K62 Finance

Banks cheap on valuations, but ‘buy’ status questionable

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 27 : 12-Apr-16

The share prices of Australia’s four major banks have fallen by 7-12 per cent in the last month. As a result, the banks are trading at a sizeable discount based on their forward price-to-earnings ratio, which has fallen to about 11 times. However, Omkar Joshi of Watermark Funds Management notes that the banks are still much more expensive than their international peers on a price-to-book ratio.

CORPORATES
WATERMARK FUNDS MANAGEMENT PTY LTD, DEUTSCHE BANK AG, BLOOMBERG LP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ARRIUM LIMITED – ASX ARI, AURORA FUNDS MANAGEMENT LIMITED, CONTANGO ASSET MANAGEMENT LIMITED, ESANDA FINANCE CORPORATION LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

BoQ lifts mortgage rates as profit jumps 11pc

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 8-Apr-16

The Bank of Queensland has reported an 11 per cent rise in 2015-16 interim profit to $A171 million. CEO Jon Sutton says the bank’s variable interest rates for owner-occupier home loans will be raised by 12 basis points to 5.86 per cent. Mortgage rates on investor loans will rise by 25 basis points to 6.28 per cent. The new rates will take effect in mid-April 2016.

CORPORATES
BANK OF QUEENSLAND LIMITED – ASX BOQ, RESERVE BANK OF AUSTRALIA, MACQUARIE EQUITIES LIMITED, VIRGIN MONEY (AUSTRALIA) PTY LTD

Volatile equities to keep insurers’ dividends low

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Original article by Michael Rodman
The Australian – Page: 31 : 7-Apr-16

Income from their investment portfolios generates a significant proportion of Australian-listed insurance companies’ earnings. Andrew Adams of Credit Suisse says financial market volatility during the March 2016 quarter will in turn put downward pressure on their dividend payouts. Insurance Australia Group is likely to be hardest hit by the market volatility. Adams has scaled back his 2015-16 profit forecast for the group from $A920m to $A830m.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, QBE INSURANCE GROUP LIMITED – ASX QBE, SUNCORP GROUP LIMITED – ASX SUN, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX

ANZ-Roy Morgan Australian Consumer Confidence down 1.1pts to 113.4

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 5-Apr-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia fell one per cent to 113.4 in the week ended 3 April 2016, following a fall of 1.6 per cent over the previous two weeks. After being on an upward trend for the past eight weeks, the four-week moving average is now falling. Consumers’ views around the economic outlook over the next five years fell 7.6 per cent, although consumers’ views towards their finances compared to a year ago rose 2.6 per cent.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Strong $A may force RBA’s hand

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Original article by David Rogers
The Australian – Page: 19 & 28 : 6-Apr-16

AMP Capital Investors’ Shane Oliver says the Reserve Bank of Australia is unlikely to increase the cash rate for some time. He says the prospect of slowing economic growth could prompt further easing of monetary policy in the near-term. The central bank left official interest rates on hold at two per cent on 5 April 2016, and gave indications that a further rise in the Australian dollar or an increase in unemployment could provide the impetus for a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, JP MORGAN AUSTRALIA LIMITED, STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, UNITED STATES. FEDERAL RESERVE BOARD

Westpac accused of fixing market

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Original article by Leo Shanahan
The Australian – Page: 19 & 23 : 6-Apr-16

Westpac may face financial penalties of up to $A18m if allegations that it attempted to manipulate the bank bill swap rate are proven. The Australian Securities & Investments Commission’s statement of claim identifies 16 separate occasions on which the banking major is said to have engaged in such activity. The ANZ Bank is already subject to legal action by ASIC for manipulating the bank bill swap rate, while the Commonwealth Bank and National Australia Bank are being investigated.

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

RBA budget day cut ‘close’

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 8 : 4-Apr-16

The consensus of economists polled by Fairfax Media is for the Reserve Bank of Australia to leave official interest rates unchanged on 5 April 2016. However, about 25 per cent of the 12 economists expect the cash rate to be reduced on 3 May, when the Federal Government will also hand down the Budget. Some economists suggest that the recent rise in the value of the Australian dollar will prompt a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, FAIRFAX MEDIA LIMITED – ASX FXJ, NOMURA AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED, UBS HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, ST GEORGE BANK LIMITED, CAPITAL ECONOMICS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

Business Confidence rises again in March – up 2.4pts to 115.7

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 31-Mar-16

A Roy Morgan Business Single Source survey has found that Australian business confidence rose by 2.4 points to 115.7 in March 2016, and it has now risen 5.1 points over the last two months. The rise in business confidence comes after steady improvement on the Australian sharemarket in March, after the All Ordinaries Index dropped in both January and February to start the year amid global economic concerns. The level of business confidence in March is clearly positive for the economy overall and just below the five-year average of 116.6. The weakest indicators are the performance of the business compared to a year ago (+7) and expectations of economic conditions in Australia over the next 12 months (+11).

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

ANZ-Roy Morgan Australian Consumer Confidence has modest fall to 116.0

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 22-Mar-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia fell 0.3 per cent to 116.0 in the week ended 20 March 2016, following a strong 4.5 per cent rise over the previous fortnight. Confidence is now sitting three per cent above its long run average, and the four-week moving average is on an upward trend. The sub-index on "economic conditions in the next 12 months" rose 3.3 per cent and is now sitting just a touch below its long run average. The sub-index on "economic conditions in the next 5 years" rose 2.7 per cent.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ-Roy Morgan Australian Consumer Confidence has modest fall to 116.0

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Original article by Gary Morgan
Market Research Update – Page: Online : 22-Mar-16

ANZ-Roy Morgan Consumer Confidence is virtually unchanged this week at 116.0, and Roy Morgan Government Confidence has increased slightly to 103.5, both signs that Australians believe the economy is going well, which augurs well for the Turnbull Government heading towards this year’s federal election. However, support for the L-NP Government has fallen in recent weeks – this week’s Morgan Poll shows the ALP 50.5 per cent cf. L-NP 49.5 per cent on a two-party preferred basis – as the Government introduced reforms to change the Senate voting system and make it impossible for micro-parties to get elected to the Senate. In addition to forcing these contentious reforms through the Senate, Turnbull has gone back on his promises of tax cuts and this has resulted in a drop in support for the Government. Although Turnbull is using the restoration of the Australian Building & Construction Commission as a potential trigger to call an early election, the election will be fought on economic issues and taxation.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