K: Financial and Insurance Services

Goldman sees value as ASX faces worst month since 2012

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The Australian Financial Review – Page: 22 : 21-Aug-15

Goldman Sachs equity strategist Matthew Ross believes Australian stocks are now cheap by historical standards. The banks are particularly attractive as they are now trading on a forward price-earnings (PE) ratio of 12.5 times, compared with the industrial PE of 17.5 times earnings. Technical analysis of the Australian stock market suggests that the S&P/ASX 200 index can rise as much as 28 per cent from its current level.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX

Reserve Bank calls out big banks on high credit card profits

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Original article by Shaun Drummond
The Australian Financial Review – Page: 21 : 20-Aug-15

The Reserve Bank of Australia says interest rates on credit cards, which spiked after the global financial crisis, have remained high despite the fall in the cash rate since then. Advertised rates have risen from 16 per cent eight years ago to about 20 per cent on standard credit cards. It is estimated the "spread" the banks earn on cards above the cost of funding them has risen from about six percentage points in 2007 to nine in the March quarter of 2015.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RETAIL FINANCE INTELLIGENCE PTY LTD

Australian dollar wobbles on new China volatility

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 26 : 20-Aug-15

The Australian dollar was trading at $US0.7333 in late trade on 18 August 2015. The Australian currency is under pressure because of weak commodity prices. Copper and aluminium prices have fallen to their lowest levels in six years. National Australia Bank global co-head of foreign exchange strategy Ray Attrill says the Australian dollar usually moves in the same direction as the currencies of Asia’s emerging economies.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, UNITED STATES. FEDERAL RESERVE BOARD, SAXO CAPITAL MARKETS (AUSTRALIA) PTY LTD

QBE also anti-intervention while dividend higher, profit up 24pc

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Original article by Ruth Liew
The Australian Financial Review – Page: 19 : 19-Aug-15

QBE Insurance Group has reported a 24 per cent rise in its first-half net profit to $US488 million ($A661 million). The group will raise its dividend payout ratio from the current level of 50 per cent of annual cash profits to 65 per cent in 2016. Announcing the results on 18 August 2015, QBE CEO John Neal spoke against the idea of government interference in Northern Australia’s insurance market. Exposure to a high risk of natural disasters in the region makes insurance cover expensive to residents.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, SUNCORP GROUP LIMITED – ASX SUN, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, NATIONAL GENERAL HOLDINGS CORPORATION, NIKKO ASSET MANAGEMENT GROUP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Transfield dumped in human rights protest

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Original article by Sally Rose
The Australian Financial Review – Page: 3 : 19-Aug-15

Superannuation fund HESTA has sold its three per cent stake in Transfield Services because of concerns about risks associated with the group’s management of the offshore detention centres on Manus Island and Nauru. HESTA manages super savings of doctors, nurses, and other workers in the healthcare and community services sectors. Many of its members are concerned about reports of mismanagement in offshore detention centres.

CORPORATES
HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED, TRANSFIELD SERVICES LIMITED – ASX TSE, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED

Super tax breaks ‘lurks for the rich’

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Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 19-Aug-15

The Grattan Institute advocates a review of superannuation tax breaks, negative gearing and the capital gains tax discount which, the institute says, are used mainly by rich Australians. The institute states in a paper to be presented at the National Reform Summit that wealthy Australians do not need tax incentives; they would save for retirement without them.

CORPORATES
GRATTAN INSTITUTE, THE MENZIES RESEARCH CENTRE LIMITED, THE CENTRE FOR INDEPENDENT STUDIES LIMITED

Aussie dollar steadies amid fears of limited future gains

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 28 : 18-Aug-15

The Australian dollar was trading at $US0.7374 in late trade on 17 August 2015. UBS economist George Tharenou expects the local currency to continue to be under pressure due to weak commodity prices. He says the Australian dollar is likely to decline to $US0.70 by the end of 2015.

CORPORATES
UBS HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, OZFOREX GROUP LIMITED – ASX OFX, GOLDMAN SACHS AUSTRALIA PTY LTD

NAB puts 40 postcodes on credit watch

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Original article by James Eyers
The Australian Financial Review – Page: 8 : 18-Aug-15

National Australia Bank has identified 40 postcodes where loan applications are scrutinised more thoroughly because of higher risk of default. David Gall, chief risk officer of National Australia Bank, says rising interest rates and unemployment have made certain localities more vulnerable to economic stress. According to Digital Finance Analytics, risky localities include Kambah in Canberra, Grasstree Hill and Honeywood in South Tasmania, and Leigh Creek and Lyndhurst in South Australia.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DIGITAL FINANCE ANALYTICS

Westpac takes tougher line on interest-only mortgages

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Original article by Clancy Yeates
The Australian Financial Review – Page: 16 : 17-Aug-15

Westpac will apply new standards to interest-only mortgages. The bank told brokers that borrowers will now have to show that they will be able to service an interest-only loan after the interest-only period had ended. The bank will also reduce the maximum interest-only period for owner-occupier home loans from 15 years to 10 years.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, STANDARD AND POOR’S ASX 200 INDEX

Bank raisings satisfy capital requirements

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 14-Aug-15

Australia’s big four banks have asked shareholders for a combined $A8 billion in new capital. The banks need extra funds to meet new regulatory requirements. Credit Suisse analyst Jarrod Martin estimates that the banks need $A28 billion in total. Analysts believe that any further increases in capital requirements will be met through retained earnings and dividend reinvestment plans.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BELL POTTER SECURITIES LIMITED, DEUTSCHE BANK AG