K: Financial and Insurance Services

Deal activity dives as rates hit hard

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Original article by David Swan
The Australian – Page: 13 & 19 : 22-Sep-23

Data from Refinitiv shows that mergers and acquisitions involving Australians companies has totalled $US81.3bn so far in 2023, which is 27 per cent lower than at the same time in 2022. Investment banks’ advisory fees for completed M&A deal are 62 per cent lower than the same period in 2022, at $US354m. Underwriting fees for equity and debt capital market transactions have in turn fallen by 16 per cent and nine per cent respectively. Nick Sims from Goldman Sachs Australia expects deal-making activity to pick up for the remainder of 2023 and into 2024, in the absence of any macroeconomic or geopolitical shocks.

CORPORATES
REFINITIV AUSTRALIA PTY LTD, GOLDMAN SACHS AUSTRALIA PTY LTD

Super returns lower in August

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Original article by Chris Herde
The Australian – Page: 15 : 13-Sep-23

SuperRatings estimates that the median balanced superannuation fund posted a return of minus 0.1 per cent in August, after gaining 1.5 per cent in July. The research house also expects the median growth fund to have lost 0.3 per cent in August. Executive director Kirby Rappell says monthly returns are likely to continue to "bounce around" in the near-term, due to ongoing market uncertainty. He has emphasised the need for super fund members to focus on the long-term performance.

CORPORATES
SUPERRATINGS PTY LTD

Top economists see end to rate hikes, predict house price recovery

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Original article by Millie Muroi
The Age – Page: Online : 13-Sep-23

The Commonwealth Bank of Australia’s chief economist Stephen Halmarick says a falling inflation rate means that official interest rates have now most likely peaked. He expects consumer spending to begin to decline by the end of 2023, prompting the Reserve Bank to start easing monetary policy in 2024. Halmarick also forecasts that house prices will rise by seven per cent in 2023 and a further five per cent in 2024, citing factors such as rising migration levels and housing supply constraints. Besa Deda from Westpac also suggests that interest rates may have peaked, and she expects the cash rate to begin falling in the second half of 2024.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA

Banking for the rich fear: ANZ

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Original article by Glen Norris
The Australian – Page: 13 & 19 : 30-Aug-23

ANZ Bank CEO Shayne Elliott has expressed concern about the impact of over-regulation of the sector and stricter lending standards on access to banking services. He notes that complying with new regulations cost ANZ some 4.7 cents for every dollar of revenue in 2022, compared with just 0.7 cents when he took the helm in 2017. Elliott adds that the regulatory burden is making it harder to obtain a loan or credit card, or to start a business. He acknowledges that lending standards needed to be tightened after the global financial crisis and the Hayne royal commission, but says there is a risk that banking and access to credit may become limited to wealthy people in the future.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

1.43 million Australians At Risk of mortgage stress in June 2023, representing 28.7% of mortgage holders

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Original article by Roy Morgan
Market Research Update – Page: Online : 26-Jul-23

New research from Roy Morgan shows that an estimated 1.43 million mortgage holders (28.7%) were ‘At Risk’ of ‘mortgage stress’ in the three months to June 2023. This period encompassed two interest rate increases of 0.25%, taking official interest rates to 4.1% in June. This is the equal highest number of mortgage holders considered ‘At Risk’ of mortgage stress for more than 15 years, since there were 1.46 million ‘At Risk’ in May 2008. The number of Australians who are ‘At Risk’ of mortgage stress has increased by 539,000 over the last year. However, the overall number of Australians in mortgage stress remains below the high reached during the Global Financial Crisis in early 2008 of 35.6% (1,455,000 mortgage holders). Meanwhile, the number of mortgage holders considered to be ‘Extremely At Risk’ has increased to 943,000 (19.6%) in the three months to June, which is significantly above the long-term average over the last 15 years of 15.4%. These are the latest findings from Roy Morgan’s Single Source Survey, based on in-depth interviews conducted with over 60,000 Australians each year including over 10,000 owner-occupied mortgage-holders.

CORPORATES
ROY MORGAN LIMITED

NAB blocks high-risk crypto exchanges

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Original article by Lucas Baird
The Australian Financial Review – Page: 17 : 17-Jul-23

The National Australia Bank has announced it will block payments to certain high-risk cryptocurrency exchanges as from 17 July, although NAB head of fraud Chris Sheehan has declined to name which exchanges are being targeted. The NAB’s action is the latest in a series of similar crackdowns by the major banks, who are finding that scammed money is increasingly being diverted into cryptocurrency, making it almost impossible to recover for scam victims. Asked if the ban includes Binance, Sheehan replied that "our approach is going to be consistent with the rest of the industry".

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BINANCE

Investors pull out of equities on recession fear

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Original article by Joanne Tran
The Australian Financial Review – Page: 27 : 12-Jul-23

Data from global funds network Calastone shows that Australia fund managers’ net outflows totalled $2.8bn in the June quarter. Equities accounted for $1.65bn of the net outflows, while property accounted for $173m. The bearish investor sentiment toward higher-risk assets resulted in fixed income funds recording net inflows of $582m for the period. Teresa Walker of Calastone says there is no particular reason to favour the Australian sharemarket over offshore markets at present.

CORPORATES
CALASTONE

WA miners the top performers

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Original article by Eli Greenblat
The Weekend Australian – Page: 25 & 39 : 1-Jul-23

Lithium producer Liontown Resources was the top-performing stock in the S&P/ASX 200 during 2022-23, rising by 168.25 per cent. The mining and resources sector dominated the performance charts, accounting for six of the 10 stocks with the highest returns for the fiscal year; Western Australia-based miners resources stocks in particular delivered strong returns. However, Lake Resources shed 61.78 per cent in 2022-23; other underperformers included The Star Entertainment Group (down 55.05 per cent) and Domino’s Pizza (down 31.72 per cent).

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, LIONTOWN RESOURCES LIMITED – ASX LTR, LAKE RESOURCES NL – ASX LKE, THE STAR ENTERTAINMENT GROUP LIMITED – ASX SGR, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP

Shares end year on a high

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Original article by David Rogers
The Weekend Australian – Page: 25 & 39 : 1-Jul-23

The S&P/ASX 200 gained 9.7 per cent during 2022-23, which is well above the average gain of 6.6 per cent over the last decade; it also follows a loss of 10.2 per cent for the previous financial year. The benchmark index rose by 14.5 per cent in 2022-23 on a total return basis, compared with a 6.1 per cent loss in 2021-22. The S&P/ASX 200 information technology index rose by 36 per cent in 2022-23, while the materials sector added 15 per cent. Meanwhile, AMP Capital expects balanced superannuation funds to post a gain of 8-9 per cent for the financial year.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX 200 INFORMATION TECHNOLOGY INDEX

Bendigo Bank home loan customers are the most satisfied with their bank after a year of interest rate rises

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Original article by Roy Morgan
Market Research Update – Page: Online : 21-Jun-23

New financial data from Roy Morgan’s Single Source shows that Bendigo Bank has topped the latest banking customer satisfaction ratings among home loan customers. Bendigo Bank’s customer satisfaction rating has increased from 86.2% in May 2022 to 91.0% in May 2023. Close behind in second place is ING with customer satisfaction among home loan customers at 88.3%, up 0.2% points from a year ago. The latest data covers the six months to May 2023, and overall home loan customer satisfaction amongst Australia’s top 12 banks collectively was at 75.5% during this period. This represents a decrease of 1.6% points from the six months to May 2022, just as the current record-setting interest rate increasing cycle got under way. Meanwhile, NAB now has the highest home loan customer satisfaction among the big four banks, with a rating of 75.6%. Average home loan customer satisfaction with the big four banks as a group was 73.7%. These latest banking satisfaction ratings come from the Roy Morgan Single Source survey, derived from in-depth interviews with over 60,000 Australians each year.

CORPORATES
ROY MORGAN LIMITED, BENDIGO BANK, ING BANK (AUSTRALIA) LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB