K: Financial and Insurance Services

Ratings agency predicts weaker bank profit growth in 2016

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 20-Jan-16

Fitch Ratings warns that Australian banks are likely to face lower growth in earnings in 2016, citing factors such as a rise in bad loans, an increase in the cost of funding and stronger competition in the sector. However, the ratings agency notes that capital raisings in 2015 mean the four major banks are well-placed to handle any increase in bad loans.

CORPORATES
FITCH RATINGS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, RESERVE BANK OF AUSTRALIA

RBA tipped to make cuts around mid-year

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Original article by Jessica Sier
The Australian Financial Review – Page: 29 : 20-Jan-16

Data from Citigroup shows that financial markets believe that the Reserve Bank of Australia is now almost certain to reduce the cash rate by 25 basis points in June 2016. There is a 20 per cent chance of a rate cut in February, and a 40 per cent chance of a rate cut in March. Factors such as the downturn in the crude oil price and the uncertain outlook for the Chinese economy are like to influence the central bank’s monetary policy deliberations. The cash rate has remained on hold since May.

CORPORATES
RESERVE BANK OF AUSTRALIA, CITIGROUP PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, CITIBANK PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD

NAB unveils pricing range for Clydesdale

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 19-Jan-16

National Australia Bank (NAB) expects to float its British lender Clydesdale Bank in early February 2016. Volatility on global share markets has forced the Australian-listed bank to lower its price expectations for the float. NAB’s Craig Drummond says the British bank will be offered to shareholders at between Stg1.75 and Stg2.35 a share which suggests a market capitalisation of between Stg1.54 billion and Stg2.07 billion ($A3.19 billion and $A4.29 billion).

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CLYDESDALE BANK PLC, LONDON STOCK EXCHANGE, CREDIT SUISSE (AUSTRALIA) LIMITED

APN raises guidance 56pc as funds forge ahead

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Original article by Michael Bleby
The Australian Financial Review – Page: 31 : 19-Jan-16

APN Property Group has revised its full-year earnings guidance. The Australian-listed real estate investment fund stated on 18 January 2016 that its operating earnings for the year would be between $A0.032 and $A0.035 per share, compared with a prediction of earnings of $A0.02 and $A0.023 per share, made at the AGM in November 2015.

CORPORATES
APN PROPERTY GROUP LIMITED – ASX APD, INDUSTRIA REIT FUND – ASX IDR, GENERATION HEALTHCARE REIT – ASX GHC, GROCON PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, HIGH COURT OF AUSTRALIA

ASX drops, bounces back from early low

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 26 : 19-Jan-16

The S&P/ ASX 200 index fell 0.7 per cent on 18 January 2016, closing at 4,858.7 points. The energy sector performed poorly, declining 3.4 per cent, but gains were made in sectors such as consumer, industrial and telecommunications. Woolworths rose 4.4 per cent to $A23.65 after announcing it would exit its home improvement business Masters.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, WOOLWORTHS LIMITED – ASX WOW, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, AURORA FUNDS MANAGEMENT LIMITED, SANTOS LIMITED – ASX STO, WOODSIDE PETROLEUM LIMITED – ASX WPL, BHP BILLITON LIMITED – ASX BHP, OIL SEARCH LIMITED – ASX OSH, TELSTRA CORPORATION LIMITED – ASX TLS, WESTPAC BANKING CORPORATION – ASX WBC, LOWE’S COMPANIES INCORPORATED, WESFARMERS LIMITED – ASX WES, HOME RETAIL GROUP PLC, HOMEBASE, BUNNINGS GROUP LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Property proves winner for fundies

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Original article by Duncan Hughes
The Australian Financial Review – Page: 31 : 19-Jan-16

Australian real estate investment trusts (A-REITs) generated 14 per cent in total return in 2015, according to investment bank JP Morgan. Wholesale property funds and direct property returned about 12 per cent. Tim Mackay, an adviser with Quantum Financial, expects the A-REIT sector to perform well in 2016. Investors are likely to be attracted to the sector by its dividend yield of around five per cent.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, QUANTUM FINANCIAL SERVICES, LEND LEASE GROUP LIMITED – ASX LLC, AVEO GROUP – ASX AOG, STANDARD AND POOR’S ASX 200 A-REIT INDEX

Mortgage activity falls to three-year low

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Original article by Michael Bleby
The Australian Financial Review – Page: 33 : 19-Jan-16

CoreLogic RP Data’s Mortgage Index fell to 70.1 in the week to 17 January 2016. The index was at 99.2 a year ago. The New South Wales mortgage index recorded a sharp decline to 90.4, falling 53.2 per cent from a month earlier. A year ago, it stood at 131.6.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, RP DATA LIMITED, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIAN FINANCE GROUP LIMITED – ASX AFG, FITCH AUSTRALIA PTY LTD, PROPELL NATIONAL VALUERS PTY LTD, WBP PROPERTY GROUP PTY LTD

Brokers say shares will come back

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Original article by Stephen Cauchi, Jonathan Shapiro
The Australian Financial Review – Page: 1 & 4 : 18-Jan-16

Australia’s S&P/ASX 200 has shed 7.9 per cent so far in 2016, closing at 4,892 points on 15 January. However, opinion is divided about the outlook for the local bourse in 2016. Morgan Stanley expects the benchmark index to end the year at 4,800 points, while Macquarie Group has a year-end forecast of 5,900 points. Meanwhile, Shane Oliver of AMP Capital expects the index to end the year at 5,500 points.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, AMP CAPITAL INVESTORS LIMITED, CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, COMMONWEALTH SECURITIES LIMITED, PERPETUAL LIMITED – ASX PPT, MORPHIC ASSET MANAGEMENT PTY LTD, DELTEC, UNITED STATES. FEDERAL RESERVE BOARD, PEOPLE’S BANK OF CHINA, DOW JONES INDUSTRIAL AVERAGE INDEX, SHANGHAI COMPOSITE INDEX

Morgan Stanley tips index at 4800

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 25 : 15-Jan-16

Morgan Stanley is bearish about the outlook for the Australian sharemarket in 2016, forecasting that the S&P/ASX 200 Index will end the year at 4,800 points. The investment bank expects capital returns to be minus nine per cent in 2016, while it says factors such as the prospect of further interest rate cuts and the economic outlook will weigh on earning per share growth. Meanwhile, Societe Generale’s Albert Edwards expects the S&P 500 to shed 75 per cent in 2016, to 550 points.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED,{SPAC}STANDARD AND POOR’S ASX 200 INDEX,{SPAC}CREDIT SUISSE (AUSTRALIA) LIMITED,{SPAC}RESERVE BANK OF AUSTRALIA,{SPAC}SOCIETE GENERALE SA,{SPAC}STANDARD AND POOR’S 500 INDEX,{SPAC}CAPITAL ECONOMICS LIMITED,{SPAC}UNITED STATES. FEDERAL RESERVE BOARD,{SPAC}ISELECT LIMITED – ASX ISU,{SPAC}GODFREYS GROUP LIMITED – ASX GFY

Australian Roy Morgan Business Confidence declines further in December

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 13-Jan-16

A Roy Morgan Business Single Source survey has found that Australian business confidence fell by 4.2 points to 114.5 in December 2015, following an 0.6 per cent decline in November. The combined drop of 4.8 points (or four per cent) over the last two months is a likely indication that the initial burst of confidence following Malcolm Turnbull becoming Prime Minister is beginning to "cool off", although business confidence remains 11.6 per cent above the level prior to his appointment. The drop in business confidence in December was mainly due to deterioration in the outlook for the Australian economy over the next 12 months, which has fallen to its lowest level since August. Despite this poor outlook for Australia over the coming year, businesses still maintain a positive attitude, with 60 per cent agreeing that the next 12 months will be a good time to invest in growing their business, well up on the 51 per cent seen in August.

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