K: Financial and Insurance Services

Amazon effect puts IPOs under a cloud

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 : 16-May-17

The pending arrival of Amazon in Australia, along with reduced consumer spending, has made it less likely that three proposed IPOs in the retail sector will proceed. The IPOs in question are Retail Apparel Group, Quick Service Restaurant Holdings and Officeworks, with their combined value being put at $A2.4 billion. The lead managers behind Officeworks, which is a unit of Wesfarmers, have valued its IPO at between $A1.124 billion and $A1.5 billion, but the consensus of fund managers is that $A1.2 billion is as much as they would be willing to pay.

CORPORATES
AMAZON.COM INCORPORATED, RETAIL APPAREL GROUP PTY LTD, QUICK SERVICE RESTAURANTS HOLDINGS PTY LTD, OFFICEWORKS SUPERSTORES PTY LTD, WESFARMERS LIMITED – ASX WES, ARCHER CAPITAL PTY LTD, NAVIS CAPITAL PARTNERS LIMITED, YARRA CAPITAL GROUP PTY LTD, ARNHEM INVESTMENT MANAGEMENT PTY LTD, MACQUARIE CAPITAL PTY LTD, JP MORGAN AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, BINGO INDUSTRIES LIMITED – ASX BIN, ZIP INDUSTRIES AUSTRALIA, TAROCASH PTY LTD, YD PTY LTD, JOHNNY BIGG, CONNOR

Westpac eyes business lending to fill the gap

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Original article by James Eyers, James Frost
The Australian Financial Review – Page: 11 & 15 : 9-May-17

Westpac issued its 2016-17 interim financial results on 8 May 2017, recording a cash profit of $A4.02 billion, up three per cent on the previous corresponding period. Business credit and housing credit grew by 3.4 per cent and 6.5 per cent respectively, while cash earnings from its business bank increased by one per cent. Cash earnings from its BT Financial wealth unit declined by 11 per cent, while its interim dividend remained unchanged.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BT FINANCIAL GROUP PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD

NAB downplays ‘inevitable’ AAA rating loss

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Original article by Michael Roddan
The Australian – Page: 23 : 5-May-17

National Australia Bank has conceded that the loss of Australia’s coveted triple-A credit rating would result in a corresponding downgrade of the bank’s credit rating. However, group treasurer Shaun Dooley says this would have no impact on the bank’s domestic funding costs, while the cost of international funding would rise by about 10 basis points. Dooley adds that international investors have indicated that they would continue to invest in Australian banks if the nation’s credit rating were downgraded.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S FINANCIAL SERVICES LLC, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, DELOITTE ACCESS ECONOMICS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

Bumps in the road: no straightforward path to 6000

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Original article by David Rogers
The Australian – Page: 31 : 5-May-17

The S&P/ASX 200 Index retreated below the 5,900-point level on 4 May 2017, after closing within sight of 6,000 points earlier in the week. The consensus of market analysts is that it will rise to around 6,000 in the next year, while Bloomberg’s consensus target has been increased to 6,026.8 points. However, the local sharemarket faces a number of headwinds, including the prospect of interest rate rises in both Australia and the US at some point, while Tim Baker of Deutsche Bank anticipates an eventual correction of five per cent of more.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BLOOMBERG LP, DEUTSCHE BANK AG, CITIGROUP PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, FORTESCUE METALS GROUP LIMITED – ASX FMG, UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED – ASX GMA, CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, PACT GROUP HOLDINGS LIMITED – ASX PGH, COCA-COLA AMATIL LIMITED – ASX CCL, VOCUS GROUP LIMITED – ASX VOC, THE STAR ENTERTAINMENT GROUP LIMITED – ASX SGR, AGL ENERGY LIMITED – ASX AGL, APA GROUP – ASX APA, SUNCORP GROUP LIMITED – ASX SUN, WOOLWORTHS LIMITED – ASX WOW, CREDIT SUISSE (AUSTRALIA) LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ECLIPX GROUP LIMITED – ASX ECX, LEND LEASE GROUP LIMITED – ASX LLC, GRAINCORP LIMITED – ASX GNC

LVR loans aren’t bad: Genworth

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Original article by Alice Uribe
The Australian Financial Review – Page: 18 : 4-May-17

Genworth Mortgage Insurance Australia has posted a statutory net profit of $A52.2m for the March 2017 quarter, down from $A67.3m for the same period in 2016. Meanwhile, CEO Georgette Nicholas notes that mortgages with high loan-to-value ratios can be appropriate, provided there is sufficient oversight. Nicholas adds that loans with high LVRs are often essential for first-home buyers, and she warns that a crackdown on such loans may prompt people to seek higher-risk loans.

CORPORATES
GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED – ASX GMA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

PE floats sag in 2016, but not over 3 years

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 19 : 4-May-17

Rothschild and the Australian Private Equity & Venture Capital Association have produced a report which shows that IPOs backed by private equity firms underperformed the broader IPO market in 2016. The former delivered an average share price gain of 2.8 per cent, compared with a gain of 10.5 per cent for other floats. However, there were just five private equity-backed IPOs in Australian during the calendar year, and analysis shows that such IPOs have outperformed since 2013.

CORPORATES
NM ROTHSCHILD AUSTRALIA HOLDINGS PTY LTD, AUSTRALIAN PRIVATE EQUITY AND VENTURE CAPITAL ASSOCIATION LIMITED, ZIP INDUSTRIES AUSTRALIA, QUADRANT PRIVATE EQUITY PTY LTD, QUICK SERVICE RESTAURANTS HOLDINGS PTY LTD, OFFICEWORKS SUPERSTORES PTY LTD, WESFARMERS LIMITED – ASX WES, BINGO INDUSTRIES LIMITED – ASX BIN, TEGEL GROUP HOLDINGS LIMITED – ASX TGH, INGHAMS GROUP LIMITED – ASX ING, SCOTTISH PACIFIC GROUP LIMITED – ASX SCO, BRAVURA SOLUTIONS LIMITED.- ASX BVS, GTN LIMITED – ASX GTN, STANDARD AND POOR’S ASX SMALL INDUSTRIALS INDEX, SPOTLESS GROUP HOLDINGS LIMITED – ASX SPO, CYAN INVESTMENT MANAGEMENT PTY LTD, REGAL FUNDS MANAGEMENT PTY LTD, ALINTA ENERGY (AUSTRALIA) PTY LTD, ACCOLADE WINES LIMITED

Senate inquiry blasts ATO on unpaid super

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Original article by Michael Roddan
The Australian – Page: 23 : 3-May-17

It is estimated that about three million Australian workers do not receive their compulsory superannuation contributions, which equates to around $A6bn per year. A Senate economics committee inquiry has recommended that the Australian Taxation Office should adopt a more proactive approach to non-compliance with the super guarantee regime. The ATO’s focus at present is on a self-reporting system for employers who fail to pay some or all of the guarantee.

CORPORATES
AUSTRALIA. SENATE STANDING COMMITTEE ON ECONOMICS, AUSTRALIAN TAXATION OFFICE, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF FINANCE, INDUSTRY SUPER AUSTRALIA PTY LTD

ANZ shares pummelled by ‘lower for longer’ outlook

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Original article by Richard Gluyas
The Australian – Page: 19 & 23 : 3-May-17

The ANZ Bank has posted a 2016-17 interim cash profit of $A3.4bn, which is 23 per cent higher than previously. However, most analysts had expected a half-year profit of between $A3.5bn and $A3.8bn. CEO Shayne Elliott is confident that ANZ can outperform its rivals in terms of profit growth, but he says the low-growth environment means it no longer expects revenue growth to outpace that of rival banks. Shareholders will receive an interim dividend of $A0.80 per share.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE RESEARCH EQUITIES, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA

Upbeat RBA signals end to cuts

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Original article by David Rogers
The Australian – Page: 27 : 3-May-17

The Reserve Bank of Australia’s decision to leave official interest rates unchanged on 2 May was widely expected. However, an upbeat outlook for the domestic and global economies has prompted speculation that there will be no more rate cuts in the current monetary policy cycle. RBA governor Philip Lowe noted that the resource sector’s exports are rising while higher commodity prices are resulting in an increase in national income.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STANDARD AND POOR’S ASX 200 INDEX

Rate hikes deferred by slow US growth

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Original article by Myriam Robin
The Australian Financial Review – Page: 20 : 1-May-17

The Federal Reserve is tipped to leave interest rates on hold in May 2017, in the wake of GDP data showing that US economic growth slowed to a three-year low of 0.7 per cent in the March quarter. Some 70 per cent of futures traders expect the Federal Reserve to tighten monetary policy in June. The Reserve Bank of Australia is also expected to leave rates on hold in May, and Paul Brennan of Citigroup says the central bank’s revised quarterly forecasts are unlikely to be unduly affected by data showing that inflation is within its target range.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, THINKMARKETS, REUTERS HOLDINGS PLC, SOCIETE GENERALE SA