K: Financial and Insurance Services

Global mergers and acquisitions on track for best year ever

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 30 : 27-Oct-15

Citigroup notes that some $US3.1trn worth of mergers and acquisitions have been announced globally so far in 2015. Citigroup believes there is potential for 2015 to eclipse 2007 as the biggest calendar year on record in terms of global M&A activity. The Citigroup reports notes that M&A activity is 38 per cent higher than at the same time in 2014, including year-on-year growth of 54 per cent in Asia, central Eastern Europe and the Middle East.

CORPORATES
CITIGROUP INCORPORATED, ANHEUSER-BUSCH INBEV SA/NV, SABMILLER PLC, ROYAL DUTCH SHELL PLC, BG GROUP PLC, HJ HEINZ COMPANY, KRAFT FOODS INCORPORATED, BEACH ENERGY LIMITED – ASX BPT, DRILLSEARCH ENERGY LIMITED – ASX DLS, WOODSIDE PETROLEUM LIMITED – ASX WPL, OIL SEARCH LIMITED – ASX OSH, SANTOS LIMITED – ASX STO, SCEPTER PARTNERS, KING AND WOOD MALLESONS, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD

Some growth stocks overpriced, warns UBS

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 31 : 27-Oct-15

TPG Telecom and Domino’s Pizza Enterprises are among the companies that have been added to UBS Australia’s list of "quality growth" stocks. The stocks on this list delivered a total return of 21.5 per cent in the year to 14 October 2015, compared with a return of 10.2 per cent for the S&P/ASX 100 ex-resources index. David Cassidy of UBS notes that stocks on the firm’s list have a median price-earnings ratio of 20.5 times.

CORPORATES
UBS HOLDINGS PTY LTD, TPG TELECOM LIMITED – ASX TPM, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, CSL LIMITED – ASX CSL, WOOLWORTHS LIMITED – ASX WOW, WESFARMERS LIMITED – ASX WES, SEEK LIMITED – ASX SEK, DULUXGROUP LIMITED – ASX DLX, CARSALES.COM LIMITED – ASX CAR, RESMED INCORPORATED – ASX RMD, RAMSAY HEALTH CARE LIMITED – ASX RHC, COCHLEAR LIMITED – ASX COH, REA GROUP LIMITED – ASX REA, ASX LIMITED – ASX ASX, TATTS GROUP LIMITED – ASX TTS, TABCORP HOLDINGS LIMITED – ASX TAH, MACQUARIE WEALTH MANAGEMENT, HEALTHSCOPE LIMITED – ASX HSO, SONIC HEALTHCARE LIMITED – ASX SHL, COVER-MORE GROUP LIMITED – ASX CVO, BREVILLE GROUP LIMITED – ASX BRG, STANDARD AND POOR’S ASX 100 INDEX

Bank ‘power’ to protect $30b profits

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Original article by Shaun Drummond, Patrick Commins, Clancy Yeates, Joyce Moullakis
The Australian Financial Review – Page: 1 & 8 : 26-Oct-15

Some fund managers believe that Australian bank customers rather than shareholders are likely to bear the brunt of complying with new capital requirements. Australian Prudential Regulation Authority chairman Wayne Byres recently suggested that shareholders should expect a slightly lower return as a result of the new requirements. However, all four major banks have now lifted their variable mortgage loan interest rates. Meanwhile, the major banks are poised to post a combined profit in excess of $A30bn for 2014-15.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AURORA FUNDS MANAGEMENT LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BELL POTTER SECURITIES LIMITED, WATERMARK FUNDS MANAGEMENT PTY LTD, CITIGROUP PTY LTD, CONTANGO ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, CLYDESDALE BANK PLC, MACQUARIE GROUP LIMITED – ASX MQG, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED

CBA hike undercuts Westpac

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Original article by Jonathan Shapiro, Phillip Coorey, Clancy Yeates
The Australian Financial Review – Page: 1 & 9 : 23-Oct-15

The Commonwealth Bank will increase its standard variable mortgage interest rates for owner-occupiers and property investors by 15 basis points, to 5.60 per cent and 5.87 per cent respectively. The move has been criticised by federal Treasurer Scott Morrison and Opposition Leader Bill Shorten, and follows Westpac’s recent decision to lift its home loan rates by 20 basis points. The interest rate rises are in response to new capital requirements for the banking sector.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSSIE HOME LOANS LIMITED, RESERVE BANK OF AUSTRALIA

Medibank in sights after shock CEO exit

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Original article by Tim Binsted
The Australian Financial Review – Page: 23 & 30 : 22-Oct-15

Some eight per cent of Medibank Private shareholders voted against the health insurer’s remuneration report at its 2015 AGM. Meanwhile, Kieren Chidgey of Deutsche Bank has expressed surprise over the sudden decision of Medibank CEO George Savvides to step down in March 2016. A number of investors have said they should have been consulted about the departure of Savvides, who has been CEO for 14 years.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, DEUTSCHE BANK AG, VGI PARTNERS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG

Bank customers tipped to fix their mortgages

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 21-Oct-15

The fall in the two-year swap rate to just 1.9 per cent has prompted some smaller financial institutions to reduce their fixed mortgage interest rates in recent weeks. ME Bank’s John Caelli says the downturn in the swap rate may be due to renewed speculation about the timing of monetary policy changes in Australia and the US. Jessica Darnbrough of Mortgage Choice says more home loan borrowers may opt for a fixed interest rate in the wake of Westpac’s move to lift its variable rates.

CORPORATES
ME BANK, MORTGAGE CHOICE LIMITED – ASX MOC, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF WESTERN AUSTRALIA LIMITED, NEWCASTLE PERMANENT BUILDING SOCIETY LIMITED, HERITAGE BANK LIMITED – ASX HBS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD

ANZ-Roy Morgan Australian Consumer Confidence – Westpac Interest Rate Rise Chips Away Confidence

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 20-Oct-15

The ANZ-Roy Morgan Consumer Confidence rating for Australia fell by two per cent to 113.3 in the week ended 18 October 2015, following a bounce of 5.1 per cent in the previous week. Westpac’s decision to increase its mortgage interest rates, combined with news flow around slowing momentum in the property market, is likely to have contributed to the fall in confidence. The decline in confidence was broad-based. Of note, consumers’ views towards whether now is a "good time to buy a major household item" fell by 3.1 per cent. This sub-index is now 7.9 per cent below its long-run average.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, PROPERTY COUNCIL OF AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA

Westpac shares climb after capital raising, rate increase

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Original article by Clancy Yeates
The Australian Financial Review – Page: 1 & 10 : 20-Oct-15

Shares in Westpac closed three per cent higher at $A31.34 on 19 October 2015, after being in a trading halt for almost a week. Clime Investment Management’s John Abernethy suggests that short selling in the wake of a $A3.5bn capital raising may have been the main driver of Westpac’s share price rise, rather than its move to lift mortgage interest rates by 0.2 per cent. Morningstar’s David Ellis says rival banks are likely to increase their own home loan rates.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CLIME INVESTMENT MANAGEMENT LIMITED – ASX CIW, MORNINGSTAR PTY LTD, WATERMARK FUNDS MANAGEMENT PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, ALPHINITY INVESTMENT MANAGEMENT PTY LTD

Diversify call to super funds

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 17 : 19-Oct-15

Australian superannuation funds are forecast to have some $US2.5trn ($A3.4trn) worth of assets under management by 2020, compared with $A2bn at the end of March 2015. Itay Tuchman of Citigroup says the strong growth in assets under management in coming years will require super funds to further expand the range of international asset classes in which they invest. Meanwhile, Tuchman says Westpac’s move to increase its mortgage interest rates will strengthen the case for a further reduction in the cash rate.

CORPORATES
CITIGROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, JP MORGAN AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIANSUPER PTY LTD, IFM INVESTORS PTY LTD, INDIANA TOLL ROAD CONCESSION COMPANY, CANADA PENSION PLAN INVESTMENT BOARD

Small lenders likely to follow majors up

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Original article by Shaun Drummond
The Australian Financial Review – Page: 17 : 16-Oct-15

Australia’s other three major banks have not yet increased their home loan interest rates in response to Westpac’s move. Bendigo & Adelaide Bank CEO Mike Hirst has indicated that the regional bank may increase its mortgage rates if the other "big three" do so, while Suncorp Bank, CUA and Firstmac may do so as well. Suncorp reduced its interest rates on some home loans on the same day that Westpac announced its rate increase.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, SUNCORP BANK, SUNCORP GROUP LIMITED – ASX SUN, CREDIT UNION AUSTRALIA LIMITED, FIRSTMAC LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA