K: Financial and Insurance Services

IPOs bigger but small caps outperform

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 29 : 17-May-16

Data from fintech group OnMarket BookBuilds shows that 27 per cent of the 94 new listings on the Australian sharemarket in 2015 were technology companies, compared with just four of the 97 IPOs in 2010. In contrast, the number of IPOs in the energy and resources sector fell from 72 in 2010 to just four in 2015. Meanwhile, the number of companies being listed by private equity firms has fallen from 22 per cent of IPOs in 2014 to just six per cent in 2015.

CORPORATES
ON-MARKET BOOKBUILDS PTY LTD, WISETECH GLOBAL LIMITED – ASX WTC, AFTERPAY HOLDINGS LIMITED – ASX AFY, REDBUBBLE LIMITED – ASX RBL, DICK SMITH HOLDINGS LIMITED – ASX DSH

Finding the best return in a low-return world

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 17-May-16

Research by Societe Generale’s global asset allocation strategy team has concluded that investors can expect an annualised total return of 5-7 per cent from the majority of developed equity markets in the medium- to long-term. The research also suggests that emerging market equities and bonds are likely to deliver the best returns, with Societe Generale preferring bonds issued by India. However, the group says Australian investors should favour shares rather than bonds.

CORPORATES
SOCIETE GENERALE SA

Companies need to come up with growth strategies

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Original article by Philip Baker
The Australian Financial Review – Page: 26 : 13-May-16

Many Australian-listed companies have prioritised dividend yields in recent years, rather than investing in growth strategies. However, Macquarie Securities’ Jason Todd believes that investors are poised to reward companies that pursue growth via strategies such as acquisitions and capital expenditure. He identifies a number of stocks that could benefit from a growth strategy, including Transurban Group, Wesfarmers, Amcor, Carsales.com, CSL and Orora.

CORPORATES
MACQUARIE SECURITIES PTY LTD, TRANSURBAN GROUP LIMITED – ASX TCL, WESFARMERS LIMITED – ASX WES, AMCOR LIMITED – ASX AMC, CARSALES.COM LIMITED – ASX CAR, CSL LIMITED – ASX CSL, ORORA LIMITED – ASX ORA, ASCIANO LIMITED – ASX AIO, ASX LIMITED – ASX ASX, WOOLWORTHS LIMITED – ASX WOW, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, SEEK LIMITED – ASX SEK, INCITEC PIVOT LIMITED – ASX IPL, TREASURY WINE ESTATES LIMITED – ASX TWE, RAMSAY HEALTH CARE LIMITED – ASX RHC

ANZ-Roy Morgan Australian Consumer Confidence unchanged at 113.9 after RBA rate cut and Federal Budget

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 10-May-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia remained unchanged at 113.9 in the week ended 8 May 2016. While the Reserve Bank’s cut to the official cash rate is likely to have been well received, any positive impact looks to have been somewhat offset by consumers’ reaction to the Commonwealth Budget. Consumers’ views towards their current personal finances fell 0.8 per cent, and consumers’ views toward the economic conditions in the next 12 months fell 1.2 per cent.

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

Nikkei, banks rally lifts ASX to a 2016 high

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 26 : 11-May-16

The Australian sharemarket posted solid gains on 10 May 2016, with the S&P/ASX 200 adding 0.4 per cent to close at 5,342.8, which is its highest level for the year to date. The Commonwealth Bank was 2.9 per cent higher at $A78 and Qantas advanced 2.4 per cent to end the session at $A3.41. However, Rio Tinto eased 2.9 per cent to finish at $A45.40 and Sims Metal Management shed 10.1 per cent to close at $A8.45.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, QANTAS AIRWAYS LIMITED – ASX QAN, RIO TINTO LIMITED – ASX RIO, SIMS METAL MANAGEMENT LIMITED – ASX SGM, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, WOODSIDE PETROLEUM LIMITED – ASX WPL, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MACQUARIE GROUP LIMITED – ASX MQG, TELSTRA CORPORATION LIMITED – ASX TLS, SCENTRE GROUP – ASX SCG, LEND LEASE GROUP LIMITED – ASX LLC, VICINITY CENTRES – ASX VCX, INCITEC PIVOT LIMITED – ASX IPL, BLUESCOPE STEEL LIMITED – ASX BSL, MORGANS FINANCIAL LIMITED, IG MARKETS LIMITED, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, NIKKEI 225 INDEX

Volatile $A could hit US67c as further downside plays out

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Original article by Jessica Sier
The Australian Financial Review – Page: 26 : 10-May-16

Some currency experts have suggested that the recent sharp downturn in the value of the Australian dollar could continue. Mark Walton of BNP Paribas says the currency could fall to around $US0.67 if the Reserve Bank pursues further monetary policy easing. However, Robert Rennie of Westpac says the currency’s sell-off has been "rapid and unexpected", and he adds that it may find support from investors at around the $US0.73 to $US0.735 level.

CORPORATES
BNP PARIBAS SA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MOODY’S INVESTORS SERVICE INCORPORATED, FITCH RATINGS LIMITED, STANDARD AND POOR’S CORPORATION

ANZ dividend cut puts pressure on rivals to follow suit

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Original article by James Eyers
The Australian Financial Review – Page: 15 & 18 : 4-May-16

The ANZ Bank reported a 2015-16 interim cash profit of $A2.8bn on 3 May 2016, which was slightly below market expectations. The banking major reduced its half-year dividend from $A0.86 per share to $A0.80, prompting speculation that National Australia Bank will do so as well when its interim results are released on 5 May. Omkar Joshi of Watermark Funds Management has welcomed ANZ’s decision to reduce its dividend payout ratio, while Katana Asset Management’s Romano Sala Tenna says the other major banks should follow its example.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WATERMARK FUNDS MANAGEMENT PTY LTD, KATANA ASSET MANAGEMENT LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, UBS HOLDINGS PTY LTD, INVESTORS MUTUAL LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION

ANZ-Roy Morgan Australian Consumer Confidence Ticks up 2.2pts to 113.9

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

The ANZ-Roy Morgan Consumer Confidence rating for Australia rose 2.0 per cent to 113.9 in the week ended 1 May 2016, partly reversing the fall in the previous week and bringing confidence back above its long run average. Consumers’ views towards their current personal finances rose 2.9 per cent, although households’ views towards the financial outlook fell by 0.9 per cent.

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

RBA delivers Turnbull a pre-election rate cut

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 4 : 4-May-16

The Australian sharemarket gained 2.1 per cent on 3 May 2016, after the Reserve Bank reduced the cash rate by 25 basis points to a record low of 1.75 per cent in the wake of a downturn in inflation. The ANZ Bank is the only "big four" bank that is yet to confirm that it will respond by reducing its mortgage interest rates. Meanwhile, Westpac and the Commonwealth Bank expect another official interest rate cut in August, although Goldman Sachs forecasts that rates will remain on hold until November.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Westpac misses the profit mark

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Original article by Michael Bennet
The Australian – Page: 19 & 23 : 3-May-16

Shares in Australia’s major banks were sold down on 2 May 2016, after Westpac posted lower-than-expected cash earnings of $A3.9bn for the first half of 2015-16. This was three per cent higher than previously, but impairment charges rose by 96 per cent to $A667m and the bank’s return on equity fell to 14.2 per cent. CEO Brian Hartzer says Westpac will cease offering financial products that do not generate a sufficient return. Shareholders will receive an unchanged interim dividend of $A0.94 per share.

CORPORATES
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, ARRIUM LIMITED – ASX ARI, SLATER AND GORDON LIMITED – ASX SGH, UBS HOLDINGS PTY LTD, BELL POTTER SECURITIES LIMITED, ARNHEM INVESTMENT MANAGEMENT PTY LTD