K: Financial and Insurance Services

Iron, coal rebound to lift rates

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Original article by David Rogers, Barry FitzGerald
The Australian – Page: 19 & 22 : 29-Nov-16

Coal and iron ore are currently trading at prices that are significantly above the forecasts made in the Australian Government’s May 2016 Budget. Based on current prices, the nation’s export earnings in 2016 will be about $A80bn higher than in 2015. Tim Toohey of Goldman Sachs says this should be sufficient to avert the risk of Australia’s credit rating being downgraded. Financial markets believe that there is also now a better-than-even chance of an increase in the cash rate by the end of 2017.

CORPORATES
GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN NATIONAL UNIVERSITY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, BLOOMBERG LP

Goldman upbeat on local M&A activity

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Original article by Carrie LaFrenz
The Australian Financial Review – Page: 16 : 28-Nov-16

Data from Dealogic shows that $US98.54bn ($A132.44bn) worth of mergers and acquisitions have been announced in Australia so far in 2016. Olivia Brown and Marissa Freund of Goldman Sachs are bullish about the outlook for M&A deals, and forecast strong activity in sectors such as healthcare, technology and retail. Freund expects strong interest in local companies from suitors in Asia, North America and Europe. Brown anticipates that Chinese companies will continue to be attracted to sectors that have export potential, such as consumer products and healthcare.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSGRID PTY LTD, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, TABCORP HOLDINGS LIMITED – ASX TAH, TATTS GROUP LIMITED – ASX TTS, BORAL LIMITED – ASX BLD, HEADWATERS INCORPORATED, OIL SEARCH LIMITED – ASX OSH, INTEROIL CORPORATION, PACIFIC BRANDS LIMITED, HANESBRANDS, UGL LIMITED – ASX UGL, CIMIC GROUP LIMITED – ASX CIM, KATHMANDU HOLDINGS LIMITED – ASX KMD, BRISCOE GROUP LIMITED, LAZARD ASSET MANAGEMENT LIMITED

Rally in local bank shares won’t last: CLSA

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Original article by David Rogers
The Australian – Page: 30 : 25-Nov-16

The share prices of Australia’s four major banks have risen by an average of nearly seven per cent since Donald Trump’s presidential election win. However, Brian Johnson of CLSA does not expect this to be sustained, noting that local and international banks are facing a number of headwinds. He adds that Australian bank stocks are expensive compared with their overseas peers, while their common-equity tier-one capital must be increased by some $A27bn.

CORPORATES
CLSA AUSTRALIA PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Get your next home loan by video session

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Original article by James Eyers
The Australian Financial Review – Page: 20 : 24-Nov-16

Hashching is conducting a pilot program for a biometric identity verification service which is to be used in processing mortgage applications. As the program complies with "know your client" banking regulations, it eliminates the need for the presence of the applicant in the bank branch. Hashching co-founder Mandeep Sodhi says he will meet with representatives of the banks to persuade them to make mortgage applications fully digital.

CORPORATES
HASHCHING PTY LTD, ISELECT LIMITED – ASX ISU, MICROSOFT CORPORATION, TYRO PAYMENTS

Trade out, quality in as blue chips re-emerge

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Original article by Jessica Sier
The Australian Financial Review – Page: 31 : 24-Nov-16

Australian-listed small-capitalisation stocks have outperformed the broader sharemarket over the last 18 months or so. However, this outperformance has been reversed in the last month, and particularly in the wake of Donald Trump’s presidential election win. There has been renewed support for bank and resources stocks, due to factors such as a rise in government bond yields and commodity prices.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, PERPETUAL INVESTMENTS, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED

Recovery looks set to stay the course for year

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Original article by David Rogers
The Australian – Page: 31 : 24-Nov-16

Australia’s S&P/ASX 200 has gained 8.6 per cent since Donald Trump won the US presidential election. The market has not staged a similar rally since December 2015, which followed a global equities sell-down prior to the rise in US interest rates. Financial markets have already priced in the next rise in US rates, so there would seem to be few factors that could potentially stall the domestic bourse’s recent rally.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, AMCOR LIMITED – ASX AMC, MACQUARIE GROUP LIMITED – ASX MQG, ARISTOCRAT LEISURE LIMITED – ASX ALL, INCITEC PIVOT LIMITED – ASX IPL, TELSTRA CORPORATION LIMITED – ASX TLS, SYDNEY AIRPORT – ASX SYD, RESERVE BANK OF AUSTRALIA

Volatility hits fund earnings

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Original article by Michael Roddan
The Australian – Page: 23 : 17-Nov-16

Data from Mercer shows that Australia’s median shares fund manager achieved a return of negative 3.1 per cent between August and October 2016. SuperRatings’ figures show that the median superannuation fund boasted a return of minus 0.7 per cent for the period, including a one per cent loss in October. Factors such as the outlook of inflation and uncertainty over the timing of a rate rise in the US weighed on financial markets in October.

CORPORATES
MERCER INVESTMENTS PTY LTD, SUPERRATINGS PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD

Shares to feel the jolt as ‘bondcano’ fires up

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Original article by David Rogers
The Australian – Page: 31 : 17-Nov-16

The yield on 10-year Australian government bonds has retreated from a high of 2.74 per cent in the wake of Donald Trump’s presidential election win. The so-called "bondcano" has seen the yield on 10-year bonds rise by 51 per cent since August 2016, and Credit Suisse estimates that the recent sell-off is the 13th biggest since 1970. Hasan Tevfik of Credit Suisse expects bond yields to keep rising over the long-term, and identifies stocks such as Sydney Airport, APA Group and Healthscope as those most at risk from higher yields.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, SYDNEY AIRPORT – ASX SYD, APA GROUP – ASX APA, HEALTHSCOPE LIMITED – ASX HSO, ASX LIMITED – ASX ASX, BWP TRUST – ASX BWP, TELSTRA CORPORATION LIMITED – ASX TLS, WESTFIELD CORPORATION – ASX WFD, SCENTRE GROUP – ASX SCG, TRANSURBAN GROUP LIMITED – ASX TCL, STANDARD AND POOR’S ASX 200 INDEX, CROWN RESORTS LIMITED – ASX CWN, AUSNET SERVICES LIMITED – ASX AST, VICINITY CENTRES – ASX VCX, CHARTER HALL GROUP – ASX CHC, QANTAS AIRWAYS LIMITED – ASX QAN, NUFARM LIMITED – ASX NUF, MYER HOLDINGS LIMITED – ASX MYR, FORTESCUE METALS GROUP LIMITED – ASX FMG, LEND LEASE GROUP LIMITED – ASX LLC

Private equity buyers focused on health, leisure, tech assets

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 16 : 14-Nov-16

A new report from law firm Minter Ellison notes that there has been an increase in deal-making activity by private equity firms. Sectors such as health, technology, leisure and child care are tipped to attract strong interest from buyout firms. However, Minter Ellison partner Glen Sauer says it is too soon to forecast the impact that Donald Trump’s presidency will have on the private equity sector’s investment in Australia.

CORPORATES
MINTER ELLISONJP MORGAN AUSTRALIA LIMITEDSAI GLOBAL LIMITED – ASX SAIBARING ASIA PRIVATE EQUITYGENESIS CARE PTY LTDMACQUARIE GROUP LIMITED – ASX MQGCHINA RESOURCES (HOLDINGS) LIMITEDKKR AND COMPANY LPCITIGROUP PTY LTDDEALOGIC (AUSTRALIA) PTY LTDDICK SMITH HOLDINGS LIMITEDSPOTLESS GROUP HOLDINGS LIMITED – ASX SPOESTIA HEALTH LIMITED – ASX EHEVITACO HOLDINGS LIMITED – ASX VITPATTIES FOODS LIMITEDSHANGHAI PHARMACEUTICAL HOLDING COMPANY LIMITEDPRIMAVERA CAPITAL GROUPPACIFIC EQUITY PARTNERS PTY LTD

Stocks bounce back, buoyed by Trump’s fiscal optimism

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Original article by Vesna Poljak
The Australian Financial Review – Page: 23 & 34 : 11-Nov-16

The Australian sharemarket posted its largest single-day gain in more than five years on 10 November 2016, while Wall Street defied expectations of a big fall after the election of Donald Trump, finishing in the black. The Australian dollar also rallied, while local and US 10-year bond yields rose. Financial markets have scaled back the odds of a reduction in Australia’s cash rate by mid-2017, while there has been a slight easing of expectations of a rate rise in the US in December 2016.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, NIKKEI 225 INDEX, HANG SENG INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, EURO STOXX 50 INDEX, PM CAPITAL LIMITED, RESERVE BANK OF NEW ZEALAND, UNITED STATES. FEDERAL RESERVE BOARD, QIC LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT