K: Financial and Insurance Services

Sydney’s superstar house prices explained

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Original article by Vesna Poljak
The Australian Financial Review – Page: 13 : 23-Nov-17

Reserve Bank governor Philip Lowe says there are certain cities whose house prices increase a lot more than other cities in their countries. Lowe says this trend has been observed by his colleagues at other central banks, and the general consensus is that people are willing to pay higher prices for houses in some cities because of increased "economic or social returns" to be gained by living in them . Such places have been dubbed "superstar" cities, and Lowe says they include cities such as Sydney, Melbourne, Vancouver, Toronto, and San Francisco

CORPORATES
RESERVE BANK OF AUSTRALIA, ST GEORGE BANK LIMITED, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD

RBA governor Philip Lowe says banks needed push on interest-only lending

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Original article by Vesna Poljak
The Australian Financial Review – Page: Online : 22-Nov-17

Reserve Bank of Australia governor Philip Lowe says there is still a place for interest-only mortgage lending, but he believes the recent regulatory crackdown in this area has been a success. Speaking at the Australian Business Economists dinner on 21 November, Lowe said some banks had told him that they had welcomed the crackdown, which had prompted him to ask why they had not taken the initiative themselves and done something about it. Commenting on the prospects for the Australian economy, Lowe expects growth of above three per cent in both 2018 and 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUSINESS ECONOMISTS INCORPORATED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. COUNCIL OF FINANCIAL REGULATORS

NAB and ANZ promise to be up front with employees over looming job cuts

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 16-Nov-17

National Australia Bank expects voluntary redundancies and natural attrition to account for many of the 6,000 jobs it intends to shed over the next several years. CEO Andrew Thorburn has stressed the need for NAB to be completely open with staff regarding its cost-cutting strategy and the impact of technology on the sector. Kath Bray of the ANZ Bank has expressed a similar view, noting that staff have been fully informed of the kind of skills it requires in a downsized workforce. ANZ has shed more than 5,000 employees in the last two years.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NABAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZAUSTRALIAN BANKERS’ ASSOCIATION

Stalled wages hit rate rise outlook

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Original article by David Rogers
The Australian – Page: 19 & 29 : 16-Nov-17

The Australian dollar fell to a four-month low in local trading on 15 November, after the latest wage price index data prompted financial markets to reduce expectations of a rise in official interest rates in 2018. The data shows that wages growth was below forecasts at just 0.5 per cent in the September quarter, while annual growth in wages was two per cent. Tom ­Kennedy of JP Morgan notes that wages growth was expected to be higher in the quarter due to a 3.3 per cent increase in the minimum wage.

CORPORATES
JP MORGAN AUSTRALIA LIMITEDAUSTRALIAN BUREAU OF STATISTICSRESERVE BANK OF AUSTRALIANATIONAL AUSTRALIA BANK LIMITED – ASX NABAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZCAPITAL ECONOMICS LIMITEDWESTPAC BANKING CORPORATION – ASX WBCUNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH

Bank testing AI to monitor mood of staff and customers

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Original article by James Eyers
The Australian Financial Review – Page: 18 : 15-Nov-17

Artificial intelligence technology may be utilised by Westpac in a number of areas of its business, including the monitoring of employees’ performance and assessing the capacity of mortgage borrowers to repay their loans. The AI-based cameras are also being evaluated in terms of their ability to assess the mood of employees based on their facial expressions. Westpac is also developing AI-based applications in partnership with companies such as Onboard Informatics and Hyper Anna.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBCONBOARD INFORMATICSHYPER ANNAALIBABA GROUP HOLDING LIMITED

Don’t quit party early: Quinton sees more gains

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Original article by David Rogers
The Australian – Page: 24 : 15-Nov-17

The benchmark S&P/ASX 200 fell below 6,000 points on 14 November, following a gain of seven per cent over the last five weeks. Peter Quinton of Bell Financial Group believes that the S&P/ASX 200 is trading at fair value, which suggests that investors should continue to buy equities. He adds that the local bourse’s attractive earnings per share growth forecast and its grossed-up dividend yield also support the case for equities. Although Quinton’s "bear market checklist" suggests that a correction of 10 per cent is likely, it should not be any larger than this and will create more buying opportunities.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEXBELL FINANCIAL GROUP LIMITED – ASX BFGSTANDARD AND POOR’S 500 INDEXWOODSIDE PETROLEUM LIMITED – ASX WPLROYAL DUTCH SHELL PLC

Government must keep its hands off super: Keating

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Original article by Andrew White
The Australian – Page: 17 & 21 : 14-Nov-17

Former treasurer Peter Costello recently suggested that a government-run fund could be set up to look after default superannuation contributions. However, this idea does not have the support of former prime minister Paul Keating, who initiated compulsory superannuation. He says this would amount to a monopoly which the Liberal Party would want to eventually sell off to the private sector. The Productivity Commission is currently investigating the best way forward for determining how default super contributions should be allocated.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. FAIR WORK COMMISSION, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN LABOR PARTY

NAB traders didn’t read swap rate rules

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Original article by James Frost
The Australian Financial Review – Page: 18 : 14-Nov-17

Former National Australia Bank trader Brock Johnson has admitted that he was not aware of the rules governing the bank bill swap rate (BBSW). NAB, like the ANZ Bank, has settled with the Australian Securities & Investments Commission over allegations that they tried to rig the BBSW, but ASIC is still pursuing its case against Westpac over the matter. Johnson has told the Federal Court that he had not read the Australian Financial Markets Association’s rules concerning the BBSW.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN FINANCIAL MARKETS ASSOCIATION INCORPORATED

Signs of life in corporate investment: RBA

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Original article by David Rogers, James Glynn
The Australian – Page: 28 : 14-Nov-17

The Reserve Bank’s deputy governor Guy Debelle has told the UBS Australasia Conference that business investment outside of Australia’s mining sector has been stronger than official figures suggest in the last several years. He said the services sector in particular has recorded strong growth in capital investment, while there has also been an increase in public investment in infrastructure. Meanwhile, Debelle noted that a rise in the cash rate will be dependent on an increase in wages and inflation.

CORPORATES
RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

Shopping centres will survive peak Amazon

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Original article by Vesna Poljak
The Australian Financial Review – Page: 15 & 24 : 13-Nov-17

The Australian real estate investment trust sector has responded more proactively to the threat posed to retail trade by Amazon than many have given it credit for, according to Pete Davidson of BT Investment Management. REIT stocks currently favoured by BTIM include Westfield, Mirvac and Charter Hall, along with Arena and Folkestone, which both have interests in childcare centres. Other stocks that BTIM like include Precinct Properties and Vital Healthcare.

CORPORATES
AMAZON.COM INCORPORATED, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, WESTFIELD CORPORATION – ASX WFD, MIRVAC GROUP – ASX MGR, CHARTER HALL GROUP – ASX CHC, ARENA REIT – ASX ARF, FOLKESTONE LIMITED – ASX FLK, PRECINCT PROPERTIES, VITAL HEALTHCARE PROPERTY TRUST, MYER HOLDINGS LIMITED – ASX MYR, SCENTRE GROUP – ASX SCG, MITCHELL MONTAGU