Author: roymorgansocial

Foxtel’s critical year: News Corp has Plan B

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Original article by Max Mason
The Australian Financial Review – Page: 27 : 15-Oct-18

News Corporation has declined to comment on suggestions that it could divest Foxtel if the pay-TV company’s financial performance does not improve. Kane Hannan of Goldman Sachs recently met with News Corp executives in the US, and he has told clients that he was left with the firm impression that the media giant may be open to selling Foxtel. The upcoming launch of Foxtel’s sports-focused streaming video service is likely to be crucial to any turnaround. Hannan expects Foxtel’s average revenue per user to fall by six per cent a year to $57 by 2022-23, compared with around $77 in 2017-18.

CORPORATES
NEWS CORPORATION – ASX NWS, NEWS CORP AUSTRALIA PTY LTD, FOXTEL MANAGEMENT PTY LTD, GOLDMAN SACHS AUSTRALIA PTY LTD, FOX SPORTS AUSTRALIA PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, 21ST CENTURY FOX INCORPORATED, WALT DISNEY COMPANY, AMPLIFY, MYSPACE

Budget could balance this financial year

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Original article by Phillip Coorey
The Australian Financial Review – Page: 6 : 15-Oct-18

Finance Minister Mathias Cormann has indicated that the Budget bottom line was $6.6bn ahead of expectations in the first two months of 2018-19. The federal government has forecast a Budget deficit of $14.5bn for 2018-19, and the deficit was $8.9bn for the 12 months to 31 August. The government expects to achieve a surplus in 2019-20, but economist Chris Richardson says it could potentially do so in 2018-19. However, he says this will depend on the health of the economy and spending restraint by the government.

CORPORATES
AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN LABOR PARTY

TV main source of news – and most trusted

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Oct-18

A Roy Morgan Single Source survey has found that over 13 million Australians (65.6%) now say TV is a main source of news. This includes over 12.6 million (62.3%) who specifically nominate free-to-air TV. The internet is used as a main source of news by 11.7 million Australians (57.8%); social media is the leading source of online news, used by 7.5 million (36.7%). Printed newspapers are used by 6.3 million (31.1%) while 5.5 million (27.3%) mainly get their news via newspaper or other news websites or apps. Radio is nominated by 9.2 million Australians (45.5%) as a main news source. Meanwhile, TV is regarded as the most trusted source of news by nearly 7.5 million Australians (36.7%), followed by radio (15.9%), news and newspaper websites/apps (12.3%) and print newspapers (11.2%). Only 4.3% consider social media to be their most trusted source of news. This is in line with Roy Morgan’s research of "Trust" and "Distrust", which showed that social media is the least trusted media.

CORPORATES
ROY MORGAN LIMITED

House prices tipped to fall faster as tighter credit rules hit buyers

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Original article by Michael Bleby
The Australian Financial Review – Page: 6 : 15-Oct-18

Sydney’s residential property market boasted a preliminary auction clearance rate of 52 per cent in the week ended 13 October, compared with a preliminary clearance rate of 53.5 per cent for the previous week. The preliminary clearance rate in Melbourne was 52.1 per cent, down from 54.4 per cent previously. The national preliminary clearance rate was also lower than the previous week, and Maria Magrin of Belle Property says prospective buyers are finding it harder to secure credit prior to auction.

CORPORATES
BELLE PROPERTY PTY LTD, CORELOGIC AUSTRALIA PTY LTD, DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA, MORGAN STANLEY AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED

Investors brace for another volatile week

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Original article by Perry Williams
The Australian – Page: 19 : 15-Oct-18

Futures pricing suggests that Australian equities will fall when the local sharemarket opens on 15 October. The S&P/ASX 200 shed 4.7 per cent in the previous week, despite a modest gain on 12 October, and Shane Oliver of AMP Capital says there is a high risk of a further correction in the short-term. The Dow Jones Industrial Average also clawed back some of its losses on 12 October, after shedding 1,300 points in the previous two trading sessions.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, AMP CAPITAL INVESTORS LIMITED, DOW JONES INDUSTRIAL AVERAGE INDEX, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, RESERVE BANK OF AUSTRALIA, TD SECURITIES, FARR, MILLER AND WASHINGTON LLC

386,000 mortgage holders have no real equity in their homes

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Oct-18

New research from Roy Morgan shows that 8.9% (386,000) of mortgage holders in Australia have little or no real equity in their home, an increase from 8.0% twelve months ago. This is based on the fact that the value of their home is only equal to or less than the amount they still owe, placing them at considerable risk if they have to sell while prices are trending down. Western Australia is the state at the highest risk, with 16.5% (90,000) of mortgage customers having no real equity in their home, an increase of 2.5% in the last year. New South Wales has the lowest proportion of mortgage holders with little or no equity in their home, at only 6.1% (82,000). These are the latest findings from Roy Morgan’s Single Source Survey, which is based on over 50,000 Australians per annum in their own homes, including more than 10,000 with owner- occupied mortgage holders.

CORPORATES
ROY MORGAN LIMITED

Inflation Expectations unchanged for a third straight month in September

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Oct-18

Australians aged +14 expect inflation of 4.3% per year over the next two years, according to the Roy Morgan Inflation Expectations Index for September 2018. This is unchanged for the third straight month, but down 0.1% from September 2017. Inflation Expectations have now tracked in a narrow range between 4.3-4.5% for 15 straight months. Inflation Expectations remain well below the eight-year average of 5.0%. Analysis by generation compared to a year ago shows that Inflation Expectations are down for Millennials, Generation Z and Pre-Boomers, unchanged for Baby Boomers and up significantly for Generation X. September Inflation Expectations are based on a nationwide face-to-face survey of 4,304 Australians aged 14+.

CORPORATES
ROY MORGAN LIMITED

Australian Digital Inclusion Index above 60 for first time

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Oct-18

The 2018 Australian Digital Inclusion Index, which is powered by Roy Morgan Research’s Single Source, shows that progress on improving Digital Inclusion is being made across all three measures of Access, Digital Ability and Affordability. However, there are significant demographic groups which still require more targeted investment and development to bridge the gaps on access and digital ability in particular. Nationally, Australia scored 73.4 on Access in the 12 months to March 2018, up from 70.8 a year ago and up nearly 10 points since 2014. The Affordability score of 57.6 represents an increase of 2.1 points from a year ago, while the Digital Ability score of 49.5 has increased by 7.3 points since 2014. The increase in Digital Ability reflect steady improvements in the three core components of Digital Ability (Attitudes, Basic Skills and Activities). All three components have increased in every year since 2014.

CORPORATES
ROY MORGAN LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, RMIT UNIVERSITY, SWINBURNE UNIVERSITY OF TECHNOLOGY. CENTRE FOR SOCIAL IMPACT

AUD subdued on Friday after tumultuous week. AFEX Monday update – October 15, 2018

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It was a mixed week for the Australian dollar with turmoil in equity markets weighing heavily mid-week, but a recovery ensued enabling the AUD to settle back above 0.7100 at the close on Friday.

All appeared ok in the markets early in the week, but on Wednesday in the US investors quickly shifted into overdrive and ditched their equity holdings.  The appeal of risk-free bond yields at 7-year highs appeared the key catalyst.  With equities down over 3% in the session, currency traders flocked to the safe havens of the Japanese yen, Swiss franc and US dollar – leaving the risk-currencies like the AUD completely out of favour as traders rushed to the exits.

The Australian dollar fell from 0.7130 at 4.30pm on Wednesday to 0.7043 at 7.30am on Thursday, a 1.2% swing.  But as quickly as the sell-off happened, by 11.30pm Thursday night it had fully recovered and spent the remainder of the week grinding sideways to close at 0.7110.

The AUD also lost ground against the EUR.  For a while there on Thursday AUD/EUR touched its lowest level since August 2015 at 0.6112, a far cry from the 0.7300 level where it traded in February 2017.  It managed to bounce higher off the lows to close the week out at 0.6151.

It was a similar story for the AUD/GBP, where on Thursday it traded at the lowest level since June 2016 at 0.5335.  However it also managed a recovery, closing the week at 0.5404.

The week ahead is quite busy on the economic front.  In the US, retail sales lead the way on Monday night, followed by the Fed meeting minutes on Thursday night.  Throughout the week there are also a host of speeches by Fed members.  Locally we have the RBA publishing their meeting minutes on Tuesday, followed by employment data on Thursday.  In the UK, highlights include employment data on Tuesday, CPI on Wednesday and retail sales on Thursday.  In addition, the Brexit negotiations will be a key factor in how the sterling trades this week and US treasuries and the US/China trade tiff will be key determinants on how the USD trades.

Given the plethora of economic data and political events this week, no doubt we are in for another volatile week ahead in the currency markets.  Expected weekly trade ranges:

  • AUD/USD:  0.7040 – 0.7215.  Neutral bias
  • AUD/EUR:  0.6110 – 0.6180.  Neutral bias
  • AUD/GBP:  0.5330 – 0.5520.  Bullish bias

I’m expecting the sterling to be the key trade this week.  Given Brexit negotiations appear to have missed the deadline for the EU’s October meeting, there could be some negativity towards the GBP as a result.  This could help AUD/GBP recover in the short-term.

James King
Head of FX Dealing. AFEX
www.afex.com

Don’t vote for Libs: Turnbull’s son

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Original article by Andrew Clennell
The Australian – Page: 1 & 4 : 12-Oct-18

Alex Turnbull has urged voters in Wentworth not to vote for the Liberal Party at the upcoming by-election. The son of former prime minister Malcolm Turnbull claims that the Liberal Party has been taken over by the "hard right", and that voters need to send a message to the federal government on climate change. Liberal candidate Dave Sharma is regarded as slightly ahead of independent candidate Dr Kerryn Phelps in polling. The government needs to win the by-election to retain its one-seat majority in the House of Representatives.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY, NEW SOUTH WALES. DEPT OF PREMIER AND CABINET