.

“Our fingers are crossed that this continues over the coming days.”

However 30 fires were still out of control in New South Wales on Friday, unchanged from the previous day, the fire service reported.

Dozens of other fires were also still burning in the southern state of Victoria.

And the rain has completely missed Kangaroo Island, the nation’s third biggest off the southern coast of the mainland that is famed for its pristine wilderness.

Fires have devastated the national park on the island, wiping out much of its koala population and threatening to completely eradicate bird and other endemic marsupial species.

Still, the prospect of more wet weather across eastern and southern Australia over the coming days offered further hope.

Heavy rain is expected  to continue throughout the weekend in New South Wales, expanding into other fire zones further south in the state and in Victoria.

Animal rescues

Roughly a billion animals are estimated to have died in the fires nationwide.

With huge tracts of their habitats destroyed, environmental groups have warned the blazes could drive many species to extinction.

Much attention has focused on Australia’s tree-dwelling koalas, with images of the cuddly-looking animals being rescued from wildfires making world headlines.

But on Friday morning, some koalas and other native animals at the Australia Reptile Park on the east coast of New South Wales had to be rescued from floodwaters.

“This is incredible, just last week, we were having daily meetings to discuss the imminent threat of bushfires,” park director Tim Faulkner said.

“Today, we’ve had the whole team out there, drenched, acting fast to secure the safety of our animals and defend the park from the onslaught of water.

“We haven’t seen flooding like this at the park for over 15 years.”

The heavy rain is being seen as a double-edged sword.

The water could also make it harder for firefighting trucks to venture deep into forests on muddy tracks, authorities have warned.

Flash floods are another concern, with scorched mountains unable to hold the water and potentially sending torrents of muddy ash into waterways.

Such torrents have already led to huge numbers of fish dying in rivers that were poisoned by the muddy ash, local media have reported.

Climate alarm

The fires have burnt roughly 10 million hectares (25 million acres) of land — an area larger than South Korea or Portugal.

Their massive destruction is an example of the catastrophic impacts of climate change that the world will increasingly face, scientists have warned.

The past decade was the hottest on record globally, the United Nations reported this week.

Australia experienced its driest and hottest year on record in 2019, with its highest average maximum temperature of 41.9 degrees Celsius (107.4 degrees Fahrenheit) recorded in mid-December.

Famed British naturalist and broadcaster David Attenborough warned this week the world was facing its “moment of crisis” on climate change and could not delay action any longer.

“We have to realise that this is not playing games, this is not just having nice little debates and arguments, then coming away with a compromise,” he said in an interview with the BBC.

– AFP

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AHTC to remove Sylvia Lim and Low Thia Khiang from financial matters so to direct its energies towards fulfilling its core functions

Aljunied-Hougang Town Council has removed Ms Sylvia Lim and Mr Low Thia Khiang — both Members of Parliament for Aljunied GRC — from financial oversight of the town council, with effect from Thursday (16 January) after receiving a rectification order from the the Minister of National Development, Lawrence Wong on 3 January 2020.

In a statement published on the town council’s website, AHTC voiced its surprise that the Minister Wong is invoking Section 43D(2) of the Town Councils Act (TCA) to compel the Town Council to comply with the Ministry’s orders.

Under the section, the Minister, may by order given in writing to the Town Council, require the directed

Town Council —

  • to take specified remedial action to address the deficiencies within a specified period and to report to the Minister, at the end of the specified period, on the action taken to give effect to the requirement; or
  •  to take specified action to correct the irregularity or to guard against the recurrence of irregularities (or both) at the end of the specified period.

If a Town Council fails to comply with a rectification order by the compliance date, the Town Council shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and in the case of a continuing offence, to a further fine not exceeding $50 for every day or part of a day during which the offence continues after conviction.

The town council notes that this is a shift by the government from its earlier position in Parliament.

AHTC notes that the Second Minister for Finance lndranee Rajah had — during the debate on the Parliamentary Motion filed by the Deputy Prime Minister and Minister for Finance, Heng Swee Keat on 5 November 2019 — affirmed that it was the Town Council who had jurisdiction to decide on whether recusal of Ms Lim and Mr Low from financial oversight of Town Council matters was required and that Parliament was not in a position to compel the Town Council to take any action.

The motion filed by DPM Heng called for Ms Lim and Mr Low to recuse themselves from dealing with or having oversight over financial matters of the Aljunied-Hougang Town Council (AHTC) until the court case has ended.

Mr Heng referred to the High Court judgement which found Ms Lim, Mr Low, and WP chief Pritam Singh liable for damages suffered by AHTC, which it has been said made improper payments under their watch amounting to millions. The motion was eventually passed with the majority of People’s Action Party MPs.

