K: Financial and Insurance Services

Banks’ commercial exposure rises

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Original article by Matthew Cranston
The Australian Financial Review – Page: 38 : 1-Jun-15

The total value of Australia’s four largest banks’ commercial property portfolios increased by 6.5 per cent to $A202.3bn in the year to March 2015. This includes some $A70.3bn worth of office properties. The Reserve Bank’s latest Financial Stability Review highlighted the potential risk of revaluations in the sector, although Brian Johnson of CLSA argues that the banks’ exposure to commercial property development is the main factor to consider.

CORPORATES
RESERVE BANK OF AUSTRALIA, CLSA AUSTRALIA PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Macquarie, Domino’s top in M&A value

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 23 : 29-May-15

Intralinks and the Cass Business School have released a report which examined more than 265,000 mergers and acquisitions deals globally over two decades. Some 82 of the companies that were regarded as being excellent corporate portfolio managers are based in Australia. They include Macquarie Group, Domino’s Pizza Enterprises, M2 Group, Challenger and the ANZ Bank.

CORPORATES
INTRALINKS INCORPORATED, CASS BUSINESS SCHOOL, CITY UNIVERSITY, LONDON, MACQUARIE GROUP LIMITED – ASX MQG, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, M2 GROUP LIMITED – ASX MTU, CHALLENGER LIMITED – ASX CGF, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, RETAIL FOOD GROUP LIMITED – ASX RFG, SILVER LAKE RESOURCES LIMITED – ASX SLR, DOMINO’S PIZZA JAPAN INCORPORATED, TERRA FIRMA CAPITAL PARTNERS LIMITED, DELAWARE INVESTMENTS, FOX-PITT KELTON COCHRAN CARONIA WALLER LLC

AGL, New Hope to take hit from Norway divestment

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Original article by Ben Potter
The Australian Financial Review – Page: 23 : 29-May-15

Norway’s Government Pension Fund Global exited the share register of Whitehaven Coal in 2014, following a government directive to terminate its exposure to the coal sector. The Norwegian Government now wants the sovereign wealth fund to divest shares in electricity companies that have a high exposure to coal-fired generation and mining companies whose revenues are heavily weighted toward thermal coal. This could force it to offload shares in AGL Energy and New Hope Corporation.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, NEW HOPE CORPORATION LIMITED – ASX NHC, WHITEHAVEN COAL LIMITED – ASX WHC, GOVERNMENT PENSION FUND GLOBAL (NORWAY), BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, SOUTH32 LIMITED – ASX S32, MACQUARIE GENERATION, LOY YANG A, YANCOAL AUSTRALIA LIMITED – ASX YAL, COKAL LIMITED – ASX CKA, COCKATOO COAL LIMITED – ASX COK, AXA SA, OXFORD UNIVERSITY, CLIMATE INSTITUTE (AUSTRALIA) LIMITED

Gina drops a lazy $6 billion, but she’s still atop the pile as our richest person

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Original article by John Stensholt
The Australian Financial Review – Page: 1 & 6 : 29-May-15

The personal wealth of iron ore magnate Gina Rinehart is estimated to be $A14.02bn in the latest "BRW" Rich List. Her wealth has fallen by $A5.99bn since 2014, but she remains the wealthiest individual in Australia. Visy Industries’ Anthony Pratt and Meriton’s Harry Triguboff round out the top three, with estimated wealth of $A10.76bn and $A10.23bn respectively. The 2015 Rich List features 49 billionaires, compared with 39 in 2014.

CORPORATES
VISY INDUSTRIES AUSTRALIA PTY LTD, MERITON APARTMENTS PTY LTD, PRATT INDUSTRIES (USA) INCORPORATED, WESTFIELD CORPORATION – ASX WFD, SCENTRE GROUP – ASX SCG, LOWY FAMILY GROUP, SHIMAO PROPERTY HOLDINGS LIMITED, UNIVERSITY OF SOUTH AUSTRALIA, PLATINUM ASSET MANAGEMENT LIMITED – ASX PTM, CROWN RESORTS LIMITED – ASX CWN, FORTESCUE METALS GROUP LIMITED – ASX FMG

ANZ-Roy Morgan Singapore Consumer Confidence Rose in May

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 28-May-15

The monthly ANZ-Roy Morgan Singapore Consumer Confidence Index rose by four points to 129.7 in May 2015. Consumer confidence is now clearly above its long-term average of 122.2. The rise was driven by greater confidence across all components of the survey. The number of respondents who said their family is "better off" financially compared with a year ago has risen by two per cent to 31 per cent. Meanwhile, the number of respondents who expect Singapore to have "good times" financially over the next 12 months has risen by two per cent to 51 per cent.

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

Stock index ‘loaded with risk’

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 20 : 27-May-15

The head of Australian equities at Lazard, Rob Osborn, is concerned about the S&P/ASX 200’s weighting toward banks. The sector comprised nearly 42 per cent of the benchmark index in March 2015, and Osborn notes that one sector has had a significant weighting in the index on just two other occasions in the last 15 years – the technology boom in 2000 and the resources boom in 2008. In both instances a correction resulted in these sectors falling sharply. Meanwhile, bank stocks have fallen by nearly 10 per cent since March.

CORPORATES
LAZARD PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, DAVNET LIMITED, ECORP LIMITED, NEWS CORPORATION – ASX NWS

ANZ-Roy Morgan Consumer Confidence Holds Recent Gains

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 26-May-15

The ANZ-Roy Morgan Consumer Confidence rating for Australia fell by 1.0 per cent to 113.5 in the week ended 24 May 2015, following strong growth in the previous fortnight. Confidence has been trending above its long-run average for two continuous weeks, following a five-month run of below average growth. Confidence remains 14.3 per cent higher than the level for the same time in 2014. The sub-index for households’ finances in the next year has risen by 2.7 per cent, although the sub-index for expectations of the economic outlook in the next year fell by 5.3 per cent.

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

Westpac nabs CBA’s Cobley for top role

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Original article by James Chessell, Sarah Thompson, James Eyers
The Australian Financial Review – Page: 18 : 27-May-15

Westpac has announced that Lyn Cobley will succeed Rob Whitfield as the head of its institutional banking division. Cobley is currently the head of retail products and third-party banking at the Commonwealth Bank of Australia (CBA). She had previously worked for groups such as Barclays Capital and Citigroup, and was regarded as a potential successor to CBA CEO Ian Narev. Whitfield will step down on 10 July 2015, after nearly three decades at Westpac.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BARCLAYS CAPITAL SECURITIES LIMITED, CITIGROUP PTY LTD, ERNST AND YOUNG, TRADINGROOM PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, FAIRFAX MEDIA LIMITED – ASX FXJ, WESTPAC INSTITUTIONAL BANK, ST GEORGE BANK LIMITED

Low rates, yields to hit Suncorp, IAG

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Original article by Ruth Liew
The Australian Financial Review – Page: 18 : 26-May-15

The earnings of Australian-listed insurance companies are likely to be affected by low interest rates and bond yields. Investment income accounts for around 40 per cent of QBE Insurance Group’s profits, compared with 25 per cent in the case of Insurance Australia Group (IAG) and Suncorp. IAG CEO Mike Wilkins says most of the company’s insurance book comprises "short tail risk".

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SUNCORP GROUP LIMITED – ASX SUN, CREDIT SUISSE (AUSTRALIA) LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Banks, miners tipped for drop

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Original article by Tim Binsted
The Australian Financial Review – Page: 29 : 26-May-15

Credit Suisse notes that Australian-listed companies’ dividend payout ratios are at their highest levels in more than two decades. Richard Hitchens of Credit Suisse notes that investors recently sold down bank stocks after their interim dividends were lower than expected. He adds that groups such as Aurizon, GPT Group and Santos may also find it hard to increase their dividends.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, AURIZON HOLDINGS LIMITED – ASX AZJ, GPT GROUP – ASX GPT, SANTOS LIMITED – ASX STO, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, TELSTRA CORPORATION LIMITED – ASX TLS, DEUTSCHE BANK AG, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK