K: Financial and Insurance Services

‘Impact investors’ want tax breaks

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Original article by Sally Rose
The Australian Financial Review – Page: 20 : 9-Jun-15

STREAT provides training for about 125 disadvantaged people in Victoria each year. The social enterprise will be able to train 250 people each year when its new hospitality training facility in Melbourne is completed in around 18 months’ time. Social Ventures Australia, which helped to negotiate an $A2.5m loan for STREAT, has urged the Australian Government’s tax inquiry to provide tax breaks for so-called social impact investments.

CORPORATES
STREAT LIMITED, SOCIAL VENTURES AUSTRALIA LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Trade engagement push with Japan

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 9-Jun-15

Australia’s Assistant Treasurer Josh Frydenberg is visiting Japan with a delegation of financial services industry executives. Frydenberg will address a business lunch on 9 June 2015, and will argue that financial services groups in both nations should capitalise on the Japan-Australia Economic Partnership Agreement. He says the financial services industries in both countries can benefit from each other’s expertise.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, FINANCIAL SERVICES COUNCIL, PERPETUAL LIMITED – ASX PPT, MACQUARIE INVESTMENT MANAGEMENT LIMITED, MLC LIMITED, JAPAN. OFFICE OF THE PRIME MINISTER, BANK OF JAPAN, NIKKO ASSET MANAGEMENT GROUP, TYNDALL INVESTMENT MANAGEMENT LIMITED, THE DAI-ICHI MUTUAL LIFE INSURANCE COMPANY LIMITED, TAL LIMITED, MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED, AMP CAPITAL INVESTORS LIMITED, NIPPON LIFE INSURANCE COMPANY LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Citi finds value in 2015’s star stocks

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Original article by Vesna Poljak
The Australian Financial Review – Page: 23 : 5-Jun-15

Australia’s benchmark S&P/ASX 200 is currently trading on a price-earnings ratio of 16.5 times earnings forecasts. Citigroup has identified six stocks that continue to offer good value for investors: Macquarie Group, Harvey Norman, Lend Lease Group, Mirvac Group, IOOF Holdings and Incitec Pivot. Citigroup also nominates Woolworths, Metcash, QBE Insurance Group, Fletcher Building and Orica as stocks that could stage rebounds.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, LEND LEASE GROUP LIMITED – ASX LLC, MIRVAC GROUP – ASX MGR, IOOF HOLDINGS LIMITED – ASX IFL, INCITEC PIVOT LIMITED – ASX IPL, WOOLWORTHS LIMITED – ASX WOW, METCASH LIMITED – ASX MTS, QBE INSURANCE GROUP LIMITED – ASX QBE, FLETCHER BUILDING LIMITED – ASX FBU, ORICA LIMITED – ASX ORI, WESTPAC BANKING CORPORATION – ASX WBC, AMCOR LIMITED – ASX AMC, WESFARMERS LIMITED – ASX WES, APA GROUP – ASX APA, ASX LIMITED – ASX ASX, COMPUTERSHARE LIMITED – ASX CPU, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, ANSELL LIMITED – ASX ANN, PRIMARY HEALTH CARE LIMITED – ASX PRY

Default fund choice aired

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Original article by Sally Rose
The Australian Financial Review – Page: 21 : 4-Jun-15

The financial system inquiry concluded that Australian superannuation fees are too high, costing members about $A20bn a year. Inquiry chairman David Murray has told a conference of the need for increased competition in the sector in order to reduce fees, while Assistant Treasurer Josh Frydenberg has flagged possible changes to the default super fund regime to boost competition. However, industry and retail super fund executives disagree on whether such reforms will result in lower fees.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, COLONIAL FIRST STATE GROUP LIMITED, INDUSTRY FUND SERVICES PTY LTD, RICE WARNER ACTUARIES PTY LTD, GRATTAN INSTITUTE, COMMITTEE FOR SUSTAINABLE RETIREMENT INCOMES, ERNST AND YOUNG, AMP LIMITED – ASX AMP, CHALLENGER LIMITED – ASX CGF, DIMENSIONAL FUND ADVISORS

Soaring small caps perturb strategists

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Original article by Rose Powell, Patrick Commins
The Australian Financial Review – Page: 25 : 3-Jun-15

Australian-listed small-capitalisation industrial stocks have rallied since March 2015, while industrials in the S&P/ASX 50 have generally underperformed. Investor support for small-caps has been driven by factors such as an upturn in the sector’s return on equity (ROE), as well as a corresponding decline in ROE for larger stocks. Meanwhile, Matthew Ross of Goldman Sachs says valuations in the small-cap sector may have become stretched.

CORPORATES
GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 50 INDEX, STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, IPROPERTY GROUP LIMITED – ASX IPP, NEXTDC LIMITED – ASX NXT, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, TECHNOLOGY ONE LIMITED – ASX TNE, CORPORATE TRAVEL MANAGEMENT LIMITED – ASX CTD, INFOMEDIA LIMITED – ASX IFM, SIRTEX MEDICAL LIMITED – ASX SRX, ALTIUM LIMITED – ASX ALU, MANTRA GROUP LIMITED – ASX MTR, TFS CORPORATION LIMITED – ASX TFC

Buy shares, not bonds, says Morgan Stanley

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Original article by Rose Powell
The Australian Financial Review – Page: 23 : 2-Jun-15

Morgan Stanley forecasts that Australian shares will deliver a return of 5.8 per cent over the next 12 months and 10.3 per cent in the longer-term. Meanwhile, the firm expects international shares to achieve a short-term return of 15.4 per cent and 10.3 per cent in the long-term. However, Morgan Stanley is bearish about the outlook for Australian bonds and global sovereign bonds.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, AMP CAPITAL INVESTORS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, PERPETUAL LIMITED – ASX PPT

Grim GDP figures may mean further rate cuts

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Original article by Vesna Poljak
The Australian Financial Review – Page: 18 : 2-Jun-15

The general expectation of economists is that Australia recorded GDP growth of about 0.6 per cent in the March 2015 quarter. However, Citigroup has forecast real GDP growth of just 0.5 per cent, while Damien Boey of Credit Suisse says there is the potential for GDP on a nominal basis to contract in the first two quarters of calendar 2015. Boey says the GDP outlook may prompt the Reserve Bank to further reduce the cash rate in the near-term.

CORPORATES
CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL RESERVE BANK OF ATLANTA

Insurer’s premiums cast cloud

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Original article by Tim Binsted
The Australian Financial Review – Page: 18 : 1-Jun-15

Morgan Stanley’s Daniel Toohey values Medibank Private shares at $A1.85, compared with the issue price of $A2 for retail investors in the 2014 IPO. Morgan Stanley forecasts that Medibank’s lapse rate will rise from 10 per cent to 15 per cent, while Toohey says the growth of its budget-priced ahm brand may come at the expense of the main brand’s customer base. Medibank’s earnings are also likely to be affected by customers opting to reduce their health insurance coverage in order to save money.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, AHM HEALTH INSURANCE, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE SECURITIES PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, DEUTSCHE BANK AG, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD

Mercer revives independent director debate

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Original article by Sally Patten
The Australian Financial Review – Page: 19 : 1-Jun-15

A new report from Mercer has called for Australian superannuation funds to have more independent directors. The firm says this trend is gathering pace in many developed countries, which has also been noted by the OECD. The Australian Government is tipped to outline its policy on the issue later in 2015, and Assistant Treasurer Josh Frydenberg is believed to favour a requirement for at least 33 per cent of a super fund’s directors to be independent.

CORPORATES
MERCER INVESTMENTS PTY LTD, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, GREAT BRITAIN. FINANCIAL CONDUCT AUTHORITY

Chi-X issues new challenge to ASX

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Original article by Shaun Drummond, Jonathan Shapiro
The Australian Financial Review – Page: 19 : 1-Jun-15

Stock exchange operator Chi-X Australia will begin offering warrants trading later in 2015, entering a market that has been shunned in recent years. Chi-X CEO John Fildes notes that just one company currently issues warrants in Australia, and blames ASX Limited’s high fees. Chi-X also plans to allow equities to be traded for an additional eight minutes after the official close of trading, while it will begin offering exchange-traded funds in 2016.

CORPORATES
CHI-X AUSTRALIA PTY LTD, ASX LIMITED – ASX ASX, MACQUARIE GROUP LIMITED – ASX MQG, STOXX, DEUTSCHE BOERSE, SWISS STOCK EXCHANGE