AHTC also pointed out that Second Minister for National Development Desmond Lee directly addressed a query raised by a Nominated MP in the same debate, as to why the Government was asking Parliament to pass a resolution with no legal force, when the Minister for National Development could conceivably use his powers under Section 43D of the TCA.

In response, Minister Lee told the House that he was familiar with the provision, and noted that Section 43D was passed years after the actions taken by MP Lim and MP Low in 2011. He further highlighted that Section 43D gave powers to the Minister to act after a report or compliance review had been undertaken under the amended Act or after an investigation.

AHTC voiced agreement with the Minister’s opinion that Section 43D is not applicable to the facts due to concerns about retroactivity and the pre-conditions not being met.

“We are thus doubtful as to the propriety of the Rectification Order issued under Section 430(2).” states AHTC.

But as the letter from the ministry warned about the penalty of non-compliance, AHTC noted that it will comply despite its reservations to the order so that it can direct its energies towards fulfilling its core functions of managing and maintaining the HDB estates in Aljunied-Hougang Town for the residents.

According to AHTC,

  • With effect from 16 January 2020, Ms Lim has been removed from being an authorised officer to unilaterally incur or approve expenditure on behalf of the Town Council,  and no longer authorised to unilaterally accept or waive any quotation or tender for any stores, services or works on behalf of the Town Council.
  • With effect from 16 January 2020, Ms Lim’s and Mr Low’s votes at committee meetings involving procurement and expenditure will not be taken into account;
  • The Town Council will pass a resolution at its next meeting in February 2020 to remove Ms Lim and Mr Low as cheque signatories. In the meantime, the Town Council will not present cheques to them for signature.

On 4 December 2019, the Ministry of National Development (MND) wrote a letter to AHTC to request for information on AHTC’s reasons for not requiring Ms Lim and Mr Low’s recusal on AHTC’s financial matters, and whether AHTC intends to implement other interim measures or safeguards if Ms Lim and Mr Low were to continue to be involved with AHTC’s financial affairs.

In AHTC’s response to MND dated 13 December 2019, AHTC explained the reasons for not requiring the recusal of Ms Lim and Mr Low from all matters relating to, and oversight over, financial matters at AHTC.

Amongst other facts, the Town Council considered whether Ms Lim and Mr Low had benefitted personally from the award of contracts without tender.

The Town Council discussed and concluded that this was not the case. The Town Council further noted that the judgment did not pass any comment or establish a view that Ms Lim and Mr Low were incapable of handling financial matters.

Over the years, both Ms Lim and Mr Low did not show that they were incapable of handling financial matters at AHTC, a fact that town councillors said that they could vouch for; and AHTC found no compelling reasons to insist on the recusal of Ms Lim and Mr Low from financial matters at AHTC solely on the basis of political decisions taken by Mr Low and Ms Lim in the immediate aftermath of the 2011 general elections.

With the various internal control procedures in place, AHTC is of the view that there are sufficient checks and balances in place.

 

 

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Income Investors: 2 Stocks With a Dividend Yield of 10%

Woman calculating figures next to a laptop

Dividend-paying stocks remain an attractive investment, especially in markets that are trading at record highs. Dividend stocks provide a stable stream of income, and companies seldom cut dividend payments. Here we look at two Canadian-based companies that have a dividend yield of 10%.

Boston Pizza Royalties Income Fund

Shares of Boston Pizza Royalties Income Fund (TSX:BPF.UN) have grossly underperformed the broader markets over the last year. The stock has fallen 17% in the last 12 months compared to the S&P 500 gain of 25% in this period. The company is valued at $310.2 million. Boston Pizza stock is trading at a forward price-to-earnings ratio of 11, which is a reasonable multiple considering its dividend yield of 10%.

Company sales have been range bound in the recent past. Boston Pizza reported revenue of $45.7 million in 2016 and $45.6 million in 2018. Analysts expect sales to reach $45.2 million in 2020, $45 million in 2020, and $45 million in 2021.

We can see the stock has declined, as the company is struggling to grow sales. Boston Pizza Royalties Income Fund is an open-ended mutual fund trust. The fund earns revenue based on the Boston Pizza franchise system that has close to 400 outlets.

Boston Pizza has five corporate-owned outlets and 390 franchised restaurants. As the revenue stream is tied to franchise sales, investors are not exposed to the underlying business profitability or expenses.

After accounting for reinvestment distributions, Boston Pizza Royalties Income Fund has returned 12.2% on an average since 2002. Due to the company’s business model, it is able to payout 100% of distributable cash in dividends.

The fund operates in 10 provinces and two territories in Canada. It is accessible to almost 100% of the Canadian population, and gross sales touched $1.1 billion in 2018. Boston Pizza has added 48 restaurants since 2012 and is well positioned in the mid-scale dining category.

