Author: roymorgansocial

Bank shareholders face $7bn hit

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Original article by Michael Roddan
The Australian – Page: 13 & 16 : 9-Apr-20

Shares in Australia’s major banks retreated on 8 April, after the Australian Prudential Regulation Authority asked them to consider delaying or reducing their dividend payments due to the coronavirus crisis. The Bank of Queensland has already advised that it will defer its interim dividend, while investors in Westpac, National Australia Bank and the ANZ Bank were slated to receive a combined $7bn worth of dividends in May. Commonwealth Bank shareholders recently received their interim dividends.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK OF QUEENSLAND LIMITED – ASX BOQ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Rio Tinto to maintain payout

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Original article by Nick Evans
The Australian – Page: 13 & 16 : 9-Apr-20

Rio Tinto chairman Simon Thompson say its dividend policy will have to be reviewed before the release of its half-year results in July. However, shareholders will still receive the final dividend of $US2.31 per share for calendar 2019, as announced in February. Thompson has cited factors such as Rio Tinto’s strong balance sheet and the fact that its iron ore order book is full. Many listed companies have opted to review their dividend policies or defer interim dividends due to the coronavirus pandemic.

CORPORATES
RIO TINTO LIMITED – ASX RIO

Extra 1.4 million Australians out of work in wake of COVID-19 pandemic – 3.92 million (27.4% of workforce) now unemployed or under-employed

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Original article by Roy Morgan
Market Research Update – Page: Online : 9-Apr-20

The latest Roy Morgan unemployment estimate for the second half of March jumped a staggering 1.4 million to 2.4 million (16.8%) and under-employment increased 374,000 to 1.52 million (10.6%). This means a record high 3.92 million (27.4%) of Australians were either unemployed or under-employed and looking for more work in the second half of March – far more Australians looking for work than was the case during the last recession in 1990/91. Roy Morgan CEO Michele Levine said: "The results from today’s Roy Morgan late March employment and unemployment estimates show the value of timely data closely tracking the employment statuses of Australian workers. In this uncertain times it is vital for Governments and policy-makers dealing with the COVID-19 ‘fallout’ to have the most up-to-date data on the state of the Labour market to make the correct decisions".

CORPORATES
ROY MORGAN LIMITED

Iron ore dividends still on track

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Original article by Nick Evans
The Australian – Page: 18 : 8-Apr-20

Macquarie Group is bullish about the outlook for iron ore producers BHP, Rio Tinto and Fortescue Metals Group, arguing that continued strong cashflows should enable them to maintain dividend yields. Macquarie notes that BHP’s iron ore operations will have helped to offset the impact of the sharp fall in the crude oil price on its petroleum division. Glynn Lawcock of UBS also expects BHP and Rio Tinto to maintain their dividend payments, although he says gold and base metal miners may reduce their dividends.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD

PM plans staggered virus exit

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 8-Apr-20

Theoretical modelling suggests that just 12 per cent of Australians would be infected by the coronavirus and less than one per cent would require hospitalisation if people comply with lockdown measures. However, failure to do so could see 89 per cent of the population become infected, while only 15 per cent of people who need an intensive care bed would get one. Prime Minister Scott Morrison has warned that the economy cannot afford to be shut down for too long, and he has flagged a staged winding back of lockdown restrictions. He also says Australia will need to reduce its dependence on imports in the post-virus world, particularly critical supplies such as medical equipment.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Prices face 30pc fall if lockdown lingers

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Original article by Mackenzie Scott
The Australian – Page: 2 : 8-Apr-20

SQM Research MD Louis Christopher says confidence in the housing market will recover if coronavirus-induced restrictions are eased by the end of May. He warns that residential property prices could fall by up to 30 per cent in Sydney and Melbourne if there is a second wave of coronavirus infections during winter and the restrictions have to remain in place. Christopher adds that the closure of the nation’s borders will reduce underlying demand for housing; he expects this to be one of the last restrictions to be lifted.

CORPORATES
SQM RESEARCH PTY LTD

Prepare to be hit but we’ll ease blow: RBA

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Original article by Adam Creighton
The Australian – Page: 4 : 8-Apr-20

Reserve Bank of Australia governor Philip Lowe has indicated that the cash rate will remain at 0.25 per cent until inflation returns to its target range of 2-3 per cent and the unemployment rate falls to around 4.5 per cent. The central bank will also maintain its bond-buying program until these targets are achieved. Lowe has warned that the domestic economy faces a "very large economic contraction" due to the coronavirus, while he says the unemployment rate will rise to its highest level in many years. The RBA left the cash rate on hold at its April board meeting.

CORPORATES
RESERVE BANK OF AUSTRALIA

Rio Tinto says China shows growing iron ore appetite

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Original article by Peter Ker
The Australian Financial Review – Page: 15 & 22 : 8-Apr-20

The head of Rio Tinto’s iron ore division, Chris Salisbury, notes that Chinese demand for the steel input remained strong while the nation was contending with the coronavirus earlier in 2020. He adds that China’s steel stockpiles have started to fall and Rio Tinto’s order books are full. Chinese steel mills buy more than 70 per cent of Rio Tinto’s iron ore, and China accounted for 51.3 per cent of the resources group’s revenue in 2019. Australia’s iron ore exports are forecast to top $101bn in 2019-20.

CORPORATES
RIO TINTO LIMITED – ASX RIO

JobKeeper flexibilities give employers power to alter hours, ask staff to take leave

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Original article by Samantha Maiden
The New Daily – Page: Online : 8-Apr-20

Labor will support the federal government’s JobKeeper wage subsidy package when parliament reconvenes for a one-off sitting on 8 April. Attorney-General Christian Porter says the temporary changes to the Fair Work Act will allow employers to reduce an employee’s agreed hours of work for six months due to the pandemic. However, he stresses that any such reduction in agreed hours must be reasonable. The changes will also allow employers to request that staff use some of their annual leave entitlements during the pandemic.

CORPORATES
AUSTRALIA. DEPT OF EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS, AUSTRALIAN LABOR PARTY, ACTU

Earnings haven’t been revised low enough

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Original article by William McInnes
The Australian Financial Review – Page: 31 : 8-Apr-20

Earnings per share forecasts for S&P/ASX 200 companies have been reduced by seven per cent since February, due to the impact of the coronavirus pandemic. Macquarie argues that this downgrade is too small, given that Australia’s GDP growth is expected to contract in 2020; the broker adds that the financial market appears to have priced in a much higher decline. Macquarie notes that forecasts are difficult at present as many listed companies have withdrawn their earnings guidance in response to the pandemic.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG