K: Financial and Insurance Services

Health premium rises tipped

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Original article by Sarah-Jane Tasker, Rachel Baxendale
The Australian – Page: 15 : 18-Jan-18

There is speculation that private health insurance premiums will rise by an average of four per cent in 2018. Macquarie Group analysts estimate that Medibank and NIB will increase their premiums by an average of 3.85 per cent and 3.8 per cent respectively. Macquarie has increased its share price targets for both insurers. Federal Health Minister Greg Hunt expects the lowest increase in health insurance premiums for 17 years. He will announce the premium increases in the next several weeks.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. DEPT OF HEALTH, AUSTRALIAN MEDICAL ASSOCIATION LIMITED

Bank probe a funding risk

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Original article by Tom McIlroy, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 4 : 16-Jan-18

Fitch Ratings says Australian banks may face an increase in wholesale funding costs if the Federal Government’s royal commission further erodes trust in the sector. The ratings agency notes that the Australian banking sector is particularly reliant on offshore funding. Meanwhile, royal commissioner Kenneth Hayne is expected to seek public submissions shortly, but Small Business & Family Enterprise Ombudsman Kate Carnell says the inquiry must avoid being swamped by submissions. Financial services providers must lodge 50-page reports with the commission by the end of January.

CORPORATES
FITCH RATINGS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, AUSTRALIAN BANKERS’ ASSOCIATION, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, HIGH COURT OF AUSTRALIA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Interest-only loans plummet as banks clamp down on mortgage risk

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Original article by Michael Roddan
The Australian – Page: 13 & 14 : 16-Jan-18

New data suggests that the Australian Prudential Regulation Authority’s crackdown on interest-only mortgage loans is having an impact. Australian Fin­ancial Group’s latest mortgage index shows that 19 per cent of new mortgage loans in the December 2017 quarter were interest-only loans, compared with 47 per cent for the corresponding period in 2016. However, the size of the average mortgage loan rose by 2.8 per cent nationwide in the year to November, and by 4.3 per cent in Victoria.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN FINANCE GROUP LIMITED – ASX AFG, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, DIGITAL FINANCE ANALYTICS, MOODY’S INVESTORS SERVICE INCORPORATED

Resurgent Aussie dollar heads back above US80c as commodity prices boom

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Original article by David Rogers
The Australian – Page: 13 & 18 : 16-Jan-18

The Australian dollar rose above $US0.79 in local trading on 15 January, and National Australia Bank estimates that the currency’s fair value in the near-term is $US0.80. Ray ­Attrill of NAB says the currency could reach its 2017 peak of $US0.8125 unless the US dollar rebounds, while Sean Callow of Westpac is also upbeat about the currency’s near-term outlook. Aside from US dollar weakness, the Australian dollar has benefited from a rally in the price of key commodities over the last month.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, IG MARKETS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD

US inflation stirs global rate rise bets

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 27 : 15-Jan-18

Thierry Albert Wizman of Macquarie Group notes that the Reserve Bank of Australia is the only major central bank among developed countries that has not flagged a rise in official interest rates. The Bank of Canada is widely tipped to tighten monetary policy again in mid-January, while the general consensus of economists is that US interest rates will rise in March. Meanwhile, New York Federal Reserve president William Dudley recently warned that factors such as the low unemployment rate in the US and the Trump administration’s tax cuts could potentially see the US economy "overheat".

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, FEDERAL RESERVE BANK OF NEW YORK, BANK OF CANADA, EUROPEAN CENTRAL BANK, BANK OF JAPAN, FIS GROUP, BANK OF AMERICA CORPORATION, CAPITAL ECONOMICS LIMITED, LEHMAN BROTHERS INCORPORATED, RBC CAPITAL MARKETS, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Industry funds set for swift growth

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Original article by Glenda Korporaal
The Australian – Page: 14 : 12-Jan-18

Australia’s industry superannuation funds now boast 6.8 million members, according to Roy Morgan’s Superannuation and Wealth Management report. In contrast, retail super funds have 3.9 million members. The report also shows that while the median age of all super fund members is 42.7 years, the median age of industry and retail fund members is 39.6 years and 45.7 years respectively. Meanwhile, the median balance of industry funds members is $A38,500, compared with the market average of $A57,800, although Roy Morgan attributes this to the lower median age of industry fund members.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Satisfaction with performance of industry superannuation funds back on top of retail funds

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Original article by Roy Morgan
Market Research Update – Page: Online : 12-Jan-18

Roy Morgan’s latest Superannuation Satisfaction Report shows that in November 2017, satisfaction with the financial performance of industry superannuation funds (59.2%) was higher than retail funds (57.5%) for the third consecutive month, after having trailed them for the seven months prior. Satisfaction with self-managed superannuation funds remained the overall leader with 71.9%, despite being down by 2.4% points over the last year. Across the fifteen largest super funds (based on number of members), Qsuper had the highest satisfaction with 70.0%, followed by Cbus (67.4%) and Unisuper (66.4%). The best performer among the largest retail funds was Colonial First State in sixth place overall with a satisfaction rating of 61.2%, followed by MLC (55.8%), BT (55.8%), OnePath (54.7%) and AMP (54.2%).

CORPORATES
ROY MORGAN LIMITED, QSUPER LIMITED, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, UNISUPER LIMITED, COLONIAL FIRST STATE GROUP LIMITED, MLC LIMITED, ONEPATH AUSTRALIA LIMITED, AMP LIMITED – ASX AMP

Stumble may be start of bigger global pullback

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Original article by David Rogers
The Australian – Page: 18 : 11-Jan-18

The S&P/ASX 200 recorded its largest fall in six weeks on 10 January, after posting strong gains over the last three months. Factors such as a rise in US 10-year bond yields to a 10-month high and a slight reduction in the Bank of Japan’s quantitative easing program weighed on the Australian market. Meanwhile, tax-loss selling is a major risk for the US market in January, as the Trump Administration’s capital gains tax reforms now allow US investors to defer tax liabilities until April 2019.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BANK OF JAPAN, STANDARD AND POOR’S 500 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, BELL POTTER SECURITIES LIMITED, JP MORGAN AUSTRALIA LIMITED, WOODSIDE PETROLEUM LIMITED – ASX WPL, ORIGIN ENERGY LIMITED – ASX ORG, BHP BILLITON LIMITED – ASX BHP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

PayPal faces boycott over lack of services in Palestine

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Original article by Andrew Tillett
The Australian Financial Review – Page: Online : 3-Jan-18

The Australian Palestinian Advocacy Network (APAN) has urged Australians to boycott online payments provider Paypal. It accuses Paypal of engaging in "online apartheid" by providing its services to Israelis but not to Palestinians living in Gaza and the West Bank, even though they use the same currency, the Israeli shekel. PayPal states its lack of service to Palestine is not politically motivated, but that there are certain compliance and regulatory issues that need to be addressed before it can provide its service to Palestinians.

CORPORATES
AUSTRALIAN PALESTINIAN ADVOCACY NETWORK, PAYPAL INCORPORATED, ACTION AID

Big banks to slash 20,000 jobs

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Original article by James Frost
The Australian Financial Review – Page: 1 & 4 : 3-Jan-18

Australia’s big four banks reduced their full-time employee numbers by just under 1,500 in 2017. However, banking analysts suggest that Westpac, the National Australia Bank, the ANZ Bank, and the Commonwealth Bank will be a lot more active in 2018 in terms of job shedding, with an overall reduction of 20,000 full-time employees seen as likely. Victor German from Macquarie says he had thought the big four might have been a bit more active in 2017 in terms of job cuts, while he urged them not to rely on natural attrition to get employee numbers down.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MACQUARIE GROUP LIMITED – ASX MQG, CLSA AUSTRALIA PTY LTD, KPMG AUSTRALIA PTY LTD, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, COMMINSURE