K: Financial and Insurance Services

Terrorism no longer phases investors

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Original article by John Kehoe
The Australian Financial Review – Page: 12 : 15-Jun-16

The Dow Jones Industrial Average fell 7.1 per cent when trading resumed following the 11 September 2001 terrorist attacks in the US. However, the Dow Jones shed just 0.74 per cent after 50 people were killed in a nightclub in Orlando. Likewise, the CAC 40 shed just 0.1 per cent following the Paris terrorist attacks in November 2015 and the Brussels attacks in March 2016 had little impact on global sharemarkets. Analysis also suggests that terrorist attacks generally do not have much economic impact over the long-term.

CORPORATES
DOW JONES INDUSTRIAL AVERAGE INDEX, CAC 40 INDEX, STANDARD AND POOR’S 500 INDEX, IBEX 35 INDEX, FTSE 100 INDEX, CHARLES SCHWAB AND COMPANY, UNIVERSITY OF ALABAMA

Dud stocks stage tidy turnarounds

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Original article by Simon Evans
The Australian Financial Review – Page: 16 : 15-Jun-16

A number of stocks whose poor performance had made them candidates for tax-loss selling in the lead-up to the end of the financial year have rebounded in recent months. Santos reached a low of $A2.64 early in 2016, but the stock has since risen to around $A4.48. Other resources and mining-related stocks have also staged a turnaround in recent months, while grocery wholesaler Metcash has risen strongly since September 2015. Likewise, speculation of a potential demerger has boosted the share price of Origin Energy.

CORPORATES
SANTOS LIMITED – ASX STO, METCASH LIMITED – ASX MTS, ORIGIN ENERGY LIMITED – ASX ORG, SOUTH32 LIMITED – ASX S32, WORLEYPARSONS LIMITED – ASX WOR, BRADKEN LIMITED – ASX BKN, PERPETUAL INVESTMENTS, IGA, WOOLWORTHS LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD, ALDI STORES SUPERMARKETS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, ARRIUM LIMITED – ASX ARI

Beaten-down blue chips offer attractive buying opportunities

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 30 : 14-Jun-16

Australia’s S&P/ASX300 has gained 3.76 per cent so far in 2016, while the S&P/ASX 200 has shed 2.4 per cent. However, Olivia Engel of State Street Global Advisors remains upbeat about the top 20 blue chip stocks, arguing that the sell-off means that some of them offer value. Tim Schroeders of Pengana Capital recently noted that blue-chip miners BHP Billiton and Rio Tinto represent "reasonable" value on an enterprise value and EBITDA basis.

CORPORATES
STANDARD AND POOR’S ASX 300 INDEX, STANDARD AND POOR’S ASX 20 INDEX, STATE STREET GLOBAL ADVISORS AUSTRALIA LIMITED, PENGANA CAPITAL LIMITED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, 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, TELSTRA CORPORATION LIMITED – ASX TLS, CSL LIMITED – ASX CSL, WESFARMERS LIMITED – ASX WES, WOOLWORTHS LIMITED – ASX WOW, SCENTRE GROUP – ASX SCG, MACQUARIE GROUP LIMITED – ASX MQG, TRANSURBAN GROUP LIMITED – ASX TCL, WOODSIDE PETROLEUM LIMITED – ASX WPL, WESTFIELD CORPORATION – ASX WFD, BRAMBLES LIMITED – ASX BXB, QBE INSURANCE GROUP LIMITED – ASX QBE, AMP LIMITED – ASX AMP, SUNCORP GROUP LIMITED – ASX SUN, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG

Locals fall short when it comes to annual reports

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Original article by Michael Roddan
The Australian – Page: 23 : 9-Jun-16

Research by KPMG shows that the annual reports of French companies average 310 pages, while Australian annual reports average just 155. Meanwhile, local companies’ consolidated financial statements average 70 pages, compared with 140 in Italy. However, the length of the remuneration reports of Australian companies tend to exceed the global average, comprising 28 per cent of their annual report. KPMG’s global survey also shows that just 14 per cent of Australian companies outline their longer-term business strategy in the annual report.

CORPORATES
KPMG

Minority rule would knock confidence

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 29 : 9-Jun-16

The 2016 federal election remains too close to call, raising the prospect of a hung parliament or a minority government. Analysts warn that investor sentiment would be affected by a minority government, with Chris Nicol and Daniel Blake of Morgan Stanley noting that both business and consumer confidence were hit during the tenure of the previous minority government between 2010 and 2013. Analysis by Citigroup concludes that the Coalition is likely to win the election, although the Australian Labor Party could gain around 10 seats.

CORPORATES
CITIGROUP PTY LTD, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, JB HI-FI LIMITED – ASX JBH, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, WHITEHAVEN COAL LIMITED – ASX WHC

ANZ-Roy Morgan Australian Consumer Confidence rebounds

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 7-Jun-16

ANZ-Roy Morgan Australian Consumer Confidence rose 3.2 per cent in the week ending 5 June, more than offsetting the 2.2 per cent decline of the previous week. Consumer confidence now stands at 116.8, the highest level since January 2014. The improvement in consumer confidence was likely driven by the solid GDP report released last week. The increase in confidence was broad-based, with consumers’ views of the economic outlook leading the gains. Views towards "economic conditions in the next 12 months" bounced a sharp seven per cent, and views towards "the economy in the next five years" rose 3.5 per cent.

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

‘Unconscionable’ NAB sued by ASIC over alleged rate rigging

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Original article by James Eyers, Clancy Yeates
The Australian Financial Review – Page: 2 : 8-Jun-16

Opposition Leader Bill Shorten says the latest development in the scandal over manipulation of the bank bill swap rate demonstrates the need for a royal commission into the banking sector. The Australian Securities & Investments Commission will allege in the Federal Court that National Australia Bank manipulated the BBSW in 50 separate transactions from mid-2010 to late-2012. ASIC has previously launched legal action against Westpac and the ANZ Bank.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN GREENS, FEDERAL COURT OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

August cut tipped, but central bank headed for a pause

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Original article by Vesna Poljak
The Australian Financial Review – Page: 24 : 8-Jun-16

Inflation data to be released in late July 2016 may influence the Reserve Bank of Australia’s next move on interest rates, after the central bank left the cash rate on hold on 7 June. A survey by Bloomberg shows that most economists expect the cash rate to be 1.5 per cent by the June 2017 quarter. Jamieson Coote Bonds co-founder Charlie Jamieson expects a rate cut in August, adding that it may then opt to keep the cash rate on hold.

CORPORATES
RESERVE BANK OF AUSTRALIA, JAMIESONCOOTEBONDS PTY LTD, BLOOMBERG LP

Is the yield play back in vogue?

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Original article by Jessica Sier
The Australian Financial Review – Page: 25 : 8-Jun-16

The low interest rate environment has prompted strong support for high-yielding Australian stocks. However. investors recently began selling yield stocks amid expectations of several interest rate rises in the US during 2016. Citi Global Markets’ Karen Jorritsma notes that yield stocks will be back in favour following the release of the latest US jobs data, which will dampen expectations that the Federal Reserve will increase the cash rate.

CORPORATES
CITIGROUP PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, SCENTRE GROUP – ASX SCG, SYDNEY AIRPORT – ASX SYD, TRANSURBAN GROUP LIMITED – ASX TCL, APA GROUP – ASX APA, KATANA ASSET MANAGEMENT LIMITED, DEXUS PROPERTY GROUP – ASX DXS, MIRVAC GROUP – ASX MGR

NAB set to face claims of rate-rigging

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Original article by Sarah Thompson, Jemima Whyte, Anthony Macdonald
The Australian Financial Review – Page: 17 & 22 : 3-Jun-16

The Australian Securities & Investments Commission has a narrow time-frame to decide whether to pursue legal action against National Australia Bank for manipulating the bank bill swap rate. The alleged conduct occurred on 6 June 2010, which means ASIC must commence legal proceedings within days under the statute of limitations. Westpac and ANZ Bank have already been the subject of ASIC action over such conduct, while several investment banks have agreed to enforceable undertakings.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS AG, ROYAL BANK OF SCOTLAND GROUP PLC, BNP PARIBAS SA