K: Financial and Insurance Services

M&A set to throw off the shackles

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Original article by Michael Bennet
The Australian – Page: 17 : 22-Feb-16

Data from Thomson Reuters shows that $US5.4bn ($A7.5bn) worth of mergers and acquisitions have been announced in Australia so far in 2016, compared with $US20.3bn at the same time in 2015. However, Herbert Smith Freehills partner Tony Damian expects M&A activity to improve, noting that a number of deals are in the pipeline. Freehills expects an increase in takeover activity in sectors such as financial services and resources. It also forecasts that private equity firms will be more active.

CORPORATES
THOMSON REUTERS PLC, HERBERT SMITH FREEHILLS PTY LTD, ASCIANO LIMITED – ASX AIO, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CLYDESDALE BANK PLC, CREDIT SUISSE (AUSTRALIA) LIMITED, STANDARD AND POOR’S ASX 200 INDEX, OZFOREX GROUP LIMITED – ASX OFX, GREENCROSS LIMITED – ASX GXL, WESTERN UNITED LIMITED, TPG CAPITAL LP, THE CARLYLE GROUP, JAPAN POST, TOLL HOLDINGS LIMITED

Negative gearing cap tipped to push up rents

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 19-Feb-16

Mortgage Choice has posted a 2015-16 interim net profit of $A10.1m, which is 12.4 per cent higher than previously. The mortgage broker’s revenue rose by 5.4 per cent to $A102.3m, and its loan book increased by 4.7 per cent to a record $A50.7bn. CEO John Flavell has warned that the Federal Government’s proposed changes to the negative gearing regime would result in rent increases, as it would reduce the pool of rental housing.

CORPORATES
MORTGAGE CHOICE LIMITED – ASX MOC, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, AUSTRALIAN LABOR PARTY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Australia at risk from hard landing in China

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 35 : 18-Feb-16

The Chinese economy expanded by just 6.9 per cent in 2015, and Oxford Economics forecasts a gradual slowing of economic growth over the next five years. However, Sian Fenner of Oxford Economics warns that Australia could face a recession in 2016 if the Chinese economy experiences a "hard landing". Fenner adds that in the event of a recession the Reserve Bank could reduce the cash rate to just 0.25 per cent, which would limit the extent of the economic downturn.

CORPORATES
OXFORD ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA, AVIVA PLC, PEOPLE’S BANK OF CHINA, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

ANZ-Roy Morgan Australian Consumer Confidence increases to 113.6

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Original article by Gary Morgan
Market Research Update – Page: Online : 16-Feb-16

The rise in Consumer Confidence to 113.6 in the week ended 14 February 2016 comes after Prime Minister Malcolm Turnbull appeared to rule out any prospect of a GST increase to 15 per cent being taken to the Australian electorate as part of the Government’s taxation reform package. The decision to look for other means to improve the Australian taxation system has given a boost to the confidence of Australian consumers who now don’t face the prospect of higher costs for goods and services that a higher GST would bring. As school leavers return from Summer holidays the next few months will determine whether they are able to find meaningful employment in a tough economic environment and this impact on Australia’s real unemployment – now at 10.3 per cent – 1.346 million in January – will also flow through as a forward indicator to the ANZ-Roy Morgan Consumer Confidence Rating.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

ANZ-Roy Morgan Australian Consumer Confidence increases to 113.6

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

The ANZ-Roy Morgan Consumer Confidence rating for Australia rose by 2.0 per cent to 113.6 in the week ended 14 February 2016. This follows a modest 0.2 per cent increase in the previous week and takes confidence back above its long-run average. The broad-based increase in confidence may suggest consumers are looking through the equity market weakness and shifting focus to domestic fundamentals. The sub-index on "finances compared to a year ago" has risen by 1.2 per cent, and consumers’ views on whether now is a good time to buy a major household item has risen by 2.9 per cent.

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

Why this market isn’t like the bloodiest days of 2008

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 17-Feb-16

The slump in global sharemarkets in 2016 has prompted comparisons with the onset of the global financial crisis in 2008. However, analysis shows that many Australian blue-chip stocks remain significantly above the lows recorded at the height of the GFC. National Australia Bank is the only one of the "big four" whose share price had not reached its pre-GFC high when the market peaked in April 2015. In contrast, energy stocks – which generally rallied during the GFC – have fallen sharply since April.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, STANDARD AND POOR’S ASX 20 INDEX, CREDIT SUISSE (AUSTRALIA) LIMITED, LEHMAN BROTHERS INCORPORATED, CITIGROUP PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, ORIGIN ENERGY LIMITED – ASX ORG, SANTOS LIMITED – ASX STO, CSL LIMITED – ASX CSL, CARNEGIE ASSET MANAGEMENT FONDSMAEGLERSELSKAB AB

Bendigo still beats analyst forecasts

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Original article by Shaun Drummond
The Australian Financial Review – Page: 18 : 16-Feb-16

Bendigo & Adelaide Bank has posted a 2015-16 interim net profit of $A208.7m, which is 8.2 per cent lower than previously. However, its after-tax cash profit rose by 2.7 per cent to $A223.7m and net income rose to $A783.5m. Income from the regional bank’s Homesafe reverse mortgage-style product increased by 66 per cent to $A50.4m. The group’s shares closed at $A8.86 on 15 February 2016.

CORPORATES
BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BELL POTTER SECURITIES LIMITED, CONTANGO ASSET MANAGEMENT LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MACQUARIE BANK LIMITED – ASX MBL, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

China fears greatly exaggerated, says Aviva

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Original article by Ruth Liew
The Australian Financial Review – Page: 30 : 16-Feb-16

The Chinese sharemarket was resilient on 15 February 2016, despite concern that it would fall sharply when trading resumed after the week-long holiday for the Lunar New Year. Meanwhile, Aviva Investors CEO Euan Munro has downplayed concerns about the outlook for the Chinese economy, noting that it is still growing despite its shift from a focus on commodities. However, he says the yuan could potentially fall by 15-20 per cent against the US dollar in the next several years.

CORPORATES
AVIVA INVESTORS, AVIVA PLC, STANDARD LIFE INVESTMENTS LIMITED, PEOPLE’S BANK OF CHINA, RESERVE BANK OF AUSTRALIA, SHANGHAI COMPOSITE INDEX

Millionaires roll shrinks by 5000

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Original article by Ruth Liew
The Australian Financial Review – Page: 19 : 15-Feb-16

Data from Investment Trends shows that Australia boasted 440,000 individuals whose investable assets topped $A1m at the end of October 2015. This compares with 445,000 in 2014, while the combined assets of the nation’s millionaires has fallen from $A1.57trn to $A1.55trn. Investment Trends’ Irene Guiamatsia notes that property and direct ownership of shares accounts for two-thirds of the investment portfolios of most high net worth individuals.

CORPORATES
INVESTMENT TRENDS PTY LTD, RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX

Suncorp profit hit by natural disaster claims

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Original article by Ruth Liew
The Australian Financial Review – Page: 16 : 12-Feb-16

Australian-listed insurer Suncorp Group has reported a 2015-16 interim net profit of $A530m, which is 16 per cent lower than previously. The result was marred by factors such as lower returns from its investment portfolio and an increase in claims arising from natural disasters. The core general insurance division has booked a half-year profit of $A297m, while the banking arm’s profit was $A194m. Shareholders will receive an interim dividend of $A0.30 per share.

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED, GIO AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BKI INVESTMENT COMPANY LIMITED – ASX BKI, FIDELITY WORLDWIDE INVESTMENT, CLSA AUSTRALIA PTY LTD, GPT GROUP – ASX GPT