First challenge is the federal budget due in two weeks - will the Abbott Government rescind its promise to leave the fbt settings alone?
Next challenge is the Productivity Commission's report on support for the auto industry. Its been handed to Government, but recommendations are yet to be made public. Would seem likely to have addressed the FBT issue, and recommend some sort of change.
This will then likely feed into the scope of the tax white paper process the Abbott Government will get underway later this year, which will seek recommendations for implementation post the 2016 federal election.
And finally, against this backdrop, full year operational results for MMS reported in August. Given a strong return to business as usual so far, will performance continue to hold up?
On balance, I think most likely outcome is a winding back of the fbt provisions over the longer term (giving another 2 - 4 years of operation under current regulatory settings), with MMS continuing to perform well in the interim.
If this proves correct, there's at least a dollar or two's value there at current share price, with a spike to come post-budget and some more gains once the market gets some certainty about the path ahead.
We'll see...
MMS Price at posting:
$9.81 Sentiment: Hold Disclosure: Held
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