K: Financial and Insurance Services

Fund managers to Fed: it’s time to raise rates

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Original article by Vesna Poljak
The Australian Financial Review – Page: 13 & 27 : 14-Sep-16

Financial markets have priced in a 22 per cent chance that the US Federal Reserve will increase interest rates in September 2016, while a December increase is rated a 57 per cent chance. PM Capital’s Uday Cheruvu expects the US central bank to tighten monetary policy at some point, noting that there are sufficient grounds for a rate rise. Meanwhile, Randal Jenneke of T. Rowe Price says Australian yield stocks – which bore the brunt of bearish sentiment on 12 September – are likely to fall further.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, PM CAPITAL LIMITED, T ROWE PRICE GROUP INCORPORATED, STANDARD AND POOR’S ASX 200 INDEX, EUROPEAN CENTRAL BANK, BANK OF JAPAN, BANK OF ENGLAND

Narev seeks spirit of ’91 reform

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 14-Sep-16

Commonwealth Bank of Australia CEO Ian Narev has used the 25th anniversary of the banking major’s sharemarket float to call for reforms that will promote long-term economic growth. He says the government of the day made the right decision in selling a publicly-owned bank. CBA shares have fallen by more than 10 per cent in recent weeks, with the stock closing at $A69.50 on 13 September 2016. However, investors paid just $A5.40 per share in the 1991 float.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BELL POTTER SECURITIES LIMITED

Correction fears as bears claw back hopes of rally

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Original article by Chris Kohler, Daniel Palmer
The Australian – Page: 19 & 28 : 14-Sep-16

The Australian sharemarket posted further losses on 13 September 2016, after initially rebounding from the sharp fall in the previous trading session. However, US markets rallied after Federal Reserve official Lael Brainard said the central bank should adopt a cautious approach to tightening monetary policy. The Australian market has shed about six per cent in the last three weeks, and Lucinda Chan of Macquarie Private Wealth says further profit-taking is likely.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, MACQUARIE PRIVATE WEALTH MANAGEMENT PTY LTD, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, NASDAQ COMPOSITE INDEX, WOOLWORTHS LIMITED – ASX WOW, MYER HOLDINGS LIMITED – ASX MYR, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, TELSTRA CORPORATION LIMITED – ASX TLS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Why Commonwealth is still the investors’ favourite, 25 years on

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Original article by James Frost
The Australian Financial Review – Page: 18 : 13-Sep-16

The first tranche of Commonwealth Bank shares were issued at $A5.40 apiece in September 1991. Investors who took up the minimum of 400 shares in the float and reinvested their dividends over the following 25 years would now hold $A131,371 worth of shares in Australia’s largest bank. Financial market observers note that the first stage of the Commonwealth Bank privatisation was popular with investors, despite the challenging economic conditions at the time.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, MORGANS FINANCIAL LIMITED, MONTGOMERY INVESTMENT MANAGEMENT PTY LTD, EVANS AND PARTNERS PTY LTD, LINCOLN INDICATORS PTY LTD, PYRAMID BUILDING SOCIETY

Central bank fears spook markets

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Original article by Jacob Greber, Sally Rose, Jessica Sier
The Australian Financial Review – Page: 1 & 6 : 12-Sep-16

Australia’s S&P/ASX 200 Index has shed 4.4 per cent since the start of August 2016, and a 2.5 per cent downturn in the S&P 500 is expected to push the local market lower on 12 September. The US market was sold down after a Federal Reserve official suggested that the strength of the US economy could warrant an interest rate cut in the near-term. This prompted renewed support for the US dollar and a sharp rise in bond yields. Meanwhile, Nick Bishop of Aberdeen Asset Management expects an upturn in global financial market volatility in the December quarter.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, ABERDEEN ASSET MANAGEMENT LIMITED, CITIGROUP PTY LTD, UBS GLOBAL ASSET MANAGEMENT (AUSTRALIA) LIMITED, EUROPEAN CENTRAL BANK, RESERVE BANK OF AUSTRALIA

Ombudsman wary of tribunal

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Original article by Sally Rose
The Australian Financial Review – Page: 21 : 9-Sep-16

The Financial Ombudsman Service’s chief ombudsman Shane Tregillis has spoken against a proposal to set up a new banking tribunal. He believes that such a tribunal would make the dispute resolution system more adversarial and legalistic. Tregillis has suggested that the proposal should be examined by the independent panel led by Ian Ramsay which will conduct a review of the financial services sector’s dispute resolution and complaints system.

CORPORATES
FINANCIAL OMBUDSMAN SERVICE LIMITED, CREDIT AND INVESTMENTS OMBUDSMAN, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. SUPERANNUATION COMPLAINTS TRIBUNAL, FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED, AUSTRALIAN BANKERS’ ASSOCIATION

Supervision the best defence, urges RBA

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 9-Sep-16

Philip Lowe says that thorough supervision of banks is the best way to safeguard against a financial crisis, and he argues that regulatory reforms alone are insufficient. Lowe will shortly succeed Glenn Stevens as Reserve Bank of Australia governor. The banking sector has been subject to greater scrutiny by the Australian Prudential Regulation Authority in recent years, while they are expected to face further regulatory requirements when the so-called Basel IV reforms are finalised by the Basel Committee on Banking Supervision.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, KPMG AUSTRALIA PTY LTD, GROUP OF TWENTY (G-20), UBS HOLDINGS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Westpac refunds $20m over credit card transaction fees

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Original article by Clancy Yeates
The Age – Page: 21 : 9-Sep-16

Some 820,000 credit card customers of Westpac will be reimbursed after being charged foreign transaction fees on purchases via offshore merchants that were made in Australian dollars. The banking major has issued about $A20m worth of refunds after the Australian Securities & Investments Commission found that it had neglected to inform customers that such transactions would attract a so-called "foreign transaction fee". Westpac has also updated its terms and conditions.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Shareholders to reap $24b in dividends

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Original article by Patrick Commins
The Australian Financial Review – Page: 31 : 9-Sep-16

CommSec’s Craig James estimates that shareholders of Australian-listed companies will receive $A16.3bn worth of dividend payments in the three weeks from mid-September 2016. The total payout in the wake of the August reporting season is expected to top $A24bn. Fortescue Metals Group is among the companies that have significantly increased their payout, although rivals BHP Billiton and Rio Tinto have slashed their dividends.

CORPORATES
COMMONWEALTH SECURITIES LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT

Zero rates eould smash the banks

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 8-Sep-16

A decline in the cash rate to zero would have a negative impact on returns from Australian banking stocks. Credit Suisse analysts Jarrod Martin and James Ellis have calculated that such a scenario would trigger a fall in earnings of the major banks by an average of nine per cent or $A2.7 billion in total. Consequently, the banks would have to respond to a fall in return on equity by reducing their dividend payout ratios.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