K: Financial and Insurance Services

CBA holds dividend as urgency fades

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Original article by James Eyers
The Australian Financial Review – Page: 17 & 20 : 11-Feb-16

Commonwealth Bank shareholders will receive a 2015-16 interim dividend of $A1.98 per share, which equates to a payout ratio of around 70 per cent. The banking major has indicated that its full-year dividend payout will be 70-80 per cent of profits. Meanwhile, CEO Ian Narev says the bank is "very happy" with its current level of capital, and he expects the Australian Prudential Regulation Authority (APRA) to let banks increase their capital levels gradually. The Commonwealth Bank’s common equity tier 1 capital level is now 10.2 per cent, while APRA requires a minimum of eight per cent.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NORDEA BANK AB, UBS AG

Property returns trounce shares

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Original article by Simon Evans
The Australian Financial Review – Page: 29 : 11-Feb-16

The Australian sharemarket has delivered a total return of 58 per cent over the last decade. However, residential property prices in Melbourne and Sydney have risen by 92 per cent over the same period. Domain Group’s chief economist Andrew Wilson does not expect the housing market to enjoy such gains in the next decade, warning that growth is likely to be much lower. Perpetual’s Matt Sherwood says equities investors should also expect lower growth in dividends in the near-term.

CORPORATES
DOMAIN.COM.AU, PERPETUAL LIMITED – ASX PPT, STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

ANZ-Roy Morgan Consumer Confidence stabilising for now at 111.4

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 9-Feb-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia rose by 0.2 per cent to 111.4 in the week ended 7 February 2016, breaking the declining trend in confidence seen over the previous four weeks. The recent weakness has left confidence below its long-run average levels. However, the latest result may suggest that concerns around financial market volatility have abated somewhat. The sub-index on "finances in the next 12 months" has fallen by 1.3 per cent, and the sub-index on "economic conditions in the next 12 months" has fallen by 1.7 per cent.

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

The ayes have it: companies wave goodbye to show-of-hands voting

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Original article by Andrew White
The Australian – Page: 21 : 10-Feb-16

The Australian Council of Superannuation Investors believes that companies should use a poll rather than the show-of-hands system to vote on resolutions at AGMs. It is estimated that about 20 per cent of Australia’s top 200 listed companies still use the traditional show-of-hands, although this methods is now used by less than 10 per cent of top-100 companies. Lobbying by TIAA-CREF has convinced many large companies that used a show-of-hands at their 2014 AGM to abandon the practice.

CORPORATES
AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, TEACHERS INSURANCE AND ANNUITY ASSOCIATION – COLLEGE RETIREMENT EQUITIES FUND, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, AUSTRALIA. CORPORATIONS AND MARKETS ADVISORY COMMITTEE

Sevior digs resources again but wary of BHP

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Original article by Matthew Smith
The Australian Financial Review – Page: 15 & 20 : 10-Feb-16

Cash holdings account for some $A1bn worth of the $A5bn-plus investment portfolio of Airlie Funds Management at present. Founder John Sevior is keen to return to the equities market when valuations fall further, and Airlie could potentially be fully invested again by the end of 2016. Sevior intends to gain exposure to resources stocks, having shunned the sector since 2012, but he has ruled out buying BHP Billiton’s shares unless its progressive dividend policy is scrapped.

CORPORATES
AIRLIE FUNDS MANAGEMENT PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, WOODSIDE PETROLEUM LIMITED – ASX WPL, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, SANTOS LIMITED – ASX STO, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DULUXGROUP LIMITED – ASX DLX, SUNCORP GROUP LIMITED – ASX SUN, PREMIER INVESTMENTS LIMITED – ASX PMV, HENDERSON GLOBAL INVESTORS LIMITED, HENDERSON GROUP PLC – ASX HGG, CALTEX AUSTRALIA LIMITED – ASX CTX, PERPETUAL INVESTMENTS

Goldman upbeat, we won’t get a recession

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 32 : 10-Feb-16

Modelling by investment bank Goldman Sachs suggests that there is a 25 per cent chance that developed economies will experience a recession in the next 12 months. This compares with the historical average of 28 per cent. The risk of Australia experiencing a recession is just 13 per cent, while the long-term average is 23 per cent. Goldman Sachs chief economist Jan Hatzius argues that the recent volatility in global financial markets presents an opportunity for risk-averse investors.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, TAILORED INVESTMENT SOLUTIONS PTY LTD, RESERVE BANK OF AUSTRALIA, MONTGOMERY INVESTMENT MANAGEMENT PTY LTD, WILSON ASSET MANAGEMENT

Growth, earnings fears depress ASX darlings

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 30 : 9-Feb-16

Australia’s benchmark S&P/ASX 200 Index has shed six per cent so far in 2016. However, some of the stocks that were among the best performers in 2015 have fallen by more than 10 per cent in 2016, including Domino’s Pizza Enterprises and Blackmores. In contrast, mining stocks – and gold producers in particular – have achieved some of the strongest gains in the year to date.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, BLACKMORES LIMITED – ASX BKL, SUPER RETAIL GROUP LIMITED – ASX SUL, NEWCREST MINING LIMITED – ASX NCM, NORTHERN STAR RESOURCES LIMITED – ASX NST, EVOLUTION MINING LIMITED – ASX EVN, SOUTH32 LIMITED – ASX S32, MINERAL RESOURCES LIMITED – ASX MIN, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, WINGATE ASSET MANAGEMENT PTY LTD, NASDAQ COMPOSITE INDEX, FACEBOOK INCORPORATED, AMAZON.COM INCORPORATED, NETFLIX INCORPORATED, LINKEDIN LIMITED, ASIA PACIFIC PRUDENTIAL SECURITIES

Pimco forecasts slow year but no recession

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 5-Feb-16

Mihir Worah and Geraldine Sundstrom of Pimco believe that the seven-year bull run is over and volatility will be a characteristic of financial markets in 2016. They also warn that investors can expect a period of lower returns, while the crude oil price is forecast to reach $US50 per barrel by the end of the year. Meanwhile, Pimco forecasts that the global inflation rate will rise to between 1.75 per cent and 2.25 per cent, although it has downplayed the prospect of a recession.

CORPORATES
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, UNITED STATES. FEDERAL RESERVE BOARD

ASX loses $32b in worst day of 2016

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 26 : 4-Feb-16

The Australian sharemarket retreated on 3 February 2016, with the S&P/ASX 200 shedding 2.3 per cent to close at 4,876.8. A continued decline in the price of Brent crude oil weighed on energy stocks and reduced the market’s capitalisation by $A32bn. The Commonwealth Bank was 2.9 per cent lower at $A75.73, BHP Billiton eased 4.4 per cent to finish at $A14.27 and Liquefied Natural Gas fell 8.5 per cent to end the session at $A0.59.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BHP BILLITON LIMITED – ASX BHP, LIQUEFIED NATURAL GAS LIMITED – ASX LNG, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, KAROON GAS AUSTRALIA LIMITED – ASX KAR, DEUTSCHE BANK AG, MORGANS FINANCIAL LIMITED, BP PLC, EXXONMOBIL CORPORATION, STANDARD AND POOR’S CORPORATION, CLYDESDALE BANK PLC, YORKSHIRE BANK PLC, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, WORLD BANK, BANK OF JAPAN, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, HANG SENG INDEX, NIKKEI 225 INDEX, SHANGHAI COMPOSITE INDEX

ANZ-Roy Morgan Australian Consumer Confidence on the crawl – down 1pt to 111.2

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 1-Feb-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia fell by one per cent to 111.2 in the week ended 31 January 2016, and it has fallen by 4.4 per cent over the last four weeks. On average, confidence was 2.1 per cent lower in January compared with December. It is unusual for confidence to fall in January, and this is the first time since 2008 that the year has started on a pessimistic note. The sub-index on "financial situation compared to a year ago" has fallen by 2.9 per cent, although the sub-index on "economic conditions in the next 12 months" has risen by 2.3 per cent.

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