K: Financial and Insurance Services

OPEC deal sparks energy stocks rally

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Original article by Jessica Sier, Jens Meyer
The Australian Financial Review – Page: 30 : 30-Sep-16

The S&P/ASX 200 index rose one per cent to 5,471.3 points on 29 September 2016. Energy stocks performed strongly following a decision of OPEC members to reduce production in the coming months. The energy sector closed 6.3 per cent higher, with Beach Energy gaining 10 per cent and Santos, Origin and Woodside all climbing more than seven per cent.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, BEACH ENERGY LIMITED – ASX BPT, SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, WOODSIDE PETROLEUM LIMITED – ASX WPL, FORTESCUE METALS GROUP LIMITED – ASX FMG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, LYNAS CORPORATION LIMITED – ASX LYC, SPARK INFRASTRUCTURE GROUP – ASX SKI, MIGME LIMITED – ASX MIG, SOSV, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD

NAB pays out $6.5m for poor advice

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Original article by Michael Roddan
The Australian – Page: 23 : 29-Sep-16

National Australia Bank has revealed that it paid $A6.5 million in compensation to customers who received poor financial advice over the past 18 months. NAB’s head of consumer banking and wealth management, Andrew Hagger, said a significant investment had been made in the bank’s complaints resolution system. The Commonwealth Bank has stated that a third of its compensation scheme was completed in June 2016.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Shareholders blast CBA CEO’s diversity bonus

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Original article by Patrick Durkin, Matthew Cranston
The Australian Financial Review – Page: 6 : 27-Sep-16

The Commonwealth Bank of Australia has been criticised for adding new targets to its bonus plan. The Australian Shareholders’ Association is concerned that CBA executives will now be rewarded for meeting targets that are unrelated to performance, following the introduction of a 25 per cent target for "diversity, inclusion, sustainability and culture". The bank’s existing 25 per cent bonus for "customer satisfaction" is also controversial. CEO Ian Narev’s remuneration for 2015-16 comprised a base salary of $A8.77 million and performance-linked bonuses of $A3.53 million.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, AGL ENERGY LIMITED – ASX AGL, TELSTRA CORPORATION LIMITED – ASX TLS, WOOLWORTHS LIMITED – ASX WOW, INVESTA OFFICE FUND – ASX IOF, ISS – INTERNATIONAL SERVICE SOLUTIONS A/S

Bull market in bonds not over just yet: Citi

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Original article by Chris Kohler
The Australian – Page: 32 : 27-Sep-16

The yield on Australian 10-year government bonds peaked at 2.13 per cent on 21 September 2016, but it has since retreated to below the two per cent level. Citigroup does not believe that the recent spike in bond yields will signal the end of the three-decade bull market, and the firm does not expect the rise in yields to be sustained. Citigroup notes that financial stock are among those that should benefit from higher bond yields, while it says Australian stocks that are vulnerable include real estate investment trusts and utilities.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, APA GROUP – ASX APA, SYDNEY AIRPORT – ASX SYD, TATTS GROUP LIMITED – ASX TTS, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, HEALTHSCOPE LIMITED – ASX HSO, QANTAS AIRWAYS LIMITED – ASX QAN, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, CALTEX AUSTRALIA LIMITED – ASX CTX, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN, EUROPEAN CENTRAL BANK

Investors warned not to expect smooth ride

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 23-Sep-16

Australian equity strategists are cautious about the near-term outlook for the domestic bourse, with most still expecting the S&P/ASX 200 to be trading at around the 5,500-point level at the end of 2016. Meanwhile, Tony Brennan of Citigroup forecasts that the benchmark index will top 5,750 points by mid-2017. With the US Federal Reserve opting to leave interest rates on hold in September, David Cassidy of UBS says the presidential election could influence the timing of the next interest rate move.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

Review may force funds to merge

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Original article by Michael Roddan
The Australian – Page: 23 : 22-Sep-16

Superannuation industry experts suggest that any move to introduce alternatives to the default super fund system could result in more consolidation in the sector. Potential options that have been canvassed by the Productivity Commission in an issues paper include a tender system for default funds. Financial Services Council CEO Sally Loane notes that smaller funds with high fees may be forced to merge if the default super regime is opened to more competition.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, FINANCIAL SERVICES COUNCIL, AUSTRALIAN INSTITUTE OF SUPERANNUATION TRUSTEES, RICE WARNER ACTUARIES PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Old lenders losing battle for hearts and minds

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Original article by Michael Bennet
The Australian – Page: 23 : 22-Sep-16

The 2016 global consumer banking survey of professional services firm Ernst & Young shows that just 21 per cent of Australians completely trust that they will receive unbiased advice from their bank. The survey also found that 36 per cent of bank customers have complete trust in their financial institution, compared with 44 per cent of non-bank customers. Meanwhile, 37 per cent of Australian respondents do not consider the products of rival financial providers to be significantly different.

CORPORATES
ERNST AND YOUNG, PRICEWATERHOUSECOOPERS, MACQUARIE GROUP LIMITED – ASX MQG

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

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

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