K62 Finance

No rate cut likely as surveys back inaction

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Original article by David Uren
The Australian – Page: 2 : 4-Oct-16

The Reserve Bank of Australia is widely tipped to leave the cash rate unchanged on 4 October 2016. The findings of the Australian Industry Group’s latest manufacturing survey support the case for rates to be left on hold. It shows that business conditions improved in key sectors of the manufacturing industry during September. Other recent surveys has also been upbeat about business conditions.

CORPORATES
RESERVE BANK OF AUSTRALIA, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, DUN AND BRADSTREET (AUSTRALIA) PTY LTD

Banks get short shrift from investors

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Original article by Chris Kohler
The Australian – Page: 20 : 4-Oct-16

Australian banks continued to be targeted by short sellers in September 2016. Data from Deutsche Bank shows that the ANZ Bank and Westpac are the most popular among short sellers, with short positions accounting for 1.9 per cent of their issued stock, compared with 1.5 per cent for the Commonwealth Bank and one per cent for National Australia Bank. Meanwhile, Credit Suisse recently suggested that the major banks’ elevated dividend yields may eventually face downward pressure.

CORPORATES
DEUTSCHE BANK AG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CREDIT SUISSE (AUSTRALIA) LIMITED, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, STANDARD AND POOR’S ASX 200 INDEX

Three-week high for $A on new pact

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Original article by Jens Meyer
The Australian Financial Review – Page: 31 : 30-Sep-16

The Australian dollar rose above $US0.77 in early trading on 29 September 2016, reaching a three-week high. The local currency benefited from OPEC’s decision to limit oil production by between 0.7 per cent and 2.2 per cent to a range of 32.5-33.0 million barrels per day. Other commodities have already been rising lately.

CORPORATES
ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, OANDA AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND

NAB pays out $6.5m for poor advice

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Original article by Michael Roddan
The Australian – Page: 23 : 29-Sep-16

National Australia Bank has revealed that it paid $A6.5 million in compensation to customers who received poor financial advice over the past 18 months. NAB’s head of consumer banking and wealth management, Andrew Hagger, said a significant investment had been made in the bank’s complaints resolution system. The Commonwealth Bank has stated that a third of its compensation scheme was completed in June 2016.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Shareholders blast CBA CEO’s diversity bonus

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Original article by Patrick Durkin, Matthew Cranston
The Australian Financial Review – Page: 6 : 27-Sep-16

The Commonwealth Bank of Australia has been criticised for adding new targets to its bonus plan. The Australian Shareholders’ Association is concerned that CBA executives will now be rewarded for meeting targets that are unrelated to performance, following the introduction of a 25 per cent target for "diversity, inclusion, sustainability and culture". The bank’s existing 25 per cent bonus for "customer satisfaction" is also controversial. CEO Ian Narev’s remuneration for 2015-16 comprised a base salary of $A8.77 million and performance-linked bonuses of $A3.53 million.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AGL ENERGY LIMITED – ASX AGL, TELSTRA CORPORATION LIMITED – ASX TLS, WOOLWORTHS LIMITED – ASX WOW, INVESTA OFFICE FUND – ASX IOF, ISS – INTERNATIONAL SERVICE SOLUTIONS A/S

Old lenders losing battle for hearts and minds

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Original article by Michael Bennet
The Australian – Page: 23 : 22-Sep-16

The 2016 global consumer banking survey of professional services firm Ernst & Young shows that just 21 per cent of Australians completely trust that they will receive unbiased advice from their bank. The survey also found that 36 per cent of bank customers have complete trust in their financial institution, compared with 44 per cent of non-bank customers. Meanwhile, 37 per cent of Australian respondents do not consider the products of rival financial providers to be significantly different.

CORPORATES
ERNST AND YOUNG, PRICEWATERHOUSECOOPERS, MACQUARIE GROUP LIMITED – ASX MQG

Why investors and economists differ on odds of rate call

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Original article by Jessica Sier
The Australian Financial Review – Page: 25 : 22-Sep-16

Financial markets consider that there is a near-even chance that the Reserve Bank of Australia will reduce the cash rate in the first half of 2017. In contrast, the general consensus of economists is that there will be at least one more rate cut in the current monetary policy easing cycle. JP Morgan economist Tom Kennedy expects the central bank to reduce the cash rate by another 50 basis points, while James Woods of Rivkin Securities suggests that there are limits to what monetary policy can achieve in terms of economic stimulus.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, RIVKIN SECURITIES PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Rate cuts ‘hurt some but overall we gain’

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Original article by David Uren
The Australian – Page: 21 : 16-Sep-16

A report released by the Reserve Bank of Australia suggests that official interest rate cuts have a net gain for the nation overall, despite the impact on savers. The report argues that each $A1 reduction in home loan repayments results in an average increase of at least $A0.20 in expenditure on consumer durables. However, spending on durables rises by just $A0.04 on average for each $A1 increase in the interest income of net savers.

CORPORATES
RESERVE BANK OF AUSTRALIA

Formidable barriers mean Fed’s rate rise is no-go next week

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Original article by Karen Maley
The Australian Financial Review – Page: 28 : 16-Sep-16

Financial market traders have priced in a 15 per cent chance that the Federal Reserve will increase US interest rates in September 2016. Rates have increased just twice in the past when the odds of a rise have been 20 per cent or less. Unlike at present, inflation was a key issue on both occasions. Meanwhile, opinion is divided among Federal Reserve policymakers regarding the timing of a rate rise, while the central bank is unlikely to increase the cash rate prior to the presidential election in November.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED

Banks test staff on cyber security

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 15-Sep-16

Australian banks are testing their staff’s readiness for cyber security threats by sending fake "phishing" emails to employees and monitoring their responses. Steve Glynn, the chief information security officer at the ANZ Bank, has told the Sinet61 summit in Sydney that the purpose of the exercise is to identify those who could expose the bank to cyber attacks.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ASX LIMITED – ASX ASX, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION