K62 Finance

Investors twitchy ahead of new capital rules

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 7 : 19-Jul-17

The Australian Prudential Regulation Authority is poised to unveil its revised capital rules for the banking sector on 19 July. There has been speculation that APRA will require banks to increase their equity capital. Meanwhile, Morgan Stanley forecasts that the Commonwealth Bank of Australia will report a common equity tier 1 capital ratio of about 9.9 per cent for fiscal 2017. Richard Wiles of Morgan Stanley says APRA’s new capital requirements constitute the biggest source of risk for CBA in the near-term.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, GOLDMAN SACHS AUSTRALIA PTY LTD

RBA signals cash rate rise to 3.5pc

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 19-Jul-17

The minutes of the Reserve Bank of Australia’s monthly board meeting for July show that it now has a neutral cash rate target of 3.5 per cent, compared with a cash rate of 1.5 per cent at present. Financial markets increased the chances of an interest rate rise in May 2018 to 91 per cent in response to the release of the minutes, which also made reference to economic indicators such as a downturn in unemployment and growth in infrastructure investment.

CORPORATES
RESERVE BANK OF AUSTRALIA, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD, GOLDMAN SACHS AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

ANZ joins the party with addition of Samsung Pay

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Original article by James Frost
The Australian Financial Review – Page: 14 : 18-Jul-17

The ANZ Bank’s Bob Belan notes that it has become the first major bank to allow customers to make mobile payments using Apple, Samsung and Android devices. ANZ will begin offering the Samsung Pay contactless mobile payments solution. It was the first Australian bank to provide access to the rival Apple Pay service. Westpac revealed plans to offer Samsung Pay earlier in 2017.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, SAMSUNG ELECTRONICS AUSTRALIA PTY LTD, SAMSUNG PAY, WESTPAC BANKING CORPORATION – ASX WBC, APPLE INCORPORATED, APPLE PAY, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, FACEBOOK INCORPORATED, MESSENGER CORPORATION, WECHAT, SNAPCHAT INCORPORATED, CITIGROUP INCORPORATED, AMERICAN EXPRESS COMPANY, CREDIT UNION AUSTRALIA LIMITED, BANK AUSTRALIA, DEFENCE BANK LIMITED, BANK OF SYDNEY LIMITED

Headaches for Reserve Bank as Aussie battler becomes dollar dazzler

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Original article by David Rogers
The Australian – Page: 17 & 28 : 18-Jul-17

The Australian dollar has gained three per cent against its US counterpart in the last week, peaking at a two-year high of $US0.7836 in intra-day trading on 17 July. Meanwhile, the Australian dollar trade-weighted index has risen to 66.4 points. Ray Attrill of National Australia Bank says the currency’s recent strength means the Reserve Bank will not increase the cash rate as quickly as financial markets had expected.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, GROUP OF TEN (G-10), UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, BLOOMBERG LP

Fed chief says increasing prices will allow rate rises

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Original article by Nick Timiraos
The Australian – Page: 27 : 14-Jul-17

The general expectation of financial markets is that the Federal Reserve will increase US interest rates again in December 2017. Federal Reserve chair Janet Yellen has told Congress that it is too soon to suggest that the US inflation rate will reach two per cent in coming years. She added that the central bank will maintain its current stand on gradually lifting the cash rate unless inflation remains persistently below its target of two per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. DEPT OF LABOR, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Competition inquiry looks into access to finance

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 13-Jul-17

A Productivity Commission inquiry into competition in the financial services sector will be wide-ranging but focus on banks. It will examine factors such as the effect of banks’ vertically integrated business models on competition and whether consumers ultimately receive the benefits of innovation in the sector. Submissions to the inquiry must be lodged by 15 September, and the Commission’s final report is slated to be completed by mid-2018.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKERS’ ASSOCIATION, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, SUNCORP GROUP LIMITED – ASX SUN, ME BANK, KING AND WOOD MALLESONS

Bank staff blind eye to terror financing

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Original article by Sam Buckingham-Jones
The Australian – Page: 5 : 13-Jul-17

AUSTRAC has concluded that Australian financial services providers such as banks should be doing more to identify and report financial transactions that may involve money laundering or terrorism financing. It contends that front-line staff in particular have a key role in identifying such activity, but they may not be doing so as they have a focus on client retention. AUSTRAC noted that 60 per cent of trading and ­settling organisations failed to report any suspicious activity in the two years to March 2016.

CORPORATES
AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Record debt levels to keep RBA on hold

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Original article by Myriam Robin
The Australian Financial Review – Page: 25 : 12-Jul-17

PIMCO Australia Robert Mead notes that a rise in the nation’s household debt-to-income ratio to a record high has coincided with a downturn in household debt in other developed countries. He warns that it will be hard for the Reserve Bank to increase the cash rate in the near-term, given the growth in household debt and residential property prices. With little prospect of a local rate rise for some time, US interest rates could potentially soon return to parity with Australian rates for the first time in 15 years.

CORPORATES
PIMCO AUSTRALIA PTY LTD, PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

NAB acts to reduce riskiest lending

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Original article by Michael Roddan
The Australian – Page: 22 : 7-Jul-17

National Australia Bank will begin assessing the ability of interest-only mortgage borrowers to repay their loan when deciding whether to approve such applications. NAB already takes into account a customer’s loan-to-income ratio when assessing all loan applications, but it will reject applications from people with high loan-to-income ratios from 8 July. The major banks have increased the interest rates on interest-only loans in recent months.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, ING DIRECT

Party over with bondcano ready to erupt

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Original article by David Rogers
The Australian – Page: 27 : 6-Jul-17

The yield on 10-year US Treasuries peaked at 2.35 per cent in early July 2017, compared with a record low of 1.32 per cent in mid-2016. Credit Suisse forecasts that the yield will reach 2.8 per cent by the end of 2017, as some of the world’s leading central banks begin tightening monetary policy. Hasan Tevfik of Credit Suisse warns that Australian-listed "bond proxy" stocks in particular are vulnerable to rising bond yields.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, SYDNEY AIRPORT – ASX SYD, APA GROUP – ASX APA, WESTFIELD CORPORATION – ASX WFD, DEXUS PROPERTY GROUP – ASX DXS, ASX LIMITED – ASX ASX, SONIC HEALTHCARE LIMITED – ASX SHL, MEDIBANK PRIVATE LIMITED – ASX MPL, TATTS GROUP LIMITED – ASX TTS, AUSNET SERVICES LIMITED – ASX AST, HEALTHSCOPE LIMITED – ASX HSO, TABCORP HOLDINGS LIMITED – ASX TAH, MACQUARIE ATLAS ROADS GROUP – ASX MQA, CHARTER HALL GROUP – ASX CHC, INVESTA OFFICE FUND – ASX IOF, BWP TRUST – ASX BWP, COMPUTERSHARE LIMITED – ASX CPU, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, SOUTH32 LIMITED – ASX S32, QANTAS AIRWAYS LIMITED – ASX QAN, CALTEX AUSTRALIA LIMITED – ASX CTX, GRAINCORP LIMITED – ASX GNC, ECLIPX GROUP LIMITED – ASX ECX, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, EUROPEAN CENTRAL BANK, BANK OF ENGLAND, BANK OF CANADA, INSTITUTE FOR SUPPLY MANAGEMENT