Author: roymorgansocial

House prices going south at record rate

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 29 & 32 : 16-Jun-22

Investment bank Jarden is bearish about the outlook for Australia’s housing market. The firm says house prices could fall by 15-20 per cent from peak to trough, including a decline of around five per cent by the end of 2022. Chief economist Carlos Cacho says the prospect of higher interest rates will accelerate the downturn in the housing market, and he warns that Melbourne and Sydney are likely to experience an even large decline in dwelling prices. Cacho also anticipants a sharp decline in building approvals.

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JARDEN AND COMPANY

Low-pay hike to drive up prices

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Original article by Ewin Hannan
The Australian – Page: 1 & 4 : 16-Jun-22

Prime Minister Anthony Albanese has welcomed the 5.2 per cent increase in the minimum wage, contending that many low-paid workers carried Australia through the pandemic. The minimum wage will rise by $40 a week to $812, while workers on higher award rates will receive a wage increase of 4.6 per cent. However, Australian Chamber of Commerce & Industry CEO Andrew McKellar says businesses face additional costs of $7.9bn, and he warns that they will either have to absorb the costs or pass them on to customers. The Australian Retailers Association’s CEO Paul Zahra says economic conditions for the retail sector are already challenging, and the minimum wage increase could force some to close.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, AUSTRALIAN RETAILERS ASSOCIATION

Fortescue signs deal for green haul trucks fleet

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Original article by Nick Evans
The Australian – Page: 13 & 17 : 16-Jun-22

Fortescue Metals Group has struck a deal to buy 120 battery and hydrogen-powered haulage trucks for its iron ore mines in the Pilbara. The new clean energy fleet will replace about 45 per cent of the diesel-fuelled trucks at Fortescue’s mines. Sweden-based Liebherr will begin delivering the new vehicles from 2025. Fortescue’s current fleet of haulage trucks are estimated to account for about 26 per cent of its scope one and two emissions. Fortescue has a net-zero emissions target of 2030 for its Pilbara operations.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, LIEBHERR AG

Packer’s Crown payday set for June 24

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Original article by Lucas Baird
The Australian Financial Review – Page: 15 : 16-Jun-22

The Federal Court has approved the $8.9bn acquisition of Crown Resorts by private equity firm Blackstone. Crown’s major shareholder James Packer will receive about $3.3bn for his stake in the casinos group. The sale of Crown signals the end of a turbulent period for Packer, who was forced to abandon a deal to sell a large stake in Crown to Melco Resorts in 2019. Scrutiny of that deal subsequently result in a NSW Independent Liquor & Gaming Authority investigation into allegations that Crown had breached anti-money laundering laws, and similar probes in Victoria and Western Australia.

CORPORATES
CROWN RESORTS LIMITED – ASX CWN, THE BLACKSTONE GROUP LP, FEDERAL COURT OF AUSTRALIA, NEW SOUTH WALES. INDEPENDENT LIQUOR AND GAMING AUTHORITY

Lowe prompts double jump in rate forecasts

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Original article by Alex Gluyas
The Australian Financial Review – Page: 27 : 16-Jun-22

Financial markets have now fully priced in a 50 basis point increase in the cash rate at the Reserve Bank of Australia’s monthly board meeting in July. Financial markets also expect official interests to rise to four per cent by early 2023, compared with just 0.85 per cent at present. Investment bank Goldman Sachs expects the cash rate to rise by 50 basis points in July and the following two months; it had anticipated 25 basis point rate rises in August and September prior to recent comments by RBA governor Philip Lowe regarding the outlook for inflation and interest rates.

CORPORATES
RESERVE BANK OF AUSTRALIA, GOLDMAN SACHS AUSTRALIA GROUP HOLDINGS PTY LTD

$800m overshoot on new Rio Tinto mine

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 16-Jun-22

Rio Tinto’s Gudai-Darri iron ore mine in the Pilbara had been slated to cost $US2.6bn when it was commissioned in late 2018. However, the resources group has advised that the final cost of the project will be $US3.1bn. Factors such as skilled labour shortages in Western Australia during the pandemic contributed to the cost blowout. However, competition for labour in the Pilbara was rising prior to the pandemic, with BHP and Fortescue Metals Group also approving new iron ore projects at around the same time that Rio Tinto announced that Gudai-Darri would go ahead. One consolidation for the big three miners is that the iron ore price is still significantly higher than in 2018.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG

Inflation Expectations drop 0.2% points to 5.3% in May, but are higher in the second half of May than the first

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Original article by Roy Morgan
Market Research Update – Page: Online : 16-Jun-22

In May 2022, Australians expected inflation of 5.3% annually over the next two years, down 0.2% points from April and down 0.5% points from the high of 5.8% reached in March. However, since the Federal Election won by the ALP Inflation Expectations have increased in the last two weeks of May. Inflation Expectations in May are 1.6% points higher than a year ago and clearly above the long-term average of 4.7%. The usual gap between Inflation Expectations in Capital Cities (5.2%) and Country Areas (5.3%) had all but disappeared by May. Since January 2020 Inflation Expectations have been consistently higher in Country Areas (4.3%) than in Capital Cities (4.0%). The smaller than usual gap is illustrated by differing situations around Australia. In Victoria and SA Inflation Expectations are higher in Country Areas than in the Capital Cities. However, Inflation Expectations are higher in the Capital Cities than Country Areas in NSW, Queensland and WA. On a State-based level Inflation Expectations were again highest in the highly regional States of Tasmania (6.0%) and Queensland (5.5%). The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of 4,700 Australians aged 14+ per month over the last decade, and includes interviews with 6,021 Australians aged 14+ in May 2022.

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ROY MORGAN LIMITED

Confidence crash: Terrified consumers shut their wallets and fear for the future

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Original article by Elizabeth Knight
The Sydney Morning Herald – Page: Online : 16-Jun-22

Consumer confidence as measured by ANZ-Roy Morgan has fallen to its lowest level since April 2020; indeed, when the early stages of the COVID-19 pandemic are excluded, consumer confidence is now at a 31-year low. The ANZ Roy Morgan survey took place in the period following the Reserve Bank of Australia’s larger-than-expected 0.5 per cent increase in the cash rate, but before RBA governor Philip Lowe said that inflation is now likely to peak at seven per cent. Consumer confidence surveys are telling us households’ confidence in both financial and economic conditions has significantly deteriorate. If there is a positive to be taken from the plunging consumer sentiment index, it is that the RBA’s measures to take the heat out of inflation by raising rates is already starting to gain traction.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA

ANZ-Roy Morgan Consumer Confidence drops 6.6pts to 80.4 after RBA increases interest rates by 0.50% – largest increase for over 20 years

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Original article by Roy Morgan
Market Research Update – Page: Online : 16-Jun-22

ANZ-Roy Morgan Consumer Confidence fell 6.6pts to 80.4 in the week ended 12 June, to its lowest since early April 2020. Consumer Confidence is now 29.6pts below the same week a year ago (111.0), and 14.8pts below the 2022 weekly average of 95.2. On a State-based level Consumer Confidence was down significantly in Victoria, New South Wales, South Australia and Western Australia, but virtually unchanged in Queensland. Now 21% (down 1ppt) of Australians say their families are ‘better off’ financially than this time last year, while 41% (down 1ppt) say their families are ‘worse off’ financially. In addition, 27% (down 5ppts) of Australians expect their family to be ‘better off’ financially this time next year (the lowest figure for this indicator since early April 2020), and 38% (up 6ppts) expect to be ‘worse off’ financially (the highest figure for this indicator since March 2020). Only 8% (unchanged) of Australians now expect ‘good times’ for the Australian economy over the next 12 months (the equal lowest figure for this indicator since October 2020), while 39% (up 5ppts) expect ‘bad times’ (the highest figure for this indicator since September 2020). Meanwhile, just 23% (down 5ppt) of Australians say now is a ‘good time to buy’ major household items (the lowest figure for this indicator since early April 2020), while 49% (up 7ppts) say now is a ‘bad time to buy’ (the highest figure for this indicator since early April 2020).

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

Heat on Joyce as Coalition reshuffles

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Original article by Greg Brown, Max Maddison
The Australian – Page: 1 & 5 : 30-May-22

Peter Dutton is expected to be endorsed as the Liberal Party of Australia’s new leader at a partyroom meeting on Monday, with Sussan Ley tipped to become deputy leader. Meanwhile, the National Party will hold a post-election leadership spill on Monday, with David Littleproud and Darren Chester set to run against incumbent Barnaby Joyce. Former Nationals leader Michael McCormack has ruled himself out of contention, and he says Joyce’s actions during the election campaign contributed to the Coalition’s defeat. The Coalition is likely to make significant changes to its frontbench team in opposition.

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LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA