Welcome to the wonderful world of Projects RH!

We connect projects in Australia with money.

Each day for us is exciting as we see a number of wonderful investment opportunities which we can connect to people we know who want to make investments. We often work with our clients like a corporate treasurer to put their vision on paper so I can be communicated with potential investors. As we work with our clients to prepare their financial models information documents, we have the opportunity to discuss with them the implementation strategies and what resources they need. Generally, the first resource they need is people. When we discuss their market, invariably it’s not just Australia. They want and need to work with people and money which connect them particularly in our region.

Australia, since its colonial days, has been a net importer of capital. This investment into Australia by people outside Australia purchasing land or other assets has been welcomed. Basically, the asset can’t take away from Australia, the asset simply has a new owner.

Projects RH generally is looking for smart money to work with our clients to complete their projects. Most of our clients have moved beyond the venture capital stage and are near ready to take their product or company to market.

 Background

The Australian economy remains strong but what has happened is our currency has fallen against the US dollar. The AUD/USD exchange rate is about $0.68. This is the lowest point in most people’s memory. The Australian economy has been kept robust because of high price iron ore sales, plus ever-growing -even if moderately priced- gas exports which continue to increase our record numbers. This low exchange rate makes an investment into Australia more affordable for most foreigners.

Australia remains a positive net migration country with all the demands this brings for increased infrastructure and the resultant growth of cities. Whilst Australia experiences and ongoing positive net migration because of its desirability, the country is able to maintain selectivity in those who come and stay. In general terms, Australia remains considered to be a highly desirable place to live. The key criteria for migration to Australia are

1.  Skills
2.   Entrepreneurship
3.  Investment into Australia

In practice, both entrepreneur and investment base migrants need to bring money to Australia. What is happening at the moment would be considered as getting very good value their foreign currency.

Why Australia

It has been clear from the recent visit by the Australian Prime Minister to have dinner at the White House, only the second foreign leader to be invited for a State Dinner by President Trump, that Australia’s strategic military alliance with the United States remains firm. Second, but no less important, is our trade with Asia and especially China, remains robust. It is trite, but true, Australia is where it is. We live in Asia and the Asian time zone our mornings cross with North and South America and our evenings cross with Europe, Middle East and Africa. But as the economic centre of the world shifts to Asia, Australia is close to the action.

Given Australia’s physical (goods) exports and service exports we are close to the centre of demand. Just as there is strong ongoing demand for iron ore and energy there are equally strong demands for education and technical services.

 For me, however, the key is we can easily talk and travel to our clients in Asia. Recent migration has ensured we have a population who can communicate in a broad number of languages. Our volume exports of goods are increasingly going to the region in which we live. Most commodities and services exported by Australia are priced in US dollars. So, depreciation of the Australian dollar increases revenues in terms of Australian dollars. Secondly, many Australian companies have outgrown the Australian market and at this successfully established operations offshore. The profits of these offshore operations are again normally repatriated in US dollars and so with a depreciation the Australian dollars are more valuable in Australia.

Australia remains well cushioned by its floating currency plus exports of raw materials (including gold) and services to the gyrations in the international economy. Our growing population and the physical size of this island continent means that we have internal demand for infrastructure which can take up any slack in the export economy.

Recently, a further reduction in interest rates was foreshadowed by the Governor of the Reserve Bank. I, for one, think this is probably priced into the currency already.