K62 Finance

Fund managers to Fed: it’s time to raise rates

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Original article by Vesna Poljak
The Australian Financial Review – Page: 13 & 27 : 14-Sep-16

Financial markets have priced in a 22 per cent chance that the US Federal Reserve will increase interest rates in September 2016, while a December increase is rated a 57 per cent chance. PM Capital’s Uday Cheruvu expects the US central bank to tighten monetary policy at some point, noting that there are sufficient grounds for a rate rise. Meanwhile, Randal Jenneke of T. Rowe Price says Australian yield stocks – which bore the brunt of bearish sentiment on 12 September – are likely to fall further.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, PM CAPITAL LIMITED, T ROWE PRICE GROUP INCORPORATED, STANDARD AND POOR’S ASX 200 INDEX, EUROPEAN CENTRAL BANK, BANK OF JAPAN, BANK OF ENGLAND

Narev seeks spirit of ’91 reform

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 14-Sep-16

Commonwealth Bank of Australia CEO Ian Narev has used the 25th anniversary of the banking major’s sharemarket float to call for reforms that will promote long-term economic growth. He says the government of the day made the right decision in selling a publicly-owned bank. CBA shares have fallen by more than 10 per cent in recent weeks, with the stock closing at $A69.50 on 13 September 2016. However, investors paid just $A5.40 per share in the 1991 float.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BELL POTTER SECURITIES LIMITED

Why Commonwealth is still the investors’ favourite, 25 years on

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Original article by James Frost
The Australian Financial Review – Page: 18 : 13-Sep-16

The first tranche of Commonwealth Bank shares were issued at $A5.40 apiece in September 1991. Investors who took up the minimum of 400 shares in the float and reinvested their dividends over the following 25 years would now hold $A131,371 worth of shares in Australia’s largest bank. Financial market observers note that the first stage of the Commonwealth Bank privatisation was popular with investors, despite the challenging economic conditions at the time.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, MORGANS FINANCIAL LIMITED, MONTGOMERY INVESTMENT MANAGEMENT PTY LTD, EVANS AND PARTNERS PTY LTD, LINCOLN INDICATORS PTY LTD, PYRAMID BUILDING SOCIETY

Ombudsman wary of tribunal

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Original article by Sally Rose
The Australian Financial Review – Page: 21 : 9-Sep-16

The Financial Ombudsman Service’s chief ombudsman Shane Tregillis has spoken against a proposal to set up a new banking tribunal. He believes that such a tribunal would make the dispute resolution system more adversarial and legalistic. Tregillis has suggested that the proposal should be examined by the independent panel led by Ian Ramsay which will conduct a review of the financial services sector’s dispute resolution and complaints system.

CORPORATES
FINANCIAL OMBUDSMAN SERVICE LIMITED, CREDIT AND INVESTMENTS OMBUDSMAN, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. SUPERANNUATION COMPLAINTS TRIBUNAL, FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED, AUSTRALIAN BANKERS’ ASSOCIATION

Supervision the best defence, urges RBA

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 9-Sep-16

Philip Lowe says that thorough supervision of banks is the best way to safeguard against a financial crisis, and he argues that regulatory reforms alone are insufficient. Lowe will shortly succeed Glenn Stevens as Reserve Bank of Australia governor. The banking sector has been subject to greater scrutiny by the Australian Prudential Regulation Authority in recent years, while they are expected to face further regulatory requirements when the so-called Basel IV reforms are finalised by the Basel Committee on Banking Supervision.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, KPMG AUSTRALIA PTY LTD, GROUP OF TWENTY (G-20), UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Westpac refunds $20m over credit card transaction fees

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Original article by Clancy Yeates
The Age – Page: 21 : 9-Sep-16

Some 820,000 credit card customers of Westpac will be reimbursed after being charged foreign transaction fees on purchases via offshore merchants that were made in Australian dollars. The banking major has issued about $A20m worth of refunds after the Australian Securities & Investments Commission found that it had neglected to inform customers that such transactions would attract a so-called "foreign transaction fee". Westpac has also updated its terms and conditions.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Zero rates eould smash the banks

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 8-Sep-16

A decline in the cash rate to zero would have a negative impact on returns from Australian banking stocks. Credit Suisse analysts Jarrod Martin and James Ellis have calculated that such a scenario would trigger a fall in earnings of the major banks by an average of nine per cent or $A2.7 billion in total. Consequently, the banks would have to respond to a fall in return on equity by reducing their dividend payout ratios.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Free kick for RBA’s new chief

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Original article by Michael Bennet
The Australian – Page: 19 & 27 : 7-Sep-16

Financial markets estimate that there is a 42 per cent chance that the Reserve Bank of Australia will reduce the cash rate by the end of 2016. The general consensus of economists is that rates will remain on hold until 2017, after the central bank opted against easing monetary policy on 6 September. Expectations of a strong rise in GDP growth in the June quarter will strengthen the case for leaving rates on hold. Philip Lowe will shortly succeed Glenn Stevens as Reserve Bank governor.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS HOLDINGS PTY LTD, CLSA AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, STANDARD AND POOR’S ASX 200 INDEX, MORTGAGE CHOICE LIMITED – ASX MOC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Savers losers as banks cut term deposit rates

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Original article by Michael Bennet
The Australian – Page: 21 : 6-Sep-16

Data from Deutsche Bank shows that many Australian banks have reduced their term deposit interest rates by 15-25 basis points since the Reserve Bank cut the cash rate in August 2016. However, while rates on shorter-duration term deposits have fallen, the ANZ Bank has increased its rates on one- and two-year term deposits, while all four major banks have increased their longer-term rates for new customers. Meanwhile, the interest rates on their online savings accounts have been cut by 25 basis points.

CORPORATES
DEUTSCHE BANK AGAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZCOMMONWEALTH BANK OF AUSTRALIA – ASX CBAWESTPAC BANKING CORPORATION – ASX WBCNATIONAL AUSTRALIA BANK LIMITED – ASX NABBANK OF WESTERN AUSTRALIA LIMITEDBENDIGO AND ADELAIDE BANK LIMITED – ASX BENBANK OF QUEENSLAND LIMITED – ASX BOQRESERVE BANK OF AUSTRALIA

Dollar hit by prospects of US interest rate hike

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Original article by David Rogers
The Australian – Page: 32 : 30-Aug-16

The Australian dollar fell to a four-week low in local trading on 29 August 2016, at around the $US0.7525 level. The currency was sold down amid indications that the Federal Reserve could increase US interest rates at least once before the end of the year, and potentially in September. A downturn in the spot price of iron ore also weighed on support for the commodity currency, which peaked at $US0.7756 earlier in the month. UBS forecasts that the dollar will test the $US0.70 level by the end of the year.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD, BLOOMBERG LP, RESERVE BANK OF AUSTRALIA, QIC LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB