K: Financial and Insurance Services

Credit Suisse chief’s cautionary IPO tale

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 17 : 5-Jun-17

Some high-profile IPOs in Australia have been withdrawn in 2017, and Credit Suisse John Knox says the market needs some successful IPOs in order to boost float activity. He adds that private equity firms are unlikely to be behind the majority of IPOs in the near-term. Knox is upbeat about the outlook for mergers and acquisitions activity during the remainder of 2017, while he has welcomed a move by the Foreign Investment Review Board to provide greater clarity regarding offshore bidders.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, OFFICEWORKS SUPERSTORES PTY LTD, WESFARMERS LIMITED – ASX WES, ZIP INDUSTRIES AUSTRALIA, ALINTA ENERGY (AUSTRALIA) PTY LTD, CHOW TAI FOOK ENTERPRISES LIMITED, ICON GROUP, QIC LIMITED, GOLDMAN SACHS PRIVATE EQUITY, PAGODA INVESTMENTS, TPG CAPITAL LP, FAIRFAX MEDIA LIMITED – ASX FXJ, DEALOGIC (AUSTRALIA) PTY LTD, AMAZON.COM INCORPORATED

Slowdown is not a meltdown

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Original article by Jens Meyer
The Australian Financial Review – Page: 20 : 5-Jun-17

The Australian sharemarket fell 2.7 per cent during May 2017, compared with a 1.4 per cent gain for the S&P 500. The upcoming release of GDP data will be the next test for the market, with expectations that the economy expanded by 0.3 per cent during the March quarter and 1.6 per cent year-on-year. Weak consumer spending and doubts regarding the outlook for the housing market are key concerns for investors at present, although David Cassidy of UBS says fears about a housing market collapse are not warranted.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, UBS HOLDINGS PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MORGAN STANLEY AUSTRALIA LIMITED, NIKKEI 225 INDEX, AMAZON.COM INCORPORATED, MERRILL LYNCH (AUSTRALIA) PTY LTD, CITIGROUP PTY LTD, RESERVE BANK OF AUSTRALIA

Offshore bank investors fret over housing: Elliott

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Original article by James Eyers
The Australian Financial Review – Page: 8 : 2-Jun-17

ANZ Bank CEO Shayne Elliott says UK investors with stakes in Australian banks are worried that recent regulatory changes to housing policy in Australia may lead to a market correction. Elliott, who was speaking at a G100 conference in Sydney, also said that comments by Federal Treasurer Scott Morrison that Australia’s large banks are "an oligopoly" were unhelpful, noting that there are other sectors in Australia that are just as concentrated as banking.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY

Australia ‘must deal with quite spectacular housing bubble’

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Original article by David Rogers
The Australian – Page: 28 : 1-Jun-17

A sharp downturn in the residential property market and an economic slowdown in China are among the biggest risks to the Australian economy, according to Willem Buiter of Citigroup. The investment bank’s global chief economist warns that the Federal Government’s plans to invest $A75bn in infrastructure over 10 years will not be sufficient to offset the impact of a property market downturn. He says the Government must take action to ensure that the housing market has a soft landing.

CORPORATES
CITIGROUP INCORPORATED, THE GOLDMAN SACHS GROUP INCORPORATED, LONDON SCHOOL OF ECONOMICS, BANK OF ENGLAND, WORLD BANK, EUROPEAN COMMISSION, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CORELOGIC AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Bourse in $57bn wipe-out for May

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Original article by Chris Kohler
The Australian – Page: 28 : 1-Jun-17

The Australian sharemarket posted modest gains on 31 May 2017, with the S&P/ASX 200 adding 0.2 per cent to close at 5,724.6 points. National Australia Bank advanced 1.3 per cent to $A30.12 and Wesfarmers was up 1.1 per cent at $A42.70. However, Rio Tinto fell 0.7 per cent to $A62.81 and New Hope Corporation was down 11 per cent at $A1.62. The S&P/ASX 200 shed 3.4 per cent in May, and analysts note that the local market tends to underperform in June.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESFARMERS LIMITED – ASX WES, RIO TINTO LIMITED – ASX RIO, NEW HOPE CORPORATION LIMITED – ASX NHC, BHP BILLITON LIMITED – ASX BHP, NEW HOPE CORPORATION LIMITED – ASX NHC, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE GROUP LIMITED – ASX MQG, WOOLWORTHS LIMITED – ASX WOW, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, ARISTOCRAT LEISURE LIMITED – ASX ALL, AUTOMOTIVE HOLDINGS GROUP LIMITED – ASX AHG, SIRTEX MEDICAL LIMITED – ASX SRX, MYER HOLDINGS LIMITED – ASX MYR, SIGMA HEALTHCARE LIMITED – ASX SIG, QANTAS AIRWAYS LIMITED – ASX QAN, FAIRFAX MEDIA LIMITED – ASX FXJ, IG MARKETS LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Numbers look good, so where’s the euphoria?

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Original article by David Rogers
The Australian – Page: 28 : 31-May-17

Australian bank and resources stocks rallied on 30 May 2017, allowing the benchmark S&P/ASX 200 to finish in the black after reaching a three-month low early in the session. Meanwhile, Citigroup notes that investor sentiment is not sufficiently high that a market retreat is likely, despite key US indices being at or near record highs. However, the S&P/ASX 200 and the S&P 500 have tended to underperform in the month of June, shedding an average of 2.2 per cent and 1.5 per cent respectively over the last 10 years.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, CITIGROUP GLOBAL MARKETS INCORPORATED, DOW JONES INDUSTRIAL AVERAGE INDEX, NASDAQ COMPOSITE INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Sell in May: shares stay true to script

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Original article by David Rogers
The Australian – Page: 17 & 28 : 30-May-17

The S&P/ASX 200 has underperformed in the last month, reducing its gain so far in the 2016-17 financial year from 13.8 per cent to just 9.1 per cent. May 2017 is shaping up to be the worst month for the local bourse since January 2016, and the benchmark index is now well off the 6,000-point level that seemed within reach early in the month. Meanwhile, the uncertain economic outlook may weigh on investors in the near-term, with upcoming data expected to show GDP growth stalled in the March quarter.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, PERPETUAL INVESTMENTS, RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Fed expects to raise short-term rates soon

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Original article by Nick Timiraos
The Australian – Page: 30 : 26-May-17

Speculation that the US Federal Reserve will increase interest rates in June 2017 has gathered pace following the release of the minutes from its policy meeting for May. The minutes show that a majority of board members feel that the economic outlook may soon justify an increase in short-term interest rates. Futures traders now consider the chances of a rate rise in June to be about 80 per cent. Meanwhile, the central bank has issued a staff briefing which looks at options for reducing its balance sheet, which has risen to $US4.5trn as a result of quantitative easing.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX

China ratings cut hits markets

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Original article by Rowan Callick, Andrew White
The Australian – Page: 19 & 30 : 25-May-17

The Australian dollar fell sharply on 24 May 2017 in response to Moody’s Investors Service’s decision to downgrade China’s debt rating from "Aa3" to "A1". The Shanghai and Shenzhen sharemarkets also lost ground during intra-day trading. Moody’s has forecast that China’s economic growth potential will fall to around five per cent in the next five years, while it expects debt across the Chinese economy to continue to rise.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE TREASURY, STOCKBROKERS AND FINANCIAL ADVISERS ASSOCIATION LIMITED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, COMMUNIST PARTY (CHINA)

Expect more shareholder activism Down Under, warns Credit Suisse

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 19 : 23-May-17

Chris Young of Credit Suisse says it was inevitable that activist hedge funds would target Australian companies. He adds that the investment bank’s research suggests that BHP Billiton will not be the only Australian company to attract the interest of activists. Young says the best defence against activists is for a company to ensure that it has the support of key shareholders. He also notes that the relatively small size of the Australian market means activist funds may get less traction than in the much larger US market.

CORPORATES
CREDIT SUISSE AG, BHP BILLITON LIMITED – ASX BHP, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, ELLIOTT MANAGEMENT CORPORATION, SAMSUNG ELECTRONICS COMPANY LIMITED, CANADIAN PACIFIC LIMITED, PERSHING SQUARE CAPITAL MANAGEMENT LP