K: Financial and Insurance Services

Overvalued Aussie dollar could dive below US50c, warns ANZ

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Original article by Mark Mulligan
The Australian Financial Review – Page: 34 : 26-May-16

The Australian dollar is currently trading above $US0.71, but Daniel Been of the ANZ Bank warns that it could potentially test the $US0.50 level. While the currency has shed 35 per cent against its US counterpart over the last five years, Been says its continued resilience can be partly attributed to Australia’s "AAA" credit rating, which has led to the dollar being regarded as a safe-haven currency. He notes that factors such as Australia’s current account deficit and high government debt would not usually result in such strong support for the currency.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, STRATTON STREET CAPITAL LLP, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

Palmer and Packer up in top stocks

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Original article by John Stensholt
The Australian Financial Review – Page: 21 & 26 : 26-May-16

Reliance Worldwide Corporation chairman Jonathan Munz and WiseTech Global CEO Richard White will appear on the "BRW" Rich 200 List for the first time in 2016, with estimated wealth of $A1.07bn and $A657m respectively. Meanwhile, some members of the Rich List have increased their fortunes by investing in speculative resources stocks, including James Packer, Mark Creasy and Kerry Harmanis.

CORPORATES
RELIANCE WORLDWIDE CORPORATION LIMITED – ASX RWC, WISETECH GLOBAL LIMITED – ASX WTC, MOD RESOURCES LIMITED – ASX MOD, GASCOYNE RESOURCES LIMITED – ASX GCY, ALICANTO MINERALS LIMITED – ASX AQI, DE GREY MINING LIMITED – ASX DEG, BEADELL RESOURCES LIMITED – ASX BDR, MINERALOGY PTY LTD, CROWN RESORTS LIMITED – ASX CWN, PARADICE INVESTMENT MANAGEMENT PTY LTD, JUBILEE MINES NL, XSTRATA AG, BLACKMORES LIMITED – ASX BKL, ACONEX LIMITED – ASX ACX, SMART PARKING LIMITED – ASX SPZ, BELLAMY’S AUSTRALIA LIMITED – ASX BAL, MILLENNIUM MINERALS LIMITED – ASX MOY

ANZ-Roy Morgan Australian Consumer Confidence creeps higher – up 0.6pts to 115.7

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 24-May-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia rose 0.5 per cent to 115.7 in the week ended 22 May 2016. It has risen 3.6 per cent over the past four weeks. The latest increase likely reflects several factors, including last week’s jobs report (which confirmed healthy conditions in the labour market), strong auction clearance rates, the positive impact from the RBA rate cut three weeks ago and ongoing gains in equity markets since early April. Consumers’ views towards their finances in the next 12 months rose 3.4 per cent, but consumers’ views toward economic conditions in the next 12 months fell slightly.

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

Mid-cap returns surge 54pc in past five years

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Original article by Jessica Sier
The Australian Financial Review – Page: 24 : 25-May-16

Australia’s S&P/ASX MidCap 50 Index has gained nearly 14 per cent in 2016, while the benchmark S&P/ASX 200 has shed two per cent. Meanwhile, mid-capitalisation stocks have delivered total returns of 54 per cent over the last five years. While the benchmark index is heavily weighted toward banks and resources groups, the MidCap 50 includes a more diverse range of sectors. Treasury Wine Estates, Domino’s Pizza Enterprises and REA Group are among the top performers in the index over the last 12 months.

