Author: roymorgansocial

RBA’s Lowe faces grilling over cheap money

roymorgansocial Leave a comment

Original article by John Kehoe
The Australian Financial Review – Page: 6 : 8-Aug-19

Reserve Bank of Australia governor Philip Lowe will appear before a parliamentary committee on 9 August. His testimony is likely to attract increased scrutiny after the central bank’s New Zealand counterpart reduced official interest rates by 50 basis points. The House of Representatives’ economics committee is chaired by Liberal MP Tim Wilson. He says the RBA’s dual rate cuts in June and July and how it expects to eventually begin tightening monetary policy when household debt is rising are among the issues that will come under scrutiny.

CORPORATES
RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, LIBERAL PARTY OF AUSTRALIA

High-rise units are ‘real estate’s equivalent of the bubonic plague’, says researcher

roymorgansocial Leave a comment

Original article by Euan Black
The New Daily – Page: Online : 8-Aug-19

A report from Propertyology notes that growth in Australia’s median house price exceeded that of apartments by 20 per cent over the five years to April, and the firm expects this trend to continue for some time. Propertyology director Simon Pressley says factors such as an apartment glut and concerns about building defects means that people who have bought apartments in medium-to-high-density towers over the last two decades should sell them as soon as possible. He warns that some of these buildings are of such poor quality that demolition may be the only option to restore public confidence in high-rise towers.

CORPORATES
PROPERTYOLOGY, SQM RESEARCH PTY LTD, CORELOGIC AUSTRALIA PTY LTD

Underrated suburbs set for million-dollar club

roymorgansocial Leave a comment

Original article by Nila Sweeney
The Australian Financial Review – Page: 30 : 8-Aug-19

Data from Select Residential Property suggests that the median house price in 12 suburbs across Australia will rise above $1m over the next two years. They include Coal Point, Terrigal and Mount Pleasant in New South Wales and St Helena and Eltham North in Victoria. The price growth forecasts are based on a range of metrics, including auction clearance rates, vacancy rates, and the number of properties on the market.

CORPORATES
SELECT RESIDENTIAL PROPERTY, CORELOGIC AUSTRALIA PTY LTD

Kiwi cut raises the prospect of negative interest rates

roymorgansocial Leave a comment

Original article by Adam Creighton
The Australian – Page: 4 : 8-Aug-19

The Australian dollar reached a 10-year low of $US0.6680 in local trading on 7 August, after the Reserve Bank of New Zealand reduced official interest rates by 50 basis points to 1 per cent. Central bank governor Adrian Orr has not ruled out the prospect of negative interest rates or measures such as quantitative easing. The RBNZ’s move is likely to strengthen the case for further monetary policy easing in Australia before the end of 2019.

CORPORATES
RESERVE BANK OF NEW ZEALAND, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, AUSTRALIA. DEPT OF THE TREASURY

Cheap money squeezes CBA

roymorgansocial Leave a comment

Original article by James Eyers, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 18 : 8-Aug-19

The Commonwealth Bank of Australia has posted a 2018-19 cash profit of $8.49bn, which is 4.7 per cent lower than previously; revenue was two per cent lower at $24.4bn. CEO Matt Comyn has warned that the bank’s net interest margin will fall by four basis points in 2019-20 due to the consecutive official interest rate cuts in June and July. He adds that there will be limited scope to pass on further rate cuts to customers, as many of its deposit rates are already close to zero. CBA’s cost-to-income ratio is currently 46.2 per cent, and Comyn says the aim is to reduce it to below 40 per cent over time.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, CITIGROUP PTY LTD, PM CAPITAL LIMITED, RESERVE BANK OF NEW ZEALAND

Costello’s warning to retirees

roymorgansocial Leave a comment

Original article by Greg Brown, Adam Creighton
The Australian – Page: 1 & 6 : 7-Aug-19

Future Fund chairman Peter Costello has urged the US and China to "sensibly negotiate" a resolution to their ongoing trade dispute in the wake of a global financial rout. The Australian sharemarket has shed $86bn in the last two trading sessions, following China’s move to devalue its currency; Costello has warned that Australians’ savings and the federal Budget will be impacted if the trade dispute is not resolved. However, he says it is important to not "overhype" the recent market slump.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, CITIGROUP INCORPORATED, UNITED STATES. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG

Unfair dismissal: retreat over pay

roymorgansocial Leave a comment

Original article by Ewin Hannan
The Australian – Page: 2 : 7-Aug-19

Small Business and Family Enterprise Ombudsman Kate Carnell says the Small Business Fair Dismissal Code is "ambiguous and open to interpretation". She adds that small businesses would be in a better position to comply with the code if ambiguous language were removed. Carnell has also argued the case for the Fair Work Commission to establish a small business division, although she now favours reviewing the maximum compensation for unfair dismissal after a revised code has been operating for at least 12 months.

CORPORATES
AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, AUSTRALIA. FAIR WORK OMBUDSMAN, AUSTRALIA. ATTORNEY-GENERAL’S DEPT, AUSTRALIA. DEPT OF EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS

Fortescue finds port space for magnetite but impasse on royalties

roymorgansocial Leave a comment

Original article by Brad Thompson
The Australian Financial Review – Page: 18 : 7-Aug-19

The Iron Bridge magnetite project will significantly increase Fortescue Metals Group’s shipments from Port Hedland, with production slated to commence in 2022. The pure-play iron ore miner has indicated that its port infrastructure will be able to cope with the increased export volumes. Meanwhile, CEO Elizabeth Gaines says the Western Australian government is resisting Fortescue’s efforts to have royalty relief extended to the Iron Bridge project. The royalty discount applies to CITIC’s Sino Iron magnetite project and Ansteel’s Karara project.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CITIC LIMITED, ANSHAN IRON AND STEEL COMPANY, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET

$47bn lost as currency war erupts

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 17 & 25 : 7-Aug-19

The Australian sharemarket has shed 5.4 per cent since reaching a record high in late July, as fears of a currency war add to tensions over the ongoing US-China trade war. However, Richard Coppleson of Bell Potter has downplayed concerns about the outlook for equities, saying a bear market is unlikely. He says there is not yet an all-out trade war, while interest rates are set to remain low. Shane Oliver of AMP Capital also does not expect a bear market, although he says shares are likely to fall further in the short-term.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BELL POTTER SECURITIES LIMITED, AMP CAPITAL INVESTORS LIMITED, CITIGROUP PTY LTD, PEOPLE’S BANK OF CHINA, STANDARD AND POOR’S 500 INDEX, SHANGHAI COMPOSITE INDEX, HANG SENG INDEX, NIKKEI 225 INDEX, TAIEX INDEX, FTSE STRAITS TIMES INDEX, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, UNITED STATES. DEPT OF COMMERCE, UNITED STATES. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

RBA lowers GDP, inflation forecasts

roymorgansocial Leave a comment

Original article by John Kehoe
The Australian Financial Review – Page: 6 : 7-Aug-19

The Reserve Bank of Australia has downgraded its GDP growth forecast for 2019 from 2.75 per cent to 2.5 per cent, after leaving the cash rate unchanged on 6 August. Central bank governor Philip Lowe again indicated that official interest rates will remain low for some time, and that any change in monetary policy will depend on the outlook for the unemployment rate and inflation. The inflation rate was 1.6 per cent in the year to June, and the RBA now does not expect it to reach the bottom end of its 2-3 per cent target range until 2021.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP CAPITAL INVESTORS LIMITED