K: Financial and Insurance Services

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

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 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

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

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

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

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