K64 Auxiliary Finance and Insurance Services

Tabcorp split follows trend showing spike in demerger share prices

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Original article by Richard Henderson
The Australian Financial Review – Page: 27 : 26-May-22

The Lottery Corporation has a market capitalisation of $10bn following its demerger from Tabcorp. UBS estimates that the combined share price movements of the two stocks since the split has added about 7.5 per cent to the market value of both companies. AGL Energy and Incitec Pivot are among other listed companies that are pursuing demerger plans. Nick Alexander of UBS says demergers often prompt mergers and acquisitions activity, while Macquarie Group’s analysis shows that spin-offs typically underperform for the first six months but tend to outperform in the long-term.

CORPORATES
THE LOTTERY CORPORATION LIMITED – ASX TLC, TABCORP HOLDINGS LIMITED – ASX TAH, AGL ENERGY LIMITED – ASX AGL, INCITEC PIVOT LIMITED – ASX IPL, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG

Labor to regulate buy now, pay later

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Original article by Glenda Korporaal
The Australian – Page: 19 : 27-Apr-22

Shadow financial services minister Stephen Jones has flagged greater regulation of the ‘buy now, pay later’ sector if Labor wins the federal election. Jones says the BNPL sector is operating in an "ambiguous" regulatory space, and he contends that it requires some degree of regulation as it is directly competing with credit providers. He has also indicated that Labor will take action to halt a sharp decline in the number of financial advisers, with many leaving the industry in recent years due to federal government reforms.

CORPORATES
AUSTRALIAN LABOR PARTY

Buy now, merge later: Zip, Sezzle in $491m tie-up

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Original article by David Ross
The Australian – Page: 13 & 16 : 1-Mar-22

Zip Co will acquire ‘buy now, pay later’ rival Sezzle in an all-scrip deal that values the latter at $491 million. The transaction comes less than two months after Latitude Financial announced that it would buy Humm’s BNPL and credit card businesses. The announcement coincided with the release of Zip’s results for the six months to 31 December. Zip reported an interim loss of $172.8 million, down from $455.9 million a year earlier, while revenue was up 89 per cent to $302.2 million.

CORPORATES
ZIP CO LIMITED – ASX Z1P, SEZZLE INCORPORATED – ASX SZL, LATITUDE FINANCIAL SERVICES GROUP LIMITED – ASX LFS, HUMM GROUP LIMITED – ASX HUM

Buy now, merge later: Zip, Sezzle in $491m tie-up

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Original article by David Ross
The Australian – Page: 13 & 16 : 1-Mar-22

Zip Co will acquire ‘buy now, pay later’ rival Sezzle in an all-scrip deal that values the latter at $491 million. The transaction comes less than two months after Latitude Financial announced that it would buy Humm’s BNPL and credit card businesses. The announcement coincided with the release of Zip’s results for the six months to 31 December. Zip reported an interim loss of $172.8 million, down from $455.9 million a year earlier, while revenue was up 89 per cent to $302.2 million.

CORPORATES
ZIP CO LIMITED – ASX Z1P, SEZZLE INCORPORATED – ASX SZL, LATITUDE FINANCIAL SERVICES GROUP LIMITED – ASX LFS, HUMM GROUP LIMITED – ASX HUM

Future Fund tops $200b, banks on active managers

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 15 & 20 : 2-Feb-22

The federal government’s Future Fund has posted a return of 19.1 per cent for 2021. The sovereign wealth fund’s assets under management rose to a new high of $204bn during the calendar year. It has achieved a return of about 10.8 per cent each year since it was established in 2006 with just $60.5bn worth of assets. Future Fund CEO Raphael Arndt has warned that investors cannot expect the "easy returns" of the last decade or so to continue. He adds that some asset classes will be impacted when interest rates start to rise, although he has downplayed the prospect of stagflation.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY

Profits headed for record

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Original article by Alex Gluyas
The Australian Financial Review – Page: 1 & 27 : 1-Feb-22

Analysts are upbeat about the earnings outlook for listed companies in the February reporting season, despite headwinds such as the coronavirus-induced supply chain disruptions. The consensus of analysts is that S&P/ASX 200 companies’ growth in earnings per share will exceed pre-pandemic levels. However, Karen Jorritsma of RBC Capital Markets says it will be a "very messy" reporting season, due to factors such as rising costs. Ansell has become the latest company to downgrade its earnings per share guidance in response to cost pressures.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEXRBC CAPITAL MARKETSANSELL LIMITED – ASX ANN

Hostile bids abound in era of uncertainty

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Original article by Richard Gluyas
The Australian – Page: 15 : 23-Nov-21

Data from law firm Minter Ellison shows that there have been eight hostile takeover bids in Australia so far in 2021, following nine such bids in 2020. This compares with just five in 2019, prior to the COVID-19 pandemic. Minter Ellison notes that the target’s board did not commission an independent expert’s report in 15 of the last 20 hostile takeover bids. Alberto Colla of Minter Ellison says bidders usually prefer to pursue a friendly takeover bid that has the support and recommendation of the target’s board.

CORPORATES
MINTER ELLISON

ASX carrying $200b of zero-profit market cap

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Original article by Vesna Poljak
The Australian Financial Review – Page: 29 : 23-Nov-21

Research by MST Marquee shows that 48 companies in the S&P/ASX 300 currently do not make a profit. This compares with an average of 37 over the last two decades. The 48 unprofitable companies have a combined market capitalisation of about $200bn. Hasan Tevfik of MST suggests that central banks are a major cause of the rise in profitless companies, with ultra-low interest rates prompting an increase in speculative investment.

CORPORATES
MST MARQUEE, STANDARD AND POOR’S ASX 300 INDEX

Final tranche of Hayne reforms a milestone

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Original article by James Frost
The Australian Financial Review – Page: 18 : 28-Oct-21

The federal government will legislate to implement a further six recommendations arising from the Hayne royal commission on 28 October. The last tranche of legislation includes a bill to replace the Banking Executive Accountability Regime with the broader-based Financial Accountability Regime, which will also apply to the insurance and superannuation sectors. The government will also establish the Compensation Scheme of Last Resort, which will eventually be fully funded via an industry level. Kenneth Hayne released his final report in February 2019.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Australian firms line up to launch inevitable local Bitcoin ETFs

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Original article by Dominic Powell
Brisbane Times – Page: Online : 27-Oct-21

The lack of a custody regime for cryptocurrencies prevents the launch of Bitcoin exchange-traded funds in Australia at present, although changes to the regulatory regime are expected in 2022. Betashares CEO Alex Vynokur says it is inevitable that a local Bitcoin ETF will be launched in Australia, adding that his firm would be interested in entering this market. Holon MD Heath Behncke says his firm would also be keen to launch a Bitcoin ETF. The world’s first listed Bitcoin ETF has performed well following its recent debut in the US.

CORPORATES
BETASHARES CAPITAL LIMITED, HOLON GLOBAL INVESTMENTS LIMITED