K: Financial and Insurance Services

Fears ASX may have peaked after killer quarter

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Original article by Joshua Peach, Joanne Tran
The Australian Financial Review – Page: 13 & 21 : 1-Oct-24

The benchmark S&P/ASX 200 gained 6.5 per cent during the September quarter, with Zip Co, Orora and Guzman y Gomez among the best-performing stocks during the period. September was also a strong month for the local bourse, which reached new record highs in seven separate trading sessions and delivered the best return for the month since 2013. However, Jason Steed from JP Morgan is amongst those who believe that the Australian sharemarket may struggle to post further gains, noting that the earnings outlook is relatively weak.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ZIP CO LIMITED – ASX ZIP, ORORA LIMITED – ASX ORA, GUZMAN Y GOMEZ LIMITED – ASX GYG, JP MORGAN AUSTRALIA LIMITED

CBA trials AI to replace local call centre staff

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Original article by Paul Smith
The Australian Financial Review – Page: 16 : 17-Sep-24

The Commonwealth Bank is trialling a ChatGPT-style platform called Hey CommBank, with a view to use it to potentially replace thousands of local call centre staff. CBA chief data and analytics officer Andrew McMullan says he expects there will come a time when its customers have become so used to using ChatGPT-style services that it will become the way that they interact with the bank, while Finance Sector Union assistant secretary Nicole McPherson has labelled the CBA’s plans to replace local call centre staff with its Hey CommBank platform as "disrespectful and tricky".

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, FINANCE SECTOR UNION

ANZ’s Elliott dismisses conspiracy theory

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Original article by Lucas Baird, Jonathan Shapiro
The Australian Financial Review – Page: 15 : 13-Sep-24

ANZ CEO Shayne Elliott has sought to downplay the impact of the scandal that has engulfed its trading room during a town hall meeting with the bank’s staff on Wednesday. The trading room is currently the subject of three separate investigations – the reporting of inflated data to a government agency, an investigation into its bond trading and allegations of serious workplace misconduct – with Elliott telling staff the ANZ’s view was that the three issues were unrelated. However, he said the media has speculated otherwise, and has "spun them into this big conspiracy theory".

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Weak conditions to put a dampener on dividends

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Original article by Glenda Korporaal
The Australian – Page: 13 & 16 : 11-Sep-24

Australian-listed companies paid out more than $80bn worth of dividends in 2023-24, which is five per cent higher than the previous financial year. However, Ryan Felsman from CommSec warns that shareholders should expect lower dividend payouts in 2023-24. He says that energy, consumer discretionary and real estate stocks in particular are likely to deliver lower dividends in the current fiscal year. A report from CommSec has concluded that despite some headwinds, returns on Australian shares are still attractive compared with alternatives such as bank deposits, bonds and international equities.

CORPORATES
COMMONWEALTH SECURITIES LIMITED

The $5.1 billion problem costing one in four workers

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Original article by Millie Muroi
The Age – Page: Online : 28-Aug-24

The Super Members Council estimates that about 2.8 million workers were not paid their full superannuation entitlement in 2021-22, which equates to one in four workers. The underpayment totalled $5.1bn, which is around $1,800 per worker. The council says this could reduce affected employees’ retirement payouts by around $30,000; it also notes that unpaid super could force many people to delay their retirement. The council contends the federal government’s legislation requiring employers to align super contributions with their pay period rather than each quarter will help reduce underpayments; however, Labor has yet to legislate the change.

CORPORATES
SUPER MEMBERS COUNCIL

The share of mortgage holders At Risk of mortgage stress fell in July after the Stage 3 tax cuts

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Aug-24

New research from Roy Morgan shows that 1,604,000 mortgage holders (29.8%) were ‘At Risk’ of ‘mortgage stress’ in the three months to July 2024. This represents a decrease of 0.5% points on the June figures after the introduction of the Stage 3 tax cuts in July increased household income for millions of Australians, including many mortgage holders. The level of mortgage holders ‘At Risk’ of mortgage stress is set to fall further over the next few months. However, a reduction in mortgage stress will not happen if the Reserve Bank board decides to raise interest rates at its next meeting in September. The number of Australians ‘At Risk’ of mortgage stress has increased by 797,000 since May 2022, when the RBA began a cycle of interest rate increases. Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ of mortgage stress is now numbered at 982,000 (18.9% of mortgage holders), which is significantly above the long-term average over the last 10 years of 14.5%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year, including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

Call to simplify IPO process to revive market

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Original article by Joyce Moullakis
The Australian – Page: 18 : 6-Aug-24

Neil Pathak from law firm Ashurst has called for an overhaul of ASX Limited’s procedures for undertaking an IPO. He contends that the process for listing on the Australian sharemarket is too lengthy, noting that an IPO can take four months while a capital raising can be initiated and completed within two weeks. Data from the London Stock Exchange Group shows that a total of $US372.9m has been raised via IPOs in Australia so far in 2024; this is slightly higher than the same period in 2023, but well below the 2021 figure of $US3.9bn.

CORPORATES
ASHURST AUSTRALIA, ASX LIMITED – ASX ASX, LONDON STOCK EXCHANGE GROUP

Traders gird for dangerous 48 hours

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Original article by Sarah Jones
The Australian Financial Review – Page: 27 : 31-Jul-24

Bond market pricing suggests that there is about a 20 per cent chance that the Reserve Bank of Australia will increase the cash rate in August. The chances of a rate rise in September are now 31 per cent. Quarterly CPI data to be released on Wednesday is likely to be a key factor in the RBA’s monetary policy decision; the central bank’s preferred measure of trimmed mean inflation is tipped to ease from one per cent to 0.9 per cent. Investors will also be keenly awaiting the outcome of the US Federal Reserve’s two-day policy meeting, and signs that rate cuts are on its agenda in coming months.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Investors brace for bruising earnings season

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Original article by Sarah Jones
The Australian Financial Review – Page: 21 : 30-Jul-24

Factors such as the cost-of-living crisis and high interest rates are expected to weigh on the August corporate reporting season. Macquarie has forecast a six per cent decline in earnings across the market for 2023-24, although the broker anticipates earnings growth of 10 per cent in 2024-25. Jun Bei Liu from Tribeca Investment Partners in turn expects the earnings season to be one of the softest in recent times, stating that revenue and margins are likely to have remained under pressure due to factors such as high labour costs and slowing economic growth.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, TRIBECA INVESTMENT PARTNERS PTY LTD

Longo suspects ANZ broke law

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Original article by Ronald Mizen, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 6 : 24-Jul-24

Australian Securities & Investments Commission chairman Joe Longo has responded to claims by ANZ CEO Shayne Elliott regarding the bank’s government bond scandal. Elliott said ANZ does not believe that there was any wrongdoing on its part, and ASIC has simply asked it to "please explain" some "unusual activity" in the bond market in April 2023. However, Longo says it is on the public record that ASIC is investigating the bond trades, adding that this means by definition that the corporate regulator suspects a breach of the law. Longo has also advised that ASIC has established a dedicated insider trading team.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION