K: Financial and Insurance Services

Future Fund shifts to 20pc cash weighting as global risks grow

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 15 & 18 : 28-Jan-16

The Australian Government’s Future Fund reduced its investment portfolio’s equities holdings from 39 per cent to 31 per cent in 2015. The fund has in turn lifted its exposure to cash holdings to around 20 per cent, or $A24.4bn. CEO David Neal says the fund has taken into account the high-risk global environment and the low yields that currently prevail. The fund posted a return of 8.4 per cent for calendar 2015, although its return for the second half was one per cent.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, CHANT WEST FINANCIAL SERVICES PTY LTD

Rate cut in near future seen as unlikely

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Original article by Vanessa Desloires, Jessica Sier
The Australian Financial Review – Page: 27 : 22-Jan-16

The general consensus of Australian economists is that the Reserve Bank will leave the cash rate unchanged in February 2016. Shane Oliver of AMP is the only economist out of 14 who believes that recent financial market volatility could result in an interest rate cut. He adds that the upcoming release of inflation data for the December 2015 quarter is likely to be the deciding factor. Meanwhile, the ANZ Bank’s chief economist Warren Hogan expects the cash rate to be cut in May and August.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, HSBC AUSTRALIA HOLDINGS PTY LTD, BLOOMBERG LP, AUSTRALIAN BUREAU OF STATISTICS, BETASHARES CAPITAL LIMITED, BANK OF CANADA, MERRILL LYNCH (AUSTRALIA) PTY LTD, RBC CAPITAL MARKETS, CITIGROUP PTY LTD

AFIC hunts for quality mid-cap investments

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Original article by Ruth Liew
The Australian Financial Review – Page: 17 : 21-Jan-16

The Australian Foundation Investment Company has posted a 2015-16 interim profit of $A145.5m, which is 10.3 per cent higher than previously. The listed investment company’s revenue was 7.2 per cent higher at $A156.6m, although its investment portfolio generated a loss of 1.3 per cent for the half-year. The group has reduced its exposure to large banks and retailers, and increased its holdings of stocks such as Qube Holdings, Suncorp Group and Treasury Wine Estates.

CORPORATES
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, QUBE HOLDINGS LIMITED – ASX QUB, SUNCORP GROUP LIMITED – ASX SUN, TREASURY WINE ESTATES LIMITED – ASX TWE, HEALTHSCOPE LIMITED – ASX HSO, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, WESFARMERS LIMITED – ASX WES, WOOLWORTHS LIMITED – ASX WOW, CHALLENGER LIMITED – ASX CGF, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MAINFREIGHT LIMITED, INTEGRAL DIAGNOSTICS LIMITED – ASX IDX, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, OIL SEARCH LIMITED – ASX OSH, SANTOS LIMITED – ASX STO, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, UNITED STATES. FEDERAL RESERVE BOARD

ANZ-Roy Morgan Australian Consumer Confidence down again to 113.2 (down 0.9pts)

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 19-Jan-16

The ANZ-Roy Morgan Consumer Confidence rating for Australia fell by 0.8 per cent to 113.2 in the week ended 17 January 2016, following a 1.9 per cent fall in the previous week. Further losses on the sharemarket amid ongoing concerns about China’s economic growth prospects are likely to have weighed on consumer confidence. The sub-index on the "economic outlook in the next 12 months" fell by 7.5 per cent, and it is now is now at its lowest level since Malcolm Turnbull became Prime Minister. Meanwhile, the sub-index on "finances compared to a year ago" rose by 8.6 per cent.

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

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

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

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

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