K62 Finance

Australia raises $7.6b in first 30-year bond

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Original article by Vesna Poljak
The Australian Financial Review – Page: 20 : 13-Oct-16

The inaugural issuance of 30-year Australian government bonds attracted more than $A13bn worth of bids from prospective investors. The offer was capped at $A7.6bn, and the yield on the long-dated bonds will be 3.27 per cent. This is significantly higher than equivalent bonds in the US, the UK and Japan, while financial market watchers had anticipated a yield of between 3.21 per cent and 3.28 per cent. Demand for the 30-year bonds and the limited supply is likely to result in strong activity in the aftermarket.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, QIC LIMITED, JP MORGAN AUSTRALIA LIMITED, BANK OF JAPAN, EUROPEAN CENTRAL BANK

Livingstone named CBA chair as Turner departs

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Original article by Richard Gluyas
The Australian – Page: 21 : 13-Oct-16

The Commonwealth Bank has advised that Catherine Livingstone will succeed David Turner as the bank’s chair in early 2017. Livingstone has praised Turner’s contribution as chairman, which he has held since 2010. Brian Johnson of CLSA notes that the bank has outperformed during Turner’s time in the role, but adds that it has underperformed in 2016. He also says Livingstone’s biggest challenge is likely to be finding an eventual successor to CEO Ian Narev.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CLSA AUSTRALIA PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, MACQUARIE GROUP LIMITED – ASX MQG, COCHLEAR LIMITED – ASX COH, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Investors embrace maiden 30-year government bond

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 8 : 12-Oct-16

There has been strong demand among international investors for the inaugural issuance of 30-year Australian government bonds. The bonds will mature in March 2047 and investors will receive a rate of 3.25 per cent. The yield on 10-year bonds is currently around 2.25 per cent. The volume and pricing of the 30-year bonds will be determined on 12 October 2016, but the issuance is believed to have attracted around $A7.5bn worth of bids from prospective investors.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, JAMIESONCOOTEBONDS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA

Wrinkles in CBA’s satisfaction crown

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Original article by Vesna Poljak
The Australian Financial Review – Page: 23 : 6-Oct-16

Roy Morgan Research’s latest survey of customer bank satisfaction shows that the Commonwealth Bank of Australia (CBA) ranked first in retail main financial institution customer satisfaction for the six months to August 2016. Customers were less satisfied with CBA’s mortgage products, with CBA ranking third out of the big four banks. CBA dominates Australia’s mortgage market, with a 25.3 per cent market share.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, ROY MORGAN RESEARCH LIMITED, AUSTRALIAN LABOR PARTY

Rates low enough to spur growth: RBA

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Original article by David Rogers
The Australian – Page: 28 : 5-Oct-16

Financial markets have priced in a 20 per cent chance that the Reserve Bank of Australia will reduce the cash rate in November 2016. The central bank left official interest rates on hold at 1.5 per cent on 4 October, and governor Philip Lowe said the board decided that the cash rate is at an appropriate level to deliver sustainable economic growth and meet the bank’s inflation target over the long-term. Lowe’s statement notably made no reference to the upcoming release of inflation data.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, CORELOGIC AUSTRALIA PTY LTD, JP MORGAN AUSTRALIA LIMITED

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