K: Financial and Insurance Services

Higher volatility is going to be a fact of life again

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Original article by Bill Bovingdon, Chris Dickman
The Australian Financial Review – Page: 23 : 26-Feb-18

Further volatility can be expected across all asset classes as central banks wind back quantitative easing programs and interest rates rise from historic lows. The European Central Bank has begun to scale back its asset purchasing program, although inflation is not yet sufficiently high for it to begin adjusting monetary policy. Meanwhile, Australia’s cash rate is likely to remain steady amid a continuing low level of inflation. The active management strategy is likely to deliver better returns than passive investing in the current environment,

CORPORATES
EUROPEAN CENTRAL BANK, PEOPLE’S BANK OF CHINA, ALTIUS ASSET MANAGEMENT PTY LTD

Bullish Neilson takes stock

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Original article by Cliona O’Dowd
The Australian – Page: 17 & 21 : 23-Feb-18

Platinum Asset Management has posted a 2017-18 interim profit of $A102.2m, which is seven per cent higher than previously, while revenue was up 15 per cent at $A185.9m. Meanwhile, Platinum’s co-founder and chief investment officer Andrew Clifford will succeed CEO Kerr Neilson in mid-2018. Neilson has downplayed his decision to step down, adding that he will still be actively involved in the company. He says retail investors should be cautious about investing in exchange-traded funds. He also suggests that while China’s economic growth is likely to slow, the nation’s economy will remain strong.

CORPORATES
PLATINUM ASSET MANAGEMENT LIMITED – ASX PTM

Burgeoning ETF industry brings active funds management to the masses

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Original article by David Rogers
The Australian – Page: 27 : 22-Feb-18

Exchange-traded funds are becoming increasingly popular with Australian investors. There has been strong growth in the number of listed active ETFs in particular since 2015, with 16 such funds now listed on the local sharemarket. BetaShares has launched two new active ETFs in a co-branding arrangement with Legg Mason, and BetaShares MD Alex Vynokur says this trend is likely to continue. He adds that institutional investors as well as retail investors are driving the demand for active ETFs.

CORPORATES
BETASHARES CAPITAL LIMITED, BETASHARES LEGG MASON EQUITY INCOME FUND (MANAGED FUND) – ASX EIN, BETASHARES LEGG MASON REAL INCOME FUND (MANAGED FUND) – ASX RIN, LEGG MASON ASSET MANAGEMENT AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED

ANZ ramps up home loan growth in mortgage race

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Original article by James Frost
The Australian Financial Review – Page: 19 : 21-Feb-18

The ANZ Bank has advised that its mortgage lending grew at a faster than the broader sector in the December 2017 quarter. However, the number of residential home loans that are in arrears increased from 0.59 per cent to 0.60 per cent quarter-on-quarter. ANZ’s quarterly statement on bank capital also shows that its customers continued to switch from interest-only loans principal-and-interest loans during the quarter, while its common equity tier one capital ratio rose from 10.57 per cent to 10.82 per cent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Health merger takes on majors

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Original article by Sarah-Jane Tasker
The Australian – Page: 17 & 20 : 20-Feb-18

Health insurance industry leaders forecast further consolidation in the sector after HCF and HBF revealed plans to merge. They are currently Australia’s two largest not-for-profit health funds, and the merged entity would boast $A4bn worth of assets, about 2.5 million members and a market share of around 18.4 per cent. HBF CEO John Van Der Wielen says the merged group would have a greater chance of ensuring that premium increases are kept in line with the inflation rate. He adds that both funds have had the industry’s lowest premium increases in 2018.

CORPORATES
THE HOSPITAL CONTRIBUTIONS FUND OF AUSTRALIA LIMITED, HBF HEALTH LIMITED, BUPA AUSTRALIA PTY LTD, MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF, AUSTRALIAN LABOR PARTY

Private equity ready to splash $7.7bn cash

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Original article by Scott Murdoch
The Australian – Page: 17 & 18 : 19-Feb-18

The Australian Private Equity & Venture Capital Association has reported that the industry raised $A3.35 billion in 2017. Local private equity funds invested $A3.38 billion in deals in 2017, while private equity and venture capital funds are estimated to have a $A7.7 billion "war chest" at their disposal. Vic­toria Allen of Minter Ellison says sectors that can expect to attract private equity and venture capital investment include healthcare, technology and disability services.

CORPORATES
AUSTRALIAN PRIVATE EQUITY AND VENTURE CAPITAL ASSOCIATION LIMITED, MINTER ELLISON, UBS HOLDINGS PTY LTD, KKR AND COMPANY LP, KOHLBERG KRAVIS ROBERTS AND COMPANY, VARDE PARTNERS INCORPORATED, I-MED/MIA NETWORK LIMITED, EQUITY TRUSTEES LIMITED – ASX EQT, PERMIRA ADVISERS LIMITED, LASER CLINICS AUSTRALIA PTY LTD, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, CLAYTON UTZ, FORT STREET CAPITAL PTY LTD, DEUTSCHE BANK AG, REDCAPE PROPERTY GROUP, MOELIS AND COMPANY, DIXON GROUP, VENTIA, APOLLO GROUP INCORPORATED, FITNESS AUSTRALIA, QUADRANT CAPITAL PTY LTD

A patient RBA risks playing catch-up later

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Original article by Patrick Commins
The Australian Financial Review – Page: 21 : 19-Feb-18

Westpac estimates that there is a 60 per cent chance that the Reserve Bank will increase official interest rates in 2018. There had been general consensus in financial markets early in 2018 that a rate rise before the end of the year was almost certain, but expectations have been dampened by factors such as market volatility and the latest inflation data. However, other major central banks are tightening monetary policy, prompting some experts to warn that the Reserve Bank may need to increase rates more aggressively at some stage.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, CITIGROUP PTY LTD

Brace for more volatility, warns ASX chief

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Original article by Glenda Korporaal
The Australian – Page: 21 : 16-Feb-18

Stock market operator ASX Limited has posted a 2018-17 interim net profit of $A230.5m, which is 5.1 per cent higher than previously. The half-year was characterised by a low level of market volatility, and ASX CEO Dominic Stevens says the volatility experienced so far in 2018 is likely to persist for 3-4 months. He adds that a certain amount of volatility can boost the earnings of stock exchange and futures market operators like the ASX, although he cautions that too much volatility can affect the IPO market.

CORPORATES
ASX LIMITED – ASX ASX

Rate rise likely as CPI starts to edge up

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Original article by Harriet Torry
The Australian – Page: 23 : 16-Feb-18

New figures show that the US has recorded its biggest monthly increase in inflation since March 2005. The larger-than-expected increase in January has increased the likelihood that the Federal Reserve will lift interest rates in March; the central bank considers an inflation rate of two per cent to be an indication of a healthy economy, but it does not want inflation to get much higher than that. Investors took the January inflation figures in their stride, with the Dow Jones closing up around one per cent. Originally published in "The Wall Street Journal".

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, WELLS FARGO AND COMPANY, PPG INDUSTRIES, WALT DISNEY COMPANY, AMAZON.COM INCORPORATED, SHERWIN-WILLIAMS

IAG profit jumps 24pc, as insurer mulls Asian exit

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Original article by Michael Roddan
The Australian – Page: 21 : 15-Feb-18

Insurance Australia Group has posted a 2017-18 interim net profit of $A551m, which is 24 per cent higher than previously. The insurer has written down the value of its Asian assets by $A50m, and indicated that it could potentially exit the region. Meanwhile, CEO Peter Harmer says the company took action to remedy problems with its "add-on" car insurance business well before the financial services commission commenced, and opted to withdraw from this sector of the market.

CORPORATES
INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SWANN INSURANCE (AUSTRALIA) PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NRMA LIMITED, CGU INSURANCE AUSTRALIA LIMITED, BERKSHIRE HATHAWAY INCORPORATED