K: Financial and Insurance Services

Chi-X accuses ASX of freezing the market

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Original article by Vesna Poljak, Jessica Sier
The Australian Financial Review – Page: 13 & 18 : 22-Sep-16

ASX Limited has been accused of mismanaging an outage which occurred on 19 September 2016. The exchange operator put the market in "enquire" mode, thus preventing stockbrokers from cancelling their open orders on the ASX and executing them at rival exchange Chi-X Australia. John Fildes, the CEO of Chi-X, said the ASX should have put the market in "adjust" mode, which is less restrictive.

CORPORATES
ASX LIMITED – ASX ASX, CHI-X AUSTRALIA PTY LTD, TABB GROUP INCORPORATED, AUSTRALIA. DEPT OF THE TREASURY

Why investors and economists differ on odds of rate call

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Original article by Jessica Sier
The Australian Financial Review – Page: 25 : 22-Sep-16

Financial markets consider that there is a near-even chance that the Reserve Bank of Australia will reduce the cash rate in the first half of 2017. In contrast, the general consensus of economists is that there will be at least one more rate cut in the current monetary policy easing cycle. JP Morgan economist Tom Kennedy expects the central bank to reduce the cash rate by another 50 basis points, while James Woods of Rivkin Securities suggests that there are limits to what monetary policy can achieve in terms of economic stimulus.

CORPORATES
RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, RIVKIN SECURITIES PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Two-thirds of funds beaten by the index

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 29 : 20-Sep-16

Data from Morningstar shows that 36.25 per cent of Australia’s actively-managed large-capitalisation funds matched or exceeded the return from the S&P/ASX 200 Accumulation Index in the year to 31 August 2016. This compares with 37.16 per cent over a three-year period, and 35.9 per cent over five years. In contrast, the five-year performance of US actively managed large-cap equity funds against the S&P 500 was just 9.5 per cent. Julian Beaumont of Bennelong Australian Equity Partners notes that Australia’s large-cap funds are more likely to engage in so-called index hugging.

CORPORATES
MORNINGSTAR PTY LTD, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, STANDARD AND POOR’S 500 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, STATE STREET GLOBAL ADVISORS LIMITED, STANDARD AND POOR’S ASX SMALL ORDINARIES ACCUMULATION INDEX, RAMSAY HEALTH CARE LIMITED – ASX RHC, PRIMARY HEALTH CARE LIMITED – ASX PRY, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

IT system fault floors ASX

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Original article by Jessica Sier
The Australian Financial Review – Page: 1 & 2 : 20-Sep-16

Stock exchange operator ASX Limited has indicated that an "internal hardware failure" rather than a cyber attack was responsible for technical problems that curtailed sharemarket trading on 19 September 2016. The market opened later than usual and closed early, with just $A169m worth of shares in the top 200 stocks changing hands. The ASX has stressed that the problems were not related to the issues that disrupted trading for four hours in 2011.

CORPORATES
ASX LIMITED – ASX ASX, CADENCE CAPITAL LIMITED – ASX CDT, CITIGROUP PTY LTD, PEAK ASSET MANAGEMENT PTY LTD, BLOCK EVENT, CREDIT SUISSE (AUSTRALIA) LIMITED, IG MARKETS LIMITED, CHI-X AUSTRALIA PTY LTD, RIVKIN SECURITIES PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF THE TREASURY

Padley ruffles feathers of the fund managers

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 20 : 19-Sep-16

Stockbroker Marcus Padley says the emergence of separately managed accounts represents a major change for the funds management industry. Padley is best known for the "Marcus Today" investment newsletter, which was launched in 1998. Marcus Today Investment Strategists has launched two SMAs, in which the client directly owns the shares. Padley favours IT stocks such as NextDC and Aconex, and healthcare stocks like Cochlear and Mayne Pharma.

CORPORATES
MARCUS TODAY INVESTMENT STRATEGISTS PTY LTD, BELL SECURITIES LIMITED, MORNINGSTAR PTY LTD, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, AITKEN INVESTMENT MANAGEMENT PTY LTD, NEXTDC LIMITED – ASX NXT, ACONEX LIMITED – ASX ACX, COCHLEAR LIMITED – ASX COH, MAYNE PHARMA GROUP LIMITED – ASX MYX, MEGAPORT LIMITED – ASX MP1, NANOSONICS LIMITED – ASX NAN, SPARK INFRASTRUCTURE GROUP – ASX SKI, VOCUS COMMUNICATIONS LIMITED – ASX VOC, CHORUS LIMITED – ASX CNU, SUPERLOOP LIMITED – ASX SLC, SPEEDCAST INTERNATIONAL LIMITED – ASX SDA, NETCOMM WIRELESS LIMITED – ASX NTC, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, CREDIT CORP GROUP LIMITED – ASX CCP, FLIGHT CENTRE TRAVEL GROUP LIMITED – ASX FLT, MACQUARIE GROUP LIMITED – ASX MQG, TELSTRA CORPORATION LIMITED – ASX TLS

Investors face nervous wait ahead of rate calls

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Original article by Patrick Commins
The Australian Financial Review – Page: 19 : 19-Sep-16

The upcoming monetary policy meetings of the US Federal Reserve and the Bank of Japan will be a focus for Australian investors in the week beginning 19 September 2016. Futures markets have priced in a 20 per cent chance that the Federal Reserve will increase the cash rate, and Paul Ashworth of Capital Economics says a rate rise in December is more likely. The minutes from the Reserve Bank of Australia will also be released, and Philip Lowe will appear before Parliament for the first time in his new role of RBA governor.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, RESERVE BANK OF NEW ZEALAND, STANDARD AND POOR’S ASX 200 INDEX, WESTPAC BANKING CORPORATION – ASX WBC, AMP CAPITAL INVESTORS LIMITED, EUROPEAN CENTRAL BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Rate cuts ‘hurt some but overall we gain’

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Original article by David Uren
The Australian – Page: 21 : 16-Sep-16

A report released by the Reserve Bank of Australia suggests that official interest rate cuts have a net gain for the nation overall, despite the impact on savers. The report argues that each $A1 reduction in home loan repayments results in an average increase of at least $A0.20 in expenditure on consumer durables. However, spending on durables rises by just $A0.04 on average for each $A1 increase in the interest income of net savers.

CORPORATES
RESERVE BANK OF AUSTRALIA

Formidable barriers mean Fed’s rate rise is no-go next week

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Original article by Karen Maley
The Australian Financial Review – Page: 28 : 16-Sep-16

Financial market traders have priced in a 15 per cent chance that the Federal Reserve will increase US interest rates in September 2016. Rates have increased just twice in the past when the odds of a rise have been 20 per cent or less. Unlike at present, inflation was a key issue on both occasions. Meanwhile, opinion is divided among Federal Reserve policymakers regarding the timing of a rate rise, while the central bank is unlikely to increase the cash rate prior to the presidential election in November.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, RESERVE BANK OF AUSTRALIA, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED

Global fundies not counting on a crash

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Original article by Vesna Poljak, Jonathan Shapiro
The Australian Financial Review – Page: 15 & 22 : 15-Sep-16

Investors have been warned to expect further volatility in equity markets until the US Federal Reserve resumes increasing interest rates. Many global fund managers anticipate that the central bank will begin tightening monetary policy soon, although they generally expect rates to rise gradually. The recent equities sell-down has boosted government bond yields, and there is growing concern that the bond market’s long bull run may be nearing its end.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, STANDARD AND POOR’S ASX 200 INDEX, MAGELLAN FINANCIAL GROUP LIMITED – ASX MFG, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, K2 ASSET MANAGEMENT HOLDINGS LIMITED – ASX KAM, PLATINUM ASSET MANAGEMENT LIMITED – ASX PTM

Banks test staff on cyber security

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 15-Sep-16

Australian banks are testing their staff’s readiness for cyber security threats by sending fake "phishing" emails to employees and monitoring their responses. Steve Glynn, the chief information security officer at the ANZ Bank, has told the Sinet61 summit in Sydney that the purpose of the exercise is to identify those who could expose the bank to cyber attacks.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ASX LIMITED – ASX ASX, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION