Author: roymorgansocial

Buckle up for a day of unusual volatility

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Original article by David Rogers, Andrew White, Paul Garvey
The Australian – Page: 19 & 28 : 9-Nov-16

The US presidential election is set to dominate financial market trading on 9 November 2016. Voting trends will have emerged by the time the Australian sharemarket opens, while market volatility can be expected as exit polls are released over the course of the local trading day. The Chicago Board Options Exchange’s Volatility Index has returned to its long-term average of 19, which suggests that financial markets do not anticipate that Donald Trump will win.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, STANDARD AND POOR’S 500 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, VOTECASTR, REPUBLICAN PARTY (UNITED STATES), DEMOCRATIC PARTY (UNITED STATES), RESERVE BANK OF AUSTRALIA, MONASH UNIVERSITY, ECONOMICS SOCIETY OF AUSTRALIA, UNITED STATES. FEDERAL BUREAU OF INVESTIGATION, AUSDRILL LIMITED – ASX ASL

Roy Morgan CEO Michele Levine’s comment on the rise in Roy Morgan October Business Confidence

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Original article by Michele Levine, Roy Morgan Research
Market Research Update – Page: Online : 8-Nov-16

Business Confidence increased for the second straight month, up by 1.3pts (+1.1%) in October to 116.2 – the highest Business Confidence has been since the Federal Election in July. The most confident industries in October were the primary industries of Agriculture, forestry and fishing, Mining – which has significantly recovered from lows earlier in 2016, Education and training, Accommodation and Rental, hiring and real estate services – all significantly above the national average. Industries lagging in confidence in October include Transport, postal and warehousing, Arts and recreational services, Personal, repair and other services and the utilities of Electricity, gas, water and waste. It is no surprise to see lower business confidence in the Electricity industry given the problems with the South Australian power system and the well-anticipated recent decision to close Victoria’s Hazelwood power stations (responsible for up to 25% of Victorian baseload energy demand).

CORPORATES
ROY MORGAN RESEARCH LIMITED

Natural disasters a threat to billions of dollars of GDP

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Original article by Sally Patten
The Australian Financial Review – Page: 27 : 8-Nov-16

The Federal Government has been urged to spend more money on mitigating the risks associated with natural disasters. SGS Economics & Planning and Insurance Australia Group estimate that 11 per cent of national GDP is at risk of being affected by bushfires, while cyclones pose a threat to 20 per cent of GDP. Disaster relief dominates in government spending on natural disasters, while only three per cent is spent on mitigation.

CORPORATES
INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SGS ECONOMICS AND PLANNING PTY LTD, AUSTRALIA. PRODUCTIVITY COMMISSION

Business Confidence up slightly in October to 116.2 (up 1.1%) on the back of renewed strength in primary industries Agriculture & Mining

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 8-Nov-16

Roy Morgan Research’s Business Confidence rose 1.1% to 116.2 in October 2016. The small rise in Business Confidence occurred even though the Australian All Ordinaries fell during October – the All Ordinaries ended October at 5,402.40 (down 122.8pts from September 30). However, this fall was concentrated in the last week of the month (the All Ordinaries lost 120.9pts between October 25-31) and has fallen further in early November – now at 5,330.9 (November 7). This month’s small rise in Business Confidence means Business Confidence is now just below the 6yr average (116.6) and slightly below the ANZ-Roy Morgan Consumer Confidence October rating of 118.5.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Westpac returns hit by need to build capital

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Original article by James Eyers
The Australian Financial Review – Page: 11 & 15 : 8-Nov-16

Westpac has posted a 2015-16 cash profit of $A7.8bn. Its return on equity fell by 1.85 per cent to 14 per cent in the year to 30 September 2016, and its ROE target has been scaled back from 15 per cent to 13-14 per cent due to factors such as new capital requirements for the banking sector. PwC estimates that the combined ROE of the four major banks fell by 127 basis points to 13.75 per cent in 2015-16. Meanwhile, Westpac will seek to reduce its cost-to-income ratio from 42 per cent at present to less than 40 per cent

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, CITIGROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, KPMG AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Senate committee backs media bill

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Original article by Jake Mitchell
The Australian – Page: 4 : 8-Nov-16

The Senate environment and communications legislation committee has released its report on proposed changes to cross-media ownership laws. It has recommended that the upper house vote in favour of abolishing the "reach rule" and the "two-out-of-three" rule, although Australian Labor Party members of the committee opposed the latter reform. Labor believes that scrapping the "two-out-of-three" rule would particularly benefit News Corp Australia. However, the party supports another reduction in TV broadcasting licence fees.

CORPORATES
AUSTRALIA. SENATE ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMITTEE, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF COMMUNICATIONS AND THE ARTS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED – ASX FXJ, SEVEN WEST MEDIA LIMITED – ASX SWM, PRIME MEDIA GROUP LIMITED – ASX PRT, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS

‘Thoughtful’ King answers BCA call

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Original article by Patrick Durkin
The Australian Financial Review – Page: 5 : 8-Nov-16

Former Origin Energy CEO Grant King will succeed Catherine Livingstone as president of the Business Council of Australia. Origin’s ex-finance director Karen Moses has praised King’s appointment and says he is well-suited to his new role as head of the lobby group. King recently stepped down as Origin CEO after more than two decades at the company.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, ORIGIN ENERGY LIMITED – ASX ORG, BORAL LIMITED – ASX BLD, TELSTRA CORPORATION LIMITED – ASX TLS, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESFARMERS LIMITED – ASX WES, CHARTER HALL GROUP – ASX CHC, SANTOS LIMITED – ASX STO, AGL ENERGY LIMITED – ASX AGL, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA PACIFIC LNG LIMITED, AUSTRALIAN LABOR PARTY

Labor push for tougher cuts on superannuation

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Original article by Phillip Coorey
The Australian Financial Review – Page: 3 : 8-Nov-16

The Opposition will seek more changes to the Federal Government’s superannuation tax reforms in return for its support in parliament. Amongst other things, the Australian Labor Party wants non-concessional contributions to be capped at $A75,000 per year, rather than $A100,000 as proposed by the Government. The super legislation will be introduced into parliament during the second last sitting week for 2016, and the Government hopes the reforms will be passed by both houses before parliament rises for the year.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Clinton victory set to unleash a ‘wave of cash’ into global markets

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Original article by David Rogers, Glenda Korporaal, Michael Bennet
The Australian – Page: 19 & 32 : 8-Nov-16

The Australian sharemarket rallied on 7 November 2016, after a new FBI probe cleared US presidential candidate Hillary Clinton over the use of a private email server. AMP Capital’s Nader Naeimi says investors are likely to reallocate cash holdings to higher-risk assets if Clinton wins the election. Meanwhile, Paul Donovan of UBS has warned that world trade and global capital flows could be disrupted if Donald Trump becomes president.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, AMP CAPITAL INVESTORS LIMITED, UBS AG, WESTPAC BANKING CORPORATION – ASX WBC, NIKKEI 225 INDEX, NZSX-50 INDEX, UNITED STATES. FEDERAL BUREAU OF INVESTIGATION, UNITED STATES. FEDERAL RESERVE BOARD

SA power threat to copper project: OZ

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Original article by Peter Ker
The Australian Financial Review – Page: 16 : 8-Nov-16

OZ Minerals’ pre-feasibility study for its Carrapateena project in South Australia shows that annual copper and gold output would be 15 per cent and 19 per cent higher respectively than previous guidance had indicated. Production is expected to begin in the March 2019 quarter, assuming OZ Mineral’s board gives final approval to the project in the first half of 2017. However, OZ Minerals has warned that SA’s energy supply is a major risk to the project.

CORPORATES
OZ MINERALS LIMITED – ASX OZL, ELECTRANET SA, RBC CAPITAL MARKETS