K: Financial and Insurance Services

Institutional investors buy back into rally

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Original article by David Rogers
The Australian – Page: 27 : 31-Oct-17

Australia’s S&P/ASX 200 index has gained 4.3 per cent so far in October, putting the local bourse on track for its best month since July 2016. Tony Brennan of Citigroup still expects the benchmark index to reach the 6,000-point level by the end of 2017. However, the market may face a number of headwinds. The S&P/ASX 200 Bank Index has risen by 3.5 per cent in October, but November is traditionally a bearish month for the sector. On the other hand, the resources sector is benefiting from the continued strength of commodity prices, while the growing prospect of tax cuts in the US should boost the earnings of companies with significant exposure to the US.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 BANKS INDEX

Westpac takes BBSW case down to the wire

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Original article by Sally Patten, Jonathan Shapiro
The Australian Financial Review – Page: 4 : 30-Oct-17

National Australia Bank has joined the ANZ Bank in reaching a settlement with the Australian Securities & Investments Commission over rate-rigging allegations. The NAB is understood to have agreed to make a total payment of $A50 million, of which $A10 million would be seen as a penalty and $A20 million would go towards ASIC’s legal costs. The remaining $A20 million would be donated to a consumer protection fund. Westpac, the third bank involved in the bank bill swap rate case, is believed to be still considering whether it should challenge ASIC’s allegations in court.

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

Citi predicts end of credit cards

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Original article by Karen Maley
The Australian Financial Review – Page: 1 & 4 : 30-Oct-17

Michael Corbat, the CEO of US bank Citigroup, forecasts that it will not be too long before digital payments and the like replace credit cards. Given that Citigroup is the largest issuer of credit cards in the world, it is important that it is well-positioned to be part of whatever replaces them. Asked whether he supports plans by the Trump administration to scale back some of the laws introduced in the wake of the global financial crisis, Corbat says it is the way the laws are administered that needs to change rather than the laws themselves.

CORPORATES
CITIGROUP INCORPORATED, SALOMON BROTHERS INCORPORATED, TRAVELLERS GROUP INCORPORATED

Size, target returns matter most for funds

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Original article by Sally Patten
The Australian Financial Review – Page: 19 : 30-Oct-17

Frontier Advisors has looked at four factors that are likely to determine a superannuation fund’s performance and compared to them to rates of returns over three years. The factors in question were fund size, fees, targeted return and level of risk taken. It concluded that funds that met the following criteria were most likely to achieve the best returns; they had assets of more than $A10 billion, charged mid-range fees and took mid-range risks, but aimed for higher target returns.

CORPORATES
FRONTIER ADVISORS PTY LTD

Watchdog backflips on super disclosure

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Original article by Michael Roddan
The Australian – Page: 22 : 27-Oct-17

The Australian Securities & Investments Commission has delayed the introduction of parts of its new fee disclosure rules for superannuation funds. ASIC has concluded that more work needs to be done on two elements of the rules, namely the treatment of investment platforms, and costs in relation to property investments. ASIC chairman Greg Medcraft said the rules as they had been originally proposed could have led to inconsistent treatment of asset classes, resulting in a less than "level playing field".

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, INDUSTRY SUPER AUSTRALIA PTY LTD, AMP LIMITED – ASX AMP

Elliott wary as ANZ profit surges 18pc

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Original article by Michael Roddan
The Australian – Page: 19 & 22 : 27-Oct-17

The ANZ Bank has posted a 2016-17 cash profit of $A6.9bn, which is 18 per cent higher than previously. Revenue was one per cent lower, and CEO Shayne Elliott notes that strong competition in the banking sector is making it harder to achieve revenue growth. He adds that ANZ will continue to closely monitor its mortgage book, given the rising levels of household debt and low growth in wages. Shareholders will receive a final dividend of $A0.80 share, and a full-year payout of $A1.60.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, IOOF HOLDINGS LIMITED – ASX IFL, UBS HOLDINGS PTY LTD, DIGITAL FINANCE ANALYTICS, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

QBE makes first insurtech play

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Original article by Alice Uribe
The Australian Financial Review – Page: 20 : 27-Oct-17

QBE Insurance Group has invested in US artificial intelligence firm RiskGenius, with QBE executive Bob James saying it will help the insurer to develop new products more rapidly. The investment in RiskGenius is the first to be made via QBE’s $US50 million ($A64.85 million) "insurtech" fund. QBE CEO John Neal said at the time of the fund’s launch in March that its investments would focus on data analytics.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, RISKGENIUS, CB INSIGHTS

The most common question on Wall Street: when will rally end?

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Original article by Philip Baker
The Australian Financial Review – Page: 31 : 27-Oct-17

Australia’s benchmark S&P/ASX 200 Index has gained four per cent so far in 2017, and it has not ended a month in positive territory since April. Meanwhile, the major US indices have finished in the black every month except for March, and the S&P 500 has gained nearly 15 per cent in the year to date. Wall Street’s sustained rally has prompted speculation as to when it will end, but there are strong indications that the current bull run will extend beyond seven months.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, NASDAQ COMPOSITE INDEX, CLIME INVESTMENT MANAGEMENT LIMITED – ASX CIW, CITIGROUP INCORPORATED, EPFR GLOBAL

RBA held up by flagging inflation

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 2 : 26-Oct-17

Official data shows that growth in Australia’s headline consumer prices was below expectations at just 0.6 per cent in the September quarter, for an annual inflation rate of 1.8 per cent. Growth in the core inflation rate slowed to 0.3-0.4 per cent, compared with 0.5 per cent in the June quarter. The data has dampened expectations that the Reserve Bank will increase the cash rate in the near-term, with financial markets now pricing in a 36 per cent chance of a rate rise by May.

CORPORATES
RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, COLES SUPERMARKETS AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, GOLDMAN SACHS AUSTRALIA PTY LTD, NOMURA AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY

CBA remains satisfaction leader among Australia’s major four banks

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 25-Oct-17

A Roy Morgan Single Source survey has found that customer satisfaction with the Commonwealth Bank of Australia was 79.9% in the six months to September 2017, and despite a decline of 0.3% points from August, it has remained the satisfaction leader among the four major banks since July 2015. Satisfaction with banks overall has declined from 81.7% to 80.8% over the last 12 months. The four major banks in total have declined by 1.0% points to 78.8%, the mutual banks have declined by 0.6% points to 90.0% and the foreign banks are down 0.6% points to 83.1%. Despite these declines, overall bank satisfaction remains well above the long-term average of 73.9% established since 2001. Meanwhile, the mortgage customers of each of the four major banks continue to be a drag on their overall satisfaction, despite historically low home-loan rates. Over the last 12 months, satisfaction among the big four’s home-loan customers has fallen by 0.2% to 75.7%, leaving it well below the satisfaction of non-mortgage customers with 79.6%.

CORPORATES
ROY MORGAN RESEARCH LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