K64 Auxiliary Finance and Insurance Services

AFIC warns on bank dividends

roymorgansocial Leave a comment

Original article by Simon Evans
The Australian Financial Review – Page: 13 & 25 : 18-Oct-16

Australian Foundation Investment Company MD Ross Barker expects the S&P/ASX 200 to be trading at around its current level in 12 months’ time. However, he expects the 50 largest stocks to outperform small- and medium-capitalisation stocks over the next year. Barker does not anticipate any further easing of monetary policy and says there is potential for a rise in the cash rate before the end of 2017. He adds that the major banks may not be able to sustain their dividend payouts, while large miners could potentially increase their dividends in the next few years.

CORPORATES
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, TRANSURBAN GROUP LIMITED – ASX TCL, SYDNEY AIRPORT – ASX SYD, RESERVE BANK OF AUSTRALIA, WOOLWORTHS LIMITED – ASX WOW

Red flags to watch for in M&A season

roymorgansocial Leave a comment

Original article by Vanessa Desloires
The Australian Financial Review – Page: 16 : 18-Oct-16

Data from Mergermarket shows that the value of mergers and acquisitions fell by 20 per cent globally in the first nine months of 2016, to $US2.2trn ($A2.9trn). M&A activity in Australia is rising as the end of the calendar year approaches. Anthony Aboud of Perpetual has identified a number of factors which may indicate that a company is making acquisitions for the wrong reasons. These include pursuing deals solely in the interests of diversification, paying too much for goodwill and making acquisitions that are motivated by financial incentives.

CORPORATES
PERPETUAL LIMITED – ASX PPT, MERGERMARKET LIMITED, CIMIC GROUP LIMITED – ASX CIM, UGL LIMITED – ASX UGL, JB HI-FI LIMITED – ASX JBH, THE GOOD GUYS, FANTASTIC HOLDINGS LIMITED – ASX FAN, STEINHOFF INTERNATIONAL HOLDINGS LIMITED, FREEDOM FURNITURE, SNOOZE SLEEP WELL PTY LTD, THE GOLDMAN SACHS GROUP INCORPORATED, SLATER AND GORDON LIMITED – ASX SGH, QUINDELL PLC, PERPETUAL’S SHARE-PLUS LONG SHORT FUND

ASX to hit 6000 in ’17, says Credit Suisse

roymorgansocial Leave a comment

Original article by Vanessa Desloires
The Australian Financial Review – Page: 25 : 18-Oct-16

Hasan Tevfik of Credit Suisse believes that the Australian sharemarket’s "profits recession" of the last several years has ended, which will be reflected in the market’s outlook. Credit Suisse expects the benchmark S&P/ASX 200 to reach the 6,000-point level by the end of 2017, buoyed by single-digit growth in earnings per share over the next year. Meanwhile, Matthew Sherwood of Perpetual is upbeat about the outlook for the economy, forecasting a rise in GDP growth over the next 12 months.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CREDIT SUISSE (AUSTRALIA) LIMITED, PERPETUAL LIMITED – ASX PPT, ANSELL LIMITED – ASX ANN, BLUESCOPE STEEL LIMITED – ASX BSL, CALTEX AUSTRALIA LIMITED – ASX CTX, COMPUTERSHARE LIMITED – ASX CPU, FORTESCUE METALS GROUP LIMITED – ASX FMG, LEND LEASE GROUP LIMITED – ASX LLC, MAQUILADORA PARTNERSHIP, MYER HOLDINGS LIMITED – ASX MYR

ASX to face fresh competition

roymorgansocial Leave a comment

Original article by Andrew White
The Australian – Page: 19 & 23 : 12-Oct-16

Stock exchange operator ASX Limited could potentially lose its monopoly on clearing and settlement services. Competition in the clearing of securities in particular is being scrutinised by the Australian Government as part of its broader competition law reforms. Several international players have already been granted licences to provide clearing services for over-the-counter derivatives, while share trades were opened to competition in 2011.

CORPORATES
ASX LIMITED – ASX ASX, CHI-X AUSTRALIA PTY LTD, COUNCIL OF FINANCIAL REGULATORS, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, DIGITAL ASSET HOLDINGS, CME, LCH.CLEARNET SA

Investors circle ailing companies in the valley of debt

roymorgansocial Leave a comment

Original article by Vera Sprothen
The Australian – Page: 19 & 23 : 12-Oct-16

Preqin estimates that private debt fund managers had access to a record $US199bn ($A262bn) at the end of June 2016. Such companies are believed to be seeking to acquire distressed assets in Australia, including sectors such as resources, mining services, agricultural and housing. Distressed debt funds are said to be looking to buy debt-burdened companies or the debts of businesses than cannot meet their repayments. Oaktree Capital Management and Lone Star Funds are among the global debt fund managers that have established a presence in Australia.

CORPORATES
PREQIN LIMITED, OAKTREE CAPITAL MANAGEMENT LLC, LONE STAR FUNDS, BAIN CAPITAL CREDIT, SC LOWY FINANCIAL (HK) LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, ARRIUM LIMITED – ASX ARI, PEABODY ENERGY CORPORATION, RESERVE BANK OF AUSTRALIA, WELLS CAPITAL MANAGEMENT, ALLENS, McALEESE LIMITED – ASX MCS, BHP BILLITON LIMITED – ASX BHP, ROYAL DUTCH SHELL PLC

Tech listings star as IPOs outperform

roymorgansocial Leave a comment

Original article by Chris Kohler
The Australian – Page: 20 : 10-Oct-16

Australia’s benchmark S&P/ASX 200 gained 3.9 per cent during the September 2016 quarter. However, data from OnMarket shows that the 24 IPOs during the quarter achieved an average return of 28.2 per cent over the period, and an average of 28.6 per cent in their first week as a listed company. Technology stocks in particular have performed well, although exceptions include Kogan.com, which is trading below its issue price.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ONMARKET, KOGAN.COM LIMITED – ASX KGN, VIVA ENERGY REIT – ASX VVR, MICHAEL HILL INTERNATIONAL LIMITED – ASX MHJ, PROPERTYLINK GROUP LIMITED – ASX PLG, SCOTTISH PACIFIC GROUP LIMITED – ASX SCO, QANTM INTELLECTUAL PROPERTY LIMITED – ASX QIP

Active fund managers lag those lazy index-huggers

roymorgansocial Leave a comment

Original article by David RogersDaniel Palmer
The Australian – Page: 19 & 31 : 7-Oct-16

Data from S&P Dow Jones Indices shows that the returns of most Australian active fund managers have lagged their benchmark index over periods of one, three, and five years. Mid-cap and small-cap funds are the only ones to have outperformed their benchmark over these periods, according to data up to the end of June 2016. BetaShares MD Alex Vynokur notes that global themes and decisions regarding asset allocations have become a major influence on returns.

CORPORATES
S&P DOW JONES INDICES LLPBETASHARES CAPITAL LIMITEDSTANDARD AND POOR’S ASX 200 INDEXSTANDARD AND POOR’S ASX ALL ORDINARIES ACCUMULATION INDEXWILSON ASSET MANAGEMENTWAM EQUITY FUNDWATERMARK FUNDS MANAGEMENT PTY LTDWATERMARK MARKET NEUTRAL FUND LIMITED – ASX WMKANTIPODES GLOBAL INVESTMENT COMPANY LIMITED – ASX APLPENGANA CAPITAL LIMITEDPENGANA AUSTRALIAN EQUITIES FUND

Citi tips ASX to hit 6000 by end of 2017

roymorgansocial Leave a comment

Original article by Jessica Sier
The Australian Financial Review – Page: 31 : 7-Oct-16

Citigroup is bullish about the outlook for Australian equities and corporate earnings. It forecasts that the benchmark S&P/ASX 200 will gain 10 per cent over the next year or so to top the 6,000-point level by the end of 2017. Citigroup also expects the corporate sector to post earnings growth of eight per cent in 2016-17, following an 11 per cent decline in 2015-16. The firm is also upbeat about global equities, anticipating a 10 per cent rise by the end of 2017.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEXCITIGROUP PTY LTDMORGAN STANLEY AUSTRALIA LIMITEDRESERVE BANK OF AUSTRALIA

Sovereign debt could well be the driver of the next share selloff

roymorgansocial Leave a comment

Original article by Philip Baker
The Australian Financial Review – Page: 32 : 6-Oct-16

Australia’s benchmark S&P ASX 200 is currently trading on a forward price-earnings ratio of around 16 times, compared with its long-term average of about 14.5 times. The index reached a 2016 high of 5,587 points at the start of August, and despite a number of pullbacks it is still three per cent higher than at the start of the year. However, the prospect of an eventual end to quantitative easing by central banks is likely to put upward pressure on government bond yields, which will in turn weigh on sentiment toward equities.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ROYAL BANK OF SCOTLAND GROUP PLC, THE GOLDMAN SACHS GROUP INCORPORATED, JP MORGAN CHASE AND COMPANY, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF RICHMOND, SYDNEY AIRPORT – ASX SYD, TRANSURBAN GROUP LIMITED – ASX TCL

Henderson, Janus create $US6b giant

roymorgansocial Leave a comment

Original article by Vesna Poljak, Jessica Gardner
The Australian Financial Review – Page: 13 & 16 : 4-Oct-16

Australian-listed global fund manager Henderson Group will merge with US-based Janus Capital Group. Henderson shareholders will control 57 per cent of the new entity, which will be called Janus Henderson GlobalInvestors and boast $US320bn worth of assets under management. Henderson CEO Andrew Formica and former Pimco executive Dick Weil will be joint CEOs of the merged company, which will be dual-listed on the Australian and New York stock exchanges.

CORPORATES
HENDERSON GROUP PLC – ASX HGG, JANUS CAPITAL GROUP INCORPORATED, JANUS HENDERSON GLOBALINVESTORS, PACIFIC INVESTMENT MANAGEMENT COMPANY LLC