CORPORATES
STANDARD AND POOR’S ASX MIDCAP 50 INDEX, STANDARD AND POOR’S ASX 200 INDEX, TREASURY WINE ESTATES LIMITED – ASX TWE, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, REA GROUP LIMITED – ASX REA, COMMONWEALTH SECURITIES LIMITED, HYPERION ASSET MANAGEMENT LIMITED, ARNHEM INVESTMENT MANAGEMENT PTY LTD, SPOTLESS GROUP HOLDINGS LIMITED – ASX SPO, PRIMARY HEALTH CARE LIMITED – ASX PRY, ANSELL LIMITED – ASX ANN

Time ripe for buybacks: analyst

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 25 : 25-May-16

Analysis by Credit Suisse shows that S&P/ASX 200 companies that have undertaken share buybacks have achieved an annual return of 9.3 per cent since 2002. In contrast, companies that have not repurchased shares have delivered a return of negative 1.9 per cent over this period. Hasan Tevfik of Credit Suisse argues that more listed companies should capitalise on the low cost debt to undertake buybacks or mergers and acquisitions. He adds that the falling cost of debt in China is likely to prompt more Chinese companies to pursue acquisitions in Australia.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, STANDARD AND POOR’S ASX 200 INDEX, QANTAS AIRWAYS LIMITED – ASX QAN, CSR LIMITED – ASX CSR, JAMES HARDIE INDUSTRIES PLC – ASX JHX, BELL POTTER SECURITIES LIMITED, CSL LIMITED – ASX CSL

Macquarie tips 1pc cash

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 27 : 20-May-16

James McIntyre of Macquarie Group says the Reserve Bank will have further ease monetary policy unless the Australian Government stimulates the economy with fiscal policy measures. He says this is unlikely, which will leave it to the central bank to put downward pressure on the dollar via rate cuts. McIntyre expects the cash rate to fall to at least one per cent.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

ANZ-Roy Morgan New Zealand Consumer Confidence falls to 116.2 in May (down 3.8pts)

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 19-May-16

The ANZ-Roy Morgan New Zealand Consumer Confidence Index has fallen by four points to 116.2 in May 2016. In seasonally adjusted terms confidence eased from 117 to 115. The Current Conditions Index fell by four points to 119.3 and the Future Conditions Index fell by three points to 114.3.

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

Even lower interest rates keep dividends attractive

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 19 : 20-May-16

Tim Baker of Deutsche Bank expects the high dividend yields of Australian equities to remain attractive to investors, amid historically low interest rates and bond yields. He notes that Australian dividend yields have averaged about five per cent over the long-term, which is significantly higher than the yield on international shares. He adds that Australian superannuation funds may reduce their exposure to cash products in favour of shares, while banks’ high yields may attract both local and offshore investors.

CORPORATES
DEUTSCHE BANK AG, UBS HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, ORICA LIMITED – ASX ORI, CSR LIMITED – ASX CSR, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, STOCKLAND – ASX SGP, PACT GROUP HOLDINGS LIMITED – ASX PGH, ALUMINA LIMITED – ASX AWC, MACQUARIE GROUP LIMITED – ASX MQG, SYDNEY AIRPORT – ASX SYD, APA GROUP – ASX APA, SUNCORP GROUP LIMITED – ASX SUN

ANZ-Roy Morgan Australian Consumer Confidence ticks up to 115.1 after Federal Election called for July 2

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 17-May-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia rose 1.1 per cent to 115.1 in the week ended 15 May 2016, remaining above its long run average for the third consecutive week. The RBA’s cut to the official cash rate two weeks ago likely had a (delayed) positive impact on consumer confidence. Consumers’ views towards their current finances fell 1.8 per cent, but consumers’ views toward economic conditions in the next 12 months rose by 6.1 per cent.

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

$A jump dampens predictions of further rate cuts soon

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Original article by Jessica Sier
The Australian Financial Review – Page: 28 : 18-May-16

The minutes of the Reserve Bank of Australia’s May 2016 board meeting show that the central bank considered leaving rates on hold. The cash rate was cut by 25 basis points, but opinion among market watchers is divided as to the timing and extent of further monetary policy easing. Royal Bank of Canada’s Su-Lin Ong says the RBA could cut the cash rate again in June, although Capital Economics and the Commonwealth Bank expect a rate cut in August. The latter also expects another cut in November.

CORPORATES
RESERVE BANK OF AUSTRALIA, ROYAL BANK OF CANADA, CAPITAL ECONOMICS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC