K: Financial and Insurance Services

Dollar hit by prospects of US interest rate hike

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Original article by David Rogers
The Australian – Page: 32 : 30-Aug-16

The Australian dollar fell to a four-week low in local trading on 29 August 2016, at around the $US0.7525 level. The currency was sold down amid indications that the Federal Reserve could increase US interest rates at least once before the end of the year, and potentially in September. A downturn in the spot price of iron ore also weighed on support for the commodity currency, which peaked at $US0.7756 earlier in the month. UBS forecasts that the dollar will test the $US0.70 level by the end of the year.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UBS HOLDINGS PTY LTD, BLOOMBERG LP, RESERVE BANK OF AUSTRALIA, QIC LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

CBA cuts discounts to boost margins

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Original article by Richard Gluyas
The Australian – Page: 19 & 22 : 23-Aug-16

The Commonwealth Bank has advised mortgage brokers that the discount on some of its mortgage loan applications for owner-occupiers and investors will be reduced by 15 basis points. It has also cut the discount on several other mortgage products by eight basis points. The move has been attributed to factors such as the rising cost of funding and new capital requirements. Australia’s major banks recently attracted criticism for withholding most of the 25 basis point reduction in the cash rate.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Big four banks sued by US funds over BBSW

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Original article by James Eyers
The Australian Financial Review – Page: 3 : 19-Aug-16

A class action launched in the US may complicate the Australian Securities & Investments Commission’s litigation against three of Australia’s big four banks. The litigants, including a derivatives trader and two hedge funds, allege in documents filed in a New York court that they suffered losses because the four major banks and Macquarie Group manipulated the bank bill swap rate. The US litigation makes a settlement between ASIC and the ANZ Bank, Westpac and National Australia Bank rather unlikely.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN LABOR PARTY, DISTRICT COURT OF UNITED STATES. SOUTHERN DISTRICT OF NEW YORK, SONTERRA CAPITAL MASTER FUND, FRONTPOINT FINANCIAL SERVICES, MAURICE BLACKBURN PTY LTD, BANK OF NEW ZEALAND, BNP PARIBAS SA, CITIBANK CORPORATION, CREDIT SUISSE AG, DEUTSCHE BANK AG, HSBC HOLDINGS PLC, JP MORGAN CHASE AND COMPANY, ROYAL BANK OF CANADA, ROYAL BANK OF SCOTLAND GROUP PLC, UC HOLDINGS, ICAP PLC, TULLETT PREBON, MORGAN STANLEY AND COMPANY INCORPORATED, LLOYD’S OF LONDON

‘Sell everything’ call a distant memory

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 19-Aug-16

Global sharemarkets have defied forecasts in January 2016 of a major slump, with most key indices having recovered from a sell-off in February. Andrew Mitchell of Ophir Asset Management says equities should continue to rise, unless there is a "black swan" event. Many fund managers increased their portfolios’ exposure to cash holdings following the Australian market’s downturn in April 2015, but its rebound from 2016 lows has prompted some to reinvest in equities.

CORPORATES
OPHIR ASSET MANAGEMENT PTY LTD, ROYAL BANK OF SCOTLAND GROUP PLC, FTSE 100 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, KATANA ASSET MANAGEMENT LIMITED, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, DOW JONES INDUSTRIAL AVERAGE INDEX, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Big four the cheapest in 20 years, says Regal

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Original article by Vesna Poljak
The Australian Financial Review – Page: 17 : 17-Aug-16

Regal Funds Management’s Julian Babarczy says Australia’s four major banks offer good value at present, noting that their valuations are at or near their lowest in the last two decades. Meanwhile, Babarczy says the banks’ capital ratios and credit quality are sufficient at present so they do not need to undertake capital raisings. The proceeds of the ANZ Bank’s $A1bn hybrid securities issuance will be treated as additional tier-1 capital rather than common equity tier-1 capital.

CORPORATES
REGAL FUNDS MANAGEMENT PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NIKKO ASSET MANAGEMENT GROUP

CBA chief’s $12.3m pay bonanza

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Original article by Michael Roddan, Ben Butler
The Australian – Page: 21 & 25 : 16-Aug-16

Commonwealth Bank executives were collectively paid a total of $A44.8m in 2015-16. This includes the $A12.3m remuneration of CEO Ian Narev, which was 50 per cent higher than previously. However, the banking major notes that this includes equity awards that were granted over the previous four years and vested during the financial year. Narev’s remuneration rose by 5.4 per cent to $A8.77m on a statutory basis. The bank recently posted a cash profit of $A9.45bn for 2015-16.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN LABOR PARTY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Bankers, lawyers to get busy as merger deals poised to pick up

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 19 : 12-Aug-16

Data from Dealogic shows that the value of announced mergers and acquisitions deals in Australia in the year-to-date has fallen to an 11-year low of $US36.3bn. However, the Real Flow Predictor report from Intralinks suggests that there will be an upturn in announced M&As in the final quarter of 2016. Karen Evans-Cullen of law firm Clayton Utz is also upbeat about the outlook for M&A activity.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, INTRALINKS PTY LTD, CLAYTON UTZ, AUSGRID PTY LTD, ASCIANO LIMITED – ASX AIO, BROOKFIELD INFRASTRUCTURE PARTNERS LP, QUBE PROPERTY GROUP PTY LTD, THE GOOD GUYS, NATURE’S CARE, PORT OF MELBOURNE, STATE GRID CORPORATION OF CHINA, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY

SMSFs head for managed funds in volatile times

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Original article by Sally Patten
The Australian Financial Review – Page: 29 : 12-Aug-16

A survey by Investment Trends and Vanguard shows that 17 per cent of Australia’s self-managed superannuation funds expect to increase their exposure to managed funds in the next 12 months, compared with about 14 per cent in 2015. Meanwhile, the proportion of SMSF trustees who intend to invest in blue-chip stocks has fallen from 65 per cent to 55 per cent. There has also been a decline in investment expectations regarding exchanged traded funds and high-yield shares.

CORPORATES
INVESTMENT TRENDS PTY LTD, VANGUARD INVESTMENTS AUSTRALIA LIMITED

CBA to drive returns as results soften

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Original article by Michael Bennet
The Australian – Page: 21 & 25 : 11-Aug-16

The Commonwealth Bank of Australia has posted a 2015-16 cash profit of $A9.45bn. Despite being a record result, it was just three per cent higher than previously, due to a disappointing performance across the group’s key businesses in the second half. CBA’s return on equity fell to 16.5 per cent and its net interest margin fell to 2.07 per cent. CEO Ian Narev says banks must take into account the needs of borrowers, savers and shareholders with regard to setting interest rates. Shareholders will receive a full-year dividend of $A4.20 per share.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WAVESTONE CAPITAL PTY LTD, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, WATERMARK FUNDS MANAGEMENT PTY LTD, BELL POTTER SECURITIES LIMITED

Elliott steadies the ship at ANZ

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Original article by Michael Bennet
The Australian – Page: 21 & 25 : 10-Aug-16

The ANZ Bank has posted a cash profit of $A5.2bn for the nine months to 30 June 2016, which is three per cent lower than previously. ANZ’s earnings for the June 2016 quarter were below expectations at around $A1.7bn, while bad debt charges rose to $A482m during the quarter. Meanwhile, CEO Shayne Elliott has defended the banks’ decision to pass on only part of the 25 basis point reduction in the cash rate to home loan customers and increase the interest rates on some term deposits.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG