K62 Finance

Birth of municipal bond market for local councils

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 7-Nov-14

Thirty of the 79 local councils in Victoria will join forces to issue $A200m worth of bonds via the Local Government Funding Vehicle, which has an "Aa2" rating from Moody’s Investors Service. The councils will offer both five- and seven-year notes, which will be priced on 7 November 2014. However, the indicative pricing margins are lower than those of the major banks

CORPORATES
LOCAL GOVERNMENT FUNDING VEHICLE, MOODY’S INVESTORS SERVICE INCORPORATED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

ANZ-Roy Morgan Consumer Confidence Unchanged at 114.6

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 5-Nov-14

The ANZ-Roy Morgan Consumer Confidence rating for Australia was unchanged at 114.6 in the week ended 2 November 2014. The four-week average remains at its highest level since late April. Perceptions of household finances compared with 12 months ago rose by 0.9 per cent, and continues to point to a modest pickup in consumer spending. However, households’ expectations of the economic outlook over the next year fell by 5.8 per cent

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

APRA rules to hit banks’ funding costs

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Original article by Michael Bennet
The Australian – Page: 21 : 5-Nov-14

The Australian Prudential Regulation Authority on 4 November 2014 announced the details for the liquidity coverage ratio (LCR) under the Basel III reforms, which will take effect from 1 January 2015. To meet the LCR requirements, Australian banks can seek committed liquidity facilities from the Reserve Bank, and the fee for this has now been set at 15 basis points. This equates to some $A400m for the four main banks combined. The sector had strongly lobbied against such an impost, in the submissions to the Federal Government’s financial system inquiry

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, RESERVE BANK OF AUSTRALIA, MOODY’S INVESTORS SERVICE INCORPORATED

Reserve Bank keeps interest rate mantra

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Original article by Jacob Greber
The Australian Financial Review – Page: 3 : 5-Nov-14

The Australian dollar late in the trading on 4 November 2014 rose to $US0.8724 from $US0.8694, following news that the Reserve Bank of Australia was leaving the official cash interest rate unchanged. The board meeting earlier in the day resulted in the 14th consecutive non-adjustment of the 2.5% rate, and the central bank has signalled that this will remain the case until close to mid-2015. The high foreign exchange rate is a major reason, although there are concerns that the low cost of home mortgage borrowing is creating a residential real estate prices bubble. Inflation is benign but the terms of trade are worsening

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN BUREAU OF STATISTICS

NAB tells rivals it is ready for a fight

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Original article by James Eyers, Joyce Moullakis
The Australian Financial Review – Page: 13 & 16 : 31-Oct-14

National Australia Bank (NAB) posted a 4.5 per cent decline in net interest income from business lending in the year to 30 September 2014. CEO Andrew Thorburn says the banking major will pursue a range of measures to ensure that it remains Australia’s leading business bank, including hiring more business bankers. He has ruled out relaxing NAB’s lending standards in the sector. NAB has reported a 2013-14 profit of $A5.18bn

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE GROUP LIMITED – ASX MQG, ARNHEM INVESTMENT MANAGEMENT PTY LTD, RESERVE BANK OF AUSTRALIA, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED

Young Australians saved over $650 million

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 30-Oct-14

Roy Morgan Research’s latest Young Australians Survey has found that 74 per cent of Australians aged 6-13 currently have personal savings, which total $A653m. The survey, which was carried out in the year to June 2014, also shows that the average amount saved by Australians in this age group is $A285, while 21.2 per cent have savings of less than $A50 and 10.2 per cent have savings of $A1,000 or more

CORPORATES
ROY MORGAN RESEARCH LIMITED, HERITAGE BANK LIMITED – ASX HBS, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

NAB to step up UK asset sales

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Original article by Clancy Yeates, James Eyers
The Australian Financial Review – Page: 30 : 30-Oct-14

Some analysts believe that National Australia Bank (NAB) will divest the UK’s Clydesdale Bank via an IPO within six months. NAB is likely to reveal its sale options for the Clydesdale and Yorkshire Bank businesses when its 2013-14 financial results are released on 30 October 2014. NAB is tipped to post a full-year profit within the range of $A5.1bn to $A5.2bn, down from $A5.94bn previously

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CLYDESDALE BANK PLC, YORKSHIRE BANK PLC, GREAT WESTERN BANK, MLC LIMITED, GREAT BRITAIN. FINANCIAL CONDUCT AUTHORITY

Suncorp urges inquiry to level the playing field

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Original article by Clancy Yeates
The Australian Financial Review – Page: 27 : 30-Oct-14

Suncorp CEO Patrick Snowball believes that the Federal Government’s financial system inquiry focuses excessively on the stability of Australia’s banking system while paying little attention to competition in the sector. He said on 29 October 2014 that smaller banks are disadvantaged by the current regulations. Snowball also spoke against allowing foreign insurers to sell policies in north Queensland

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, WESTPAC BANKING CORPORATION – ASX WBC, AMERICAN CHAMBER OF COMMERCE IN AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC

Risk of ‘fiscal fiasco’ if China runs off the rails

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Original article by David Uren
The Australian – Page: 2 : 27-Oct-14

Deloitte Access Economics has released a new report on the potential impact on Australia of a more rapid slowing of GDP growth in China. The latter accounts for 38% of Australian exports, and if its growth rate falls to under 4% per annum Australia is likely to experience a recession. The forecasting firm warns that the Federal Government must do more to rein in the Budget deficit in light of this scenario. However Deloitte still maintains that the most likely outcome is growth in China of 7% or more, and a fall in Australia’s terms of trade of 9.2% for 2014-15 before less dramatic declines of between 1% and 2% a year in the period to 2018-19

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

Boart Longyear saved in Centerbridge deal

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Original article by Paul Garvey
The Australian – Page: 21 : 24-Oct-14

The US-based Centerbridge Partners private equity firm has announced that it will make as much as $US352m ($A401.8m) available to troubled mining services group Boart Longyear in a debt-to-equity deal. The Australian-­listed drilling company has suffered a share price decline of 93%-plus in a little over 1.5 years, and had recently created doubt over its ability to continue as a going concern. Centerbridge will lift its stake from 13% to between 41.6% and 70%, although its voting stock holding will be restricted to 49.9%

CORPORATES
BOART LONGYEAR LIMITED – ASX BLY, CENTERBRIDGE PARTNERS LP, BILLABONG INTERNATIONAL LIMITED – ASX BBG, OAKTREE CAPITAL MANAGEMENT LLC, UBS HOLDINGS PTY LTD