Author: roymorgansocial

BHP explores growth options

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Original article by Matt Chambers
The Australian – Page: 20 : 17-May-18

BHP Billiton CEO Andrew Mackenzie has told a conference in the US that the group’s debt is now within its target range of $US10bn to $US15bn, compared with $US15.4bn at the end of 2017. He also flagged further capital returns to shareholders and said BHP has a range of growth options that could potentially add value to the tune of $US15bn. Meanwhile, Rio Tinto CEO Jean-Sebastien Jacques has told the conference that the resources giant may use some excess cash to finance acquisitions rather than return it to shareholders.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED

Labor will stick to top tax rate of 49pc

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Original article by Phillip Coorey
The Australian Financial Review – Page: 6 : 17-May-18

Shadow treasurer Chris Bowen has used a National Press Club speech to reiterate that a Labor government would reinstate the temporary budget repair levy. Bowen argued that the two per cent levy on incomes of more than $A180,000 is justified as the Budget is still in deficit. He added that Labor would retain the levy until the Budget is sustainably in surplus, and nominated one per cent of GDP as a likely figure. Bowen also gave indications that Labor will support the second stage of the May 2018 Budget’s income tax package.

CORPORATES
AUSTRALIAN LABOR PARTY, NATIONAL PRESS CLUB (AUSTRALIA)

Flat wages cast doubt on budget

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Original article by Adam Creighton
The Australian – Page: 1 & 4 : 17-May-18

New figures show that Australian wages rose by just 0.5 per cent in the March quarter, unchanged from the three months to December. Independent economist Saul Eslake says the wage price index data may undermine the Federal Government’s forecast for a Budget surplus in 2019-20, which is dependent on growth in wages and consumer spending. The subdued growth in wages may also affect the outlook for official interest rates, with Sarah Hunger of BIS Oxford Economics suggesting that the cash rate could potentially be on hold until 2020.

CORPORATES
BIS OXFORD ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIAN LABOR PARTY

Union vows to sue after blackmail case folds

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 1 & 2 : 17-May-18

Victoria’s Director of Public Prosecutions will not proceed with a blackmail case against Construction, Forestry, Mining & Energy Union officials John Setka and Shaun Reardon. Setka has indicated that he may pursue legal action against federal and state police, as well as law firm Freehills. The case against Setka and Reardon had centred on allegations that their threat to blockade Boral trucks in 2013 constituted blackmail. The CFMEU was engaged in an industrial dispute with Boral supplier Grocon at the time. The charges against Setka and Reardon had been recommended by the trade union royal commission.

CORPORATES
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF AUSTRALIA, VICTORIA. DIRECTOR OF PUBLIC PROSECUTIONS, BORAL LIMITED – ASX BLD, GROCON PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO TRADE UNION GOVERNANCE AND CORRUPTION, MELBOURNE MAGISTRATES’ COURT, UNIVERSITY OF ADELAIDE, AUSTRALIAN FEDERAL POLICE, VICTORIA POLICE, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF JOBS AND SMALL BUSINESS

Minimum wage a tax on employers, says economist

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 4 : 17-May-18

The University of Melbourne’s Professor Roger Wilkins says it is "absurd" that an increase in the minimum wage could see people on low incomes move into a higher tax bracket. It is estimated that the marginal tax rate of about 193,000 workers will rise from 19 per cent to 32.5 per cent if the minimum wage is increased by 2.1 per cent. The minimum wage was increased by 3.3 per cent in 2017, and the Australian Industry Group has advocated a 1.8 per cent rise in 2018. The Fair Work Commission is expected to announce its decision shortly.

CORPORATES
UNIVERSITY OF MELBOURNE, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIA. FAIR WORK COMMISSION, AUSTRALIAN LABOR PARTY, NATIONAL PRESS CLUB (AUSTRALIA)

Performance bonuses here to stay at ABC

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Original article by Stephen Brook
The Australian – Page: 3 : 17-May-18

The ABC has defended its remuneration system in the wake of revelations that staff received bonuses totalling $A2.6m in 2017. A spokesman has indicated that fixed remuneration rates for ABC executives are consistent with market rates, while performance pay scales are below market rates. Communications Minister Mitch Fifield notes that federal government departments abolished executive bonus schemes in 2008, but the government has no power to direct the ABC to do so.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, AUSTRALIA. DEPT OF COMMUNICATIONS AND THE ARTS, SPECIAL BROADCASTING SERVICE (SBS), NBN CO LIMITED, COMMUNITY AND PUBLIC SECTOR UNION

Millennials and Gen Z greatest growth potential for general insurance

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Original article by Roy Morgan
Market Research Update – Page: Online : 17-May-18

A Roy Morgan Single Source survey has found that 40.9% of Generation Z and 79.9% of Millennials had any type of general insurance in the year to March 2018. This compares with Baby Boomers (93.0%), Pre-Boomers (91.3%) and Gen X (90.6%). These older age groups are close to saturation with general insurance, leaving the major future growth potential with Millennials and Gen Z. The survey also shows that Gen X currently accounts for 29.5% of the value of the annual domestic general insurance premium market, followed by Baby Boomers with 28.1%. These two generations combined account for 57.6% of the current total estimated annual premium value of $23.3b for this market. Although Millennials account for 23.1% of the total premium value, their general insurance penetration of only 79.9% leaves a large market opportunity as their needs grow over the next decade. Gen Z currently accounts for only 7.4% of market value but with an overall general insurance penetration of only 40.9% there is a great growth opportunity in coming years.

CORPORATES
ROY MORGAN LIMITED

Super funds slam short term banks

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Original article by Michael Roddan
The Australian – Page: 17 & 21 : 17-May-18

Institutional investors want directors and executives of Australia’s banks to be more accountable in the wake of the banking royal commission. AustralianSuper’s chief investment officer Mark Delaney says the major banks have been too focused on short-term profits, although he notes that this has changed in the last two years. UniSuper chief investment officer John Pearce says the findings of two recent Australian Prudential Regulation Authority investigations have been more damning than the royal commission’s revelations.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIANSUPER PTY LTD, UNISUPER LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, IFM INVESTORS PTY LTD, FIRST STATE SUPER, REST SUPER PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AMP LIMITED – ASX AMP, COCA-COLA AMATIL LIMITED – ASX CCL, BLOOMBERG LP

Bond proxies and dollar feel pinch as US yields surge to seven-year high

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Original article by David Rogers
The Australian – Page: 17 & 28 : 17-May-18

The Australian dollar has fallen below $US0.75 after the yield on US 10-year government bonds peaked at 3.09 per cent, the highest level in seven years. This in turn prompted a sell-off of Australian-listed bond proxy stocks on 16 May, despite the local sharemarket posting a slight gain for the day. Hasan Tevfik of Credit Suisse expects global bond yields to rise further, and notes that Australian government bonds have a lower risk profile at present due to factors such as the nation’s low official interest rates.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, VANGUARD INVESTMENTS AUSTRALIA LIMITED, AUSTRALIANSUPER PTY LTD, BLOOMBERG LP, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, STANDARD AND POOR’S ASX 200 INDEX, TRANSURBAN GROUP LIMITED – ASX TCL, SYDNEY AIRPORT – ASX SYD, SPARK INFRASTRUCTURE GROUP – ASX SKI, APA GROUP – ASX APA, MIRVAC GROUP – ASX MGR, DEXUS RENTS TRUST, GPT GROUP – ASX GPT

Co-operative Harbour advances Santos bid

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Original article by Matt Chambers
The Australian – Page: 20 : 16-May-18

Harbour Energy has secured an indirect stake in Santos of 15.1 per cent after striking an agreement with the oil and gas group’s Chinese shareholders, ENN and Hony Capital. Santos CEO Kevin Gallagher has advised that Harbour Energy has completed due diligence, although it has yet to make a formal offer for the oil and gas group. Santos shares closed at $A6.23 on 15 May, and analysts say Harbour Energy may need to increase its initial offer if it opts to make a formal bid.

CORPORATES
SANTOS LIMITED – ASX STO, HARBOUR ENERGY LIMITED, ENN ECOLOGICAL HOLDINGS COMPANY LIMITED, HONY CAPITAL, CITIGROUP PTY LTD, EIG GLOBAL ENERGY PARTNERS, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION LIMITED