American Hotel Income Properties REIT

Shares of American Hotel Income Properties REIT (TSX:HOT.UN) have gained 0.3% in the last 12 months. Though the REIT has underperformed the S&P 500, it has a solid dividend yield of 11.6%.

This REIT invests in hotel real estate properties primarily in the United States. The REIT has two business segments: Rail Hotels and Branded Hotels. The Rail Hotels portfolio consists of 50 properties with a total of 3,720 rooms. These properties operate under the Oak Tree Inn brand and are aimed at fulfilling the needs of railroad operators.

At the end of Q3, American Hotels had a portfolio of 79 hotels and 8,887 guestrooms across 22 states and 51 cities. In the September quarter, the hotel occupancy rate stood at 79%, while the average daily guestroom rate was $116.5.

American Hotel Income Properties reported sales of $69.3 million with a net income of $23.5 million. The REIT’s payout ratio stands at 92%. AHIP focuses on generating sustainable cash flows from proven hotel properties.

This will help deliver long-term value to unitholders through monthly dividend distributions and stock appreciation.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

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Leptitox Review

Obesity has become disturbingly widespread according to World Health Organization, affecting people from all walks of life. People are trying to lose weight using various ways and methods but are sadly becoming disappointed because of very minimal results if not none. If you are also struggling losing weight despite trying every way you know how,…

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Forget 2% Interest: Beat the Market With This Stock!

Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.

Coming into a new year and a new decade, it is always a good time to re-evaluate your financial position and strategy. If you have been wise over the last decade, you may have established a solid monthly savings plan and maybe even saved up enough to have built a three- to six-month emergency reserve fund. Congratulations! If you have been really prudent over the past decade, you might even have cash left over just sitting in a savings account. Extra congratulations!

Savings accounts aren’t as good as they seem

If that cash is sitting in a major bank’s saving account, you might be lucky to have a special offer and earn between 0.85% and 1.25% interest per year. If you were really prudent and did your research, you may have found a high interest savings account) with an online bank or financial services provider that pays you between 2% and 2.50% interest per year.

This might seem like a decent return, considering you have very little downside risk holding cash in a savings account. However, taken holistically, it is not. As of October 2019, the Canadian Consumer Price Index (which measures inflation in Canada) was sitting at 1.9%. This means that the cost of goods and services that you require to live is presently increasing by 1.9%. Subtract your maximum 2.50% interest earned, and you are really only ending up with future buying power of 0.6%.

If you have cash sitting around and have a long-term investment horizon (say, the next 10 years), then why not get invested in one of the best operating companies in Canada?

Invest in a market leader like BAM

I would like to introduce you to Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM), also referred to as just BAM. While it resides within the financial services sector, BAM is really an alternative asset manager managing/operating various public and private investment vehicles that focus on real estate, infrastructure, renewables, private equity, and now credit with the recent acquisition of Oaktree Capital.

BAM has seen incredible performance over the previous decade, seeing its shares rise over 480% beating both the S&P 500 and the NASDAQ. While past performance is no indicator of future success, it indicates one thing: BAM knows how to manage capital effectively. BAM is still lead by CEO Bruce Flatt and a top team of contrarian investors/managers. They find the best assets (utilities, pipelines, rail roads, real estate, businesses) in the worst markets or worst situations across the world, often buying them at liquidation prices. Through restructuring, investing capital, and prudent management, they often turn these businesses into cash flow machines, which they either hold onto for the long term or sell at significantly higher multiples.

While the stock has always looked expensive, it is still not too late to buy. There are a number of catalysts that should continue to drive this company forward. First, with interest rates expected to be lower for longer, BAM believes there will be a huge shift of institutional capital from bonds toward alternative assets that can meet their yield target requirements. This presents a huge opportunity; we are talking trillions of dollars moving to alternatives, and BAM is positioned to manage a good share of that capital.

Second, the shifting and growing demand for alternative cash flow-producing assets should act to significantly increase the value of their present portfolio of assets. The company noted during its investor day that every 100-point reduction in the cap rate of its assets should result in $20 of value per BAM share.

Finally, BAM should succeed in an economic boom or recession. With ample cash on the balance sheet, a recession means the company can begin to purchase more high-quality assets at distressed prices. Also, with the new addition of Oaktree, which specializes in distressed debt, BAM stands to do very well if the economy takes a downturn a balance sheets become stretched.

Overall, BAM is an excellent quality business, with high-quality management and high-quality, long-term assets. BAM should be a core holding for every Canadian’s investment portfolio. Why waste your time earning 2% interest in a savings account when you can earn a growing 1.06% dividend yield and a decade of growth opportunities to come?

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The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. Fool contributor Robin Brown owns shares in Brookfield Asset Management.

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