K: Financial and Insurance Services

Suncorp insures itself against more storms

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Original article by Sally Rose
The Australian Financial Review – Page: 17 & 20 : 5-Aug-16

Suncorp Group has reported an 8.3 per cent decline in net profit for 2015-16, to $A1.04 billion. Michael Cameron, the CEO of the Australian-listed insurance group, stated on 4 August 2016 that Suncorp has increased its reinsurance protection by $A300 million because of the higher frequency of weather-related events. Shares in Suncorp rose 0.7 per cent to $A13.30.

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, MAPLE-BROWN ABBOTT LIMITED, JP MORGAN AUSTRALIA LIMITED, SUNCORP LIFE AND SUPERANNUATION LIMITED, ASTERON LIFE LIMITED, CONTANGO ASSET MANAGEMENT LIMITED, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

CEOs warn: bashing banks a growth risk

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Original article by Phillip Coorey, James Eyers
The Australian Financial Review – Page: 1 & 6 : 5-Aug-16

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison have been asked to refrain from criticising the banks. Westpac CEO Brian Hartzer said on 4 August 2016 that their criticism is unwarranted. He stated that the banks could not pass on the recent official interest rate cut in full because of the necessity to balance the interests of borrowers with the need for prudent management of their funding needs. Turnbull reminded the banks that they have an obligation to act in socially responsible ways.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKERS’ ASSOCIATION, RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Banks reject Turnbull demand

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Original article by Phillip Coorey, Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 4-Aug-16

Prime Minister Malcolm Turnbull has criticised the major banks for failing to reduce their interest rates by the full 25 basis point reduction in the cash rate on 2 August 2016. Turnbull says the banks have a "social licence" and their CEOs should explain why the rate cut was not passed on to their customers in full. ANZ Bank CEO Shayne Elliott has conceded that banks should do more to explain their decisions on interest rates, but notes that wholesale funding costs are rising and the banks will be subject to new capital requirements.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BANKERS’ ASSOCIATION

Lower rates help stocks but won’t spur growth

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Original article by David Rogers
The Australian – Page: 31 : 4-Aug-16

Australia’s S&P/ASX 200 gained 6.3 per cent in July 2016, but it has shed 2.2 per cent since the Reserve Bank reduced the cash rate to a record low on 2 August. However, equities are likely to benefit from a likely trend for self-managed superannuation funds to reduce their exposure to cash as returns from such investments fall. The outlook for interest rates in Australia and abroad is also likely to ensure that price-earnings ratios remain elevated for some time.

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

ANZ-Roy Morgan Australian Consumer Confidence picks up steam ahead of the RBA meeting – up 2.5pts to 118.0

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 3-Aug-16

ANZ-Roy Morgan Australian Consumer Confidence has risen by 2.2 per cent to 118.0 in the week ending 31 July 2016, with the improvement in confidence being broadly based. Increasing speculation of a rate cut at this week’s RBA meeting was likely a key driver of confidence. In addition, the buoyancy of the equity market – with the Australian share market recording its best July in six years – was also key in supporting household sentiment. Consumers’ views of their current finances rose by 6.8 per cent, and households’ views of the economic outlook in the next 12 months rose by 3.7 per cent.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Gary Morgan on Consumer Confidence and the RBA’s decision to drop Australian interest rates to 1.5%

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Original article by Gary Morgan, Roy Morgan Research
Market Research Update – Page: Online : 3-Aug-16

The August interest rate cut by the RBA shows that finally the RBA has acknowledged Australia’s massive under-employment problem that has been persistently ignored (8.3% – 1.079 million, in June, according to the latest Roy Morgan employment estimates). In addition, it’s time policymakers recognised the true extent of unemployment in Australia (9.6% in June – 1.247 million – according to the latest Roy Morgan real unemployment estimate). To provide an effective stimulus to the economy the RBA should immediately cut Australian interest rates to 0.5% – the same as in the comparable economies of the US & UK and as we have been calling for the RBA to do for more than two years. Reducing interest rates will have the most positive impact on the Australian economy when the banks start lending to more businesses rather than just households – particularly as this week’s ANZ-Roy Morgan Consumer Confidence shows Australians are growing increasingly confident – now at 118.0 (up 2.5pts this week). By providing increased finance and credit to businesses the Australian economy will grow strongly and more jobs will be created for the over 2 million Australians either unemployed or under-employed

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Post-Brexit rally tipped to continue

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Original article by David Rogers
The Australian Financial Review – Page: 32 : 2-Aug-16

Australia’s S&P/ASX 200 gained 6.3 per cent in July 2016, and it has risen by 11 per cent since falling sharply after the UK voted to leave the European Union. The benchmark index is likely to continue to perform well in August, regardless of whether the Reserve Bank decides to reduce the cash rate. The bourse is benefiting from expectations that interest rates in Australia and overseas will remain low for some time. The latest GDP data in the US has dampened expectations that the Federal Reserve will ease monetary policy in 2016.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, BANK OF JAPAN

New ASX boss Dominic Stevens ‘cautious’ on blockchain switch

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 8 : 2-Aug-16

Former Challenger CEO Dominic Stevens has been appointed as the new CEO of ASX Limited. He replaces Elmer Funke Kupper, who resigned in March 2016. Stevens says he will concentrate on issues such as the consolidation in stock exchange services and changes in listing rules, whose aim would be to raise the quality of listed companies. Under his leadership, the ASX will proceed cautiously with implementing new technologies, including blockchain technology.

CORPORATES
ASX LIMITED – ASX ASX, CHALLENGER LIMITED – ASX CGF, TABCORP HOLDINGS LIMITED – ASX TAH, SOCIETYONE AUSTRALIA PTY LTD, DIGITAL ASSET HOLDINGS, CONTANGO ASSET MANAGEMENT LIMITED, LONDON STOCK EXCHANGE, DEUTSCHE BOERSE, SINGAPORE EXCHANGE LIMITED

Westpac aims for 20pc Asian managers

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Original article by Misa Han
The Australian Financial Review – Page: 5 : 29-Jul-16

Westpac CEO Brian Hartzer wants the bank to have greater diversity among its staff. The bank aims to raise the ratio of its executives with an Asian background from 13 per cent to 20 per cent. Hartzer says it is primarily a business issue, although social justice is also important to him. Race discrimination commissioner Tim Soutphommasane suggests that businesses should aim for 10 per cent of their senior executives to have a non-European background.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Citi’s Brennan tips resilience in earnings growth

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Original article by David Rogers
The Australian – Page: 34 : 29-Jul-16

The Australian sharemarket currently boasts a forward price-earnings ratio of 16.6 times, but some market watchers expect that the August 2016 reporting season will justify the high earnings multiple. Tony Brennan of Citigroup is upbeat about the reporting season, saying the positive earnings surprises are likely to outweigh the negative surprises. The benchmark S&P/ASX 200 closed at 5556.6 on 27 July, although Brennan expects it to end the year at about 5,500. However, he forecasts that it will rise to 5,750 by mid-2017.

CORPORATES
CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, APPLE INCORPORATED, FACEBOOK INCORPORATED