K: Financial and Insurance Services

Slowly but surely, the RBA is turning positive

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Original article by David Rogers
The Australian – Page: 27 : 8-Aug-18

As expected, the Reserve Bank of Australia left interest rates on hold at 1.5 per cent on 7 August, marking two years since its last change in monetary policy. The RBA has maintained its guidance for economic growth in 2018 and 2019, while it expects the unemployment rate to ease to around five per cent over the next several years. The central bank has also indicated that although wages growth is likely to remain low, it should rise over time due to the improvement in the domestic economy.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

NAB’s fee strategy in spotlight

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Original article by Joanna Mather
The Australian Financial Review – Page: 8 : 7-Aug-18

The banking royal commission has been told that National Australia Bank retained "grandfathered" commissions after merging five separate superannuation funds in 2016. A former NAB executive, Paul Carter, told the inquiry that the bank had been concerned about the impact that abolishing the commissions would have on revenue, as financial planners could potentially have responded to the move by directing clients to other products. The inquiry was also told that NAB failed to inform clients that they could opt out of paying a "plan service fee".

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC LIMITED, MLC MASTERKEY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NULIS

APRA urges caution on super reforms

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Original article by Andrew White
The Australian – Page: 17 & 18 : 6-Aug-18

The Australian Prudential Regulation Authority’s deputy chair Helen Rowell says superannuation funds that are excluded from the proposed list of the 10 best-performing funds may face problems such as liquidity issues and doubts about their sustainability over the medium to long-term. She adds that the Productivity Commission’s proposed changes to the default super regime would increase APRA’s workload, as it would have to work more closely with registrable superannuation entities that do not make the "best in show" list.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. FAIR WORK COMMISSION

RBA set to celebrate two years on hold

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Original article by Patrick Commins
The Australian Financial Review – Page: 5 : 6-Aug-18

The Reserve Bank of Australia has left the cash rate unchanged at 1.5 per cent since August 2016, and the central bank is widely tipped to maintain the status quo at its board meeting on 7 August 2018. Bond traders have priced in a 20 per cent chance of a rate rise by the end of 2018, and an 80 per cent chance by mid-2019. The RBA has previously signalled that interest rates are likely to remain on hold until signs of wages growth emerge, and analysts generally believe that there will need to be upward pressure on wages for the unemployment rate to fall below five per cent.

CORPORATES
RESERVE BANK OF AUSTRALIA

Murray’s defiant plan for AMP

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Original article by Tony Boyd
The Australian Financial Review – Page: 1 & 4 : 1-Aug-18

Recently appointed AMP chairman David Murray has criticised the ASX corporate governance principles. Murray says they result in board directors having to wade through too much paperwork, leaving them with insufficient time to deal with important strategic issues. He claims the governance principles have contributed to the recent problems that have afflicted AMP and other companies in the financial services sector. The ASX governance principles require boards to have a series of committees with independent chairmen covering areas such as risk and remuneration. Murray has held for some time the view that these committees can undermine the authority of the CEO, as their chairs can establish special relationships with a company’s other senior executives.

CORPORATES
AMP LIMITED – ASX AMP ASX LIMITED – ASX ASX COMMONWEALTH BANK OF AUSTRALIA – ASX CBA AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Industry Superannuation Funds show greatest gains in satisfaction

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Original article by Roy Morgan
Market Research Update – Page: Online : 30-Jul-18

New findings from Roy Morgan show that in the six months to June 2018, industry superfund members with balances over $5,000 had higher levels of satisfaction with their fund’s performance compared to those with retail and self-managed fund (SMSFs). Over the last 12 months, industry funds have showed gains in satisfaction across all balance segments, with the best performance being a gain of 9.5% points in the over $700k group, followed by 5.0% points in the $250k to $699k segment and 4.4% points for the $100k to $249k segment. Self-managed funds had losses in satisfaction in all of these important groups, with the greatest decline being 18.3% points in the $100k to $249K bracket. Retail funds’ major gain was 10.9% points in the under $5k segment and 1.6% points in the $700k and over segment, with the other segments showing losses. Roy Morgan’s findings are based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 30,000 with superannuation.

CORPORATES
ROY MORGAN LIMITED

Macquarie’s new chief sees upside

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Original article by Joyce Moullakis, Vesna Poljak
The Australian Financial Review – Page: 1 & 21 : 27-Jul-18

Macquarie Group has announced that Shemara Wikramanayake will succeed Nicholas Moore as CEO of the investment bank. Wikramanayake, who joined Macquarie in 1987, will take up her new job towards the end of November. She has been the head of Macquarie Asset Management, which has assets of $A534.1 billion since 2008. Macquarie’s shares closed 2.6 per cent lower at $A121.70 on 26 July.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, MACQUARIE ASSET MANAGEMENT, QANTAS AIRWAYS LIMITED – ASX QAN, WESTPAC BANKING CORPORATION – ASX WBC, ST GEORGE BANK LIMITED, PERENNIAL INVESTMENT PARTNERS LIMITED, SHAW AND PARTNERS LIMITED, INDIAN PACIFIC ASSET MANAGEMENT

Risks making volatility an asset

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Original article by Samantha Bailey
The Australian – Page: 30 : 27-Jul-18

The prices of asset classes such as equities, bonds, commodities and real estate have risen sharply as global interest rates begin to rise from historic lows. Triple3 Partners’ chief investment officer Simon Ho says now is a good time to invest in volatility, which has been recognised as an asset class for more than a decade. Triple’s portfolio includes about $70 million worth of volatility strategies.

CORPORATES
TRIPLE THREE PARTNERS PTY LTD, TRIBECA INVESTMENT PARTNERS PTY LTD

Aussie stocks still have room to grow: BlackRock

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Original article by David Rogers
The Australian – Page: 27 : 26-Jul-18

The BlackRock Concentrated Industrial Share Fund posted a return of 24.45 per cent net of fees in 2017-18, and its annual return has average 19 per cent since it was founded in December 2015. The fund’s biggest holdings include Wesfarmers, Qantas and Boral, while its focus is on mid-capitalisation industrial stocks. Charlie Lanchester of BlackRock is upbeat about the outlook for Australian industrial stocks.

CORPORATES
BLACKROCK INVESTMENT MANAGEMENT (AUSTRALIA) LIMITED, BLACKROCK CONCENTRATED INDUSTRIAL SHARE FUND, WESFARMERS LIMITED – ASX WES, QANTAS AIRWAYS LIMITED – ASX QAN, BORAL LIMITED – ASX BLD, TREASURY WINE ESTATES LIMITED – ASX TWE, ARISTOCRAT LEISURE LIMITED – ASX ALL, STANDARD AND POOR’S ASX 200 INDEX, PRAEMIUM LIMITED – ASX PPS, KOGAN.COM LIMITED – ASX KGN, TRANSURBAN GROUP LIMITED – ASX TCL, SYDNEY AIRPORT – ASX SYD

What’s in store for listings in 2018

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Original article by James Frost
The Australian Financial Review – Page: 27 : 25-Jul-18

Just 39 companies listed on the Australian sharemarket during the first half of 2018, compared with 57 during the corresponding period in 2017. However, Marcus Ohm of HLB Mann Judd notes that IPO activity is traditionally higher in the second half of a calendar year. IPOs collectively raised $2.5bn in the first half of 2018, although this was dominated by the L1 Long Short Fund. The materials sector is poised to account for a significant proportion of IPOs in the second half, as it did in the first half.

CORPORATES
HLB MANN JUDD, L1 LONG SHORT FUND LIMITED – ASX LSF, LATITUDE FINANCIAL SERVICES LIMITED