K: Financial and Insurance Services

RBA forecast to lift rate for 10th straight time

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Original article by Cecile Lefort
The Australian Financial Review – Page: 23 : 6-Mar-23

Futures pricing suggests that Australian equities will gain 0.9 per cent when the market opens on Monday. The local bourse is expected to be bolstered by a positive lead from Wall Street, which rallied in response to the latest US economic data. Meanwhile, financial markets have priced in a 96 per cent chance that the Reserve Bank of Australia will increase the cash rate by 25 basis points to 3.6 per cent on Tuesday. However, most economists now expect the cash rate to peak at 3.85 per cent in the June quarter.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA

Openpay not the last BNPL failure

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Original article by David Swan
The Australian – Page: 15 : 8-Feb-23

Splitit CEO Nandan Sheth warns that more ‘buy now, pay later’ providers are likely to collapse, after Openpay was placed in the hands of receivers from McGrathNicol. Sheth contends that Openpay’s business model was "fundamentally flawed", and he is not surprised about the company’s demise. He notes that many BNPL providers focus on subprime consumers who may not have credit; he adds that Splitit uses a customer’s existing credit from a credit card issuer, while it deals with merchants rather than consumers. Openpay has retrenched about 80 employees and shut down its platform, and McGrathNicol is seeking a buyer for the company.

CORPORATES
OPENPAY GROUP LIMITED – ASX OPY, McGRATH NICOL AND PARTNERS SERVICES PTY LTD, SPLITIT PAYMENTS LIMITED – ASX SPT

Openpay collapses, shuts down platform as shares suspended

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Original article by David Swan
The Australian – Page: 13 & 17 : 7-Feb-23

Barry Kogan, Jonathan Henry and Rob Smith from McGrathNicol have been appointed as receivers and managers of Openpay. The ‘buy now, pay later’ provider has advised that customers will now longer be able to use its platform to make new purchases, although they must pay all outstanding balances. Openpay listed on the Australian sharemarket in 2019 following an IPO that raised $50m. Josh Gilbert of trading platform eToro says the BNPL sector has gone from "hero to zero" among investors in recent months. Rival BNPL provider Laybuy recently announced that it will delist.

CORPORATES
OPENPAY GROUP LIMITED – ASX OPY, McGRATH NICOL AND PARTNERS SERVICES PTY LTD, ETORO, LAYBUY GROUP HOLDINGS LIMITED – ASX LBY

Tax the rich to pay for parental leave contributions: HESTA

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Original article by Lucy Dean, Tom McIlroy
The Australian Financial Review – Page: 6 : 1-Feb-23

Industry superannuation fund HESTA has used its pre-Budget submission to urge the federal government to cap super fund balances at $5m. CEO Debby Blakey notes that balances of around $5m receive about $70,000 worth of tax concessions annually, which is more than many of HESTA’s members earn in a year. HESTA has also called for the threshold at which high-income earners pay more tax on super to be lowered from $250,000 a year to $180,000; Blakey says this would allow more money to be directed to the Commonwealth Parental Leave Pay scheme. She contends that Australia’s superannuation system has a "persistent gender blind spot" that must be addressed. Some 80 per cent of HESTA’s members are women.

CORPORATES
HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED

Cost of living crisis drives vulnerable Australians to buy now, pay later schemes, consumer groups say

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Original article by Jordyn Beazley
The Guardian Australia – Page: Online : 25-Jan-23

‘Buy now, pay later’ providers are continuing to attract scrutiny, amid a growing push for greater regulation of the sector. The federal government outlined three potential options in late 2022 for regulating the sector, but consumer groups contend that regulating BNPL as traditional credit products is the only one of the options that would provide sufficient protection for consumers. Shungu Patsika from the National Debt helpline says the number of people with BNPL debts has risen significantly since Christmas; he notes that in the past it was mainly welfare recipients who contact the service for help, but a growing number of people with jobs are also doing so.

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S&P warns of climate credit risks

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Original article by David Ross
The Australian – Page: 15 : 18-Jan-23

S&P Global Ratings says the severity and frequency of bushfires and floods facing Australia is increasing. The firm has warned that the credit ratings of the nation’s banks, insurers, and state and local governments could potentially be downgraded if this trend continues. S&P Global Ratings adds that insurers face the greatest risk from weather-related events, given that they are set to experience two successive years of large losses.

CORPORATES
S&P GLOBAL RATINGS

Chalmers asks ACCC to probe deposit rates

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Original article by Ayesha de Kretser
The Australian Financial Review – Page: 12 & 15 : 11-Jan-23

Treasurer Jim Chalmers says consumers with savings accounts should consider switching banks to get a better deal, given that some banks still have low deposit interest rates despite eight increases in the cash rate during 2022. Chalmers contends that banks should treat their customers fairly with regard to savings accounts, and he has asked the Australian Competition & Consumer Commission to examine this issue in 2023. Analysis shows that smaller banks generally have much more competitive interest rates on deposit accounts than the nation’s four major banks.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Citi upgrades Australian, Euro stocks

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Original article by Alex Gluyas
The Australian Financial Review – Page: 27 : 10-Jan-23

Citigroup has upgraded its rating on Australian equities to ‘neutral’ and expects the benchmark S&P/ASX 200 to reach 7,400 points in 2023. Citi also cautions that there is downside risk to consensus earnings forecasts of four per cent for the calendar year. Meanwhile, Citi has upgraded its rating for European shares to ‘overweight’, but its recommendation on US shares has been downgraded to ‘underweight’.

CORPORATES
CITIGROUP INCORPORATED,STANDARD AND POOR’S ASX 200 INDEX

ACCC calls on banks in merger probe

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Original article by Joyce Moullakis
The Australian – Page: 13 & 16 : 4-Jan-23

The Australian Competition & Consumer Commission is currently assessing the ANZ Bank’s proposed deal to acquire Suncorp Group’s banking arm. Sources have indicated that the ACCC has requested information and data from the nation’s major and regional banks as part of the process, using its compulsory powers under the Competition and Consumer Act 2010. This information is said to include bank returns, net interest margins, funding costs and market share. The ACCC is seeking submissions on the ANZ deal by 18 January, and it aims to make a final decision on the transaction in June.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ,SUNCORP BANK,SUNCORP GROUP LIMITED – ASX SUN,AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Jury’s out on where to get best profit growth this year

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Original article by Alex Gluyas
The Australian Financial Review – Page: 12 & 16 : 4-Jan-23

The S&P/ASX 200 shed 5.5 per cent in 2022, ending the year at 7,038.7 points. Data from Bloomberg shows that energy, utilities and materials were the only sectors that posted gains for the calendar year. UBS equity strategist Richard Schellbach expects the benchmark index to end 2023 at 7,250 points, while AMP forecasts that it will finish the year at 7,600. In contrast, Credit Suisse expects the S&P/ASX 200 to retreat in 2023, ending the year at just 6,700.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX,BLOOMBERG LP,UBS HOLDINGS PTY LTD,AMP LIMITED – ASX AMP,CREDIT SUISSE (AUSTRALIA) LIMITED