K: Financial and Insurance Services

Stevens calls for US75c dollar

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Original article by Jacob Greber, Michael Stutchbury
The Australian Financial Review – Page: 1 & 10 : 12-Dec-14

The Australian dollar is currently trading at around $US0.83, but Reserve Bank governor Glenn Stevens believes that it needs to fall further. He argues that a more appropriate level for the currency would be about $US0.75, arguing that the decline in Australia’s terms of trade means the dollar needs to be lower. Stevens also says that the need for stability is a major reason why interest rates were kept on hold during 2014, and stresses that any further easing of monetary policy would need to has a positive effect on business and consumer confidence

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Murray inquiry calls for social investment

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 11-Dec-14

Impact Investing Australia has welcomed a call by David Murray, chairman of the inquiry into Australia’s financial system, for greater involvement of the private sector in social impact investing. Murray said the Australian Prudential Regulation Authority should develop a framework for impact investment by superannuation funds. Impact Investing Australia expects the impact investing market to grow to at least $A32 billion by 2025

CORPORATES
IMPACT INVESTING AUSTRALIA LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. DEPT OF THE TREASURY, BIG SOCIETY COUNCIL, SOCIAL VENTURES AUSTRALIA LIMITED, THE BENEVOLENT SOCIETY OF NEW SOUTH WALES

Vacuum cleaners keeping us recession-proof: Godfreys

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Original article by Simon Evans
The Australian Financial Review – Page: 19 : 11-Dec-14

Godfreys Group’s stock ended its first day of trading at $A2.85 on 10 December 2014, compared with an issue price of $A2.75. The vacuum cleaner retailer raised $A78m via an IPO, after scaling back plans for a $A103m raising. Godfreys chairman Rod Walker notes that the group’s sales are generally not affected by the economic outlook, as every home needs a vacuum cleaner

CORPORATES
GODFREYS GROUP LIMITED – ASX GFY, ARCADE FINANCE PTY LTD, NOMURA AUSTRALIA LIMITED, INVESTEC AUSTRALIA LIMITED, FREEDOM GROUP LIMITED, PACIFIC EQUITY PARTNERS PTY LTD, UNITAS CAPITAL PARTNERS PTY LTD, ACONEX LIMITED – ASX ACX

Property curbs pave way for RBA rate cuts

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 16 : 11-Dec-14

Martin Whetton of the ANZ Bank says the decision to implement measures aimed at curbing growth in loans for investment properties could lead a reduction in the cash rate. The bond market had anticipated such action by the Australian Prudential Regulation Authority, with the 10-year bond rate falling below three per cent and the three-year bond rate easing to 2.27 per cent

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COUNCIL OF FINANCIAL REGULATORS, RESERVE BANK OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, TRIPLE T CONSULTING LIMITED

Nation needs strong banks, Murray says

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Original article by Michael Bennet
The Australian – Page: 22 : 9-Dec-14

Among the recommendations made in the financial system review report by David Murray for the Australian Government is lifting the capital requirements for the main banks. Murray says the sector needs to be strong enough to withstand another financial crisis, and at the same time cannot rely on being saved by the Government. Estimates of the additional funds likely to be needed if the measures are adopted range from $A8bn to $A32bn. Investors on 8 December 2014 were unconcerned, with the share prices of the four major banks all rising

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, DEUTSCHE BANK AG, MERRILL LYNCH (AUSTRALIA) PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, MACQUARIE BANK LIMITED – ASX MBL, UBS HOLDINGS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN BANKERS’ ASSOCIATION

Majors facing $20bn squeeze

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Original article by Michael Bennet
The Australian – Page: 17 : 8-Dec-14

Among the recommendations made in the financial system review report by David Murray for the Australian Government is that the four main banks should significantly increase their reserve capital holdings. They are also urged to lift the risk weighting on home mortgage loans to a range of 25% to 30%. Analysts calculate that if adopted the new requirements will create an additional cost burden of $A20bn per annum for the sector. Australian Bankers’ Association CEO Steven Munchenberg has vowed to persist with its lobbying effort against the proposals and those of the Australian Prudential Regulation Authority

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN BANKERS’ ASSOCIATION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANK FOR INTERNATIONAL SETTLEMENTS. BASEL COMMITTEE ON BANKING SUPERVISION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, WATERMARK FUNDS MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, CREDIT SUISSE (AUSTRALIA) LIMITED, THE BOSTON CONSULTING GROUP PTY LTD

Refinancing allows Boart boss to focus on long term

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Original article by Paul Garvey
The Australian – Page: 18 : 8-Dec-14

Investors in Australian-listed mining services group Boart Longyear are set to vote on a refinancing deal worth as much as $US342m ($A410m) with US-based private equity firm Centerbridge in mid-December 2014. It will come as a relief to CEO Richard O’Brien, who has had to face a series of crises since being appointed on 1 April 2013. He still believes that a turnaround in the resources sector may not occur until possibly 2016, and urges shareholders to support the package deemed "not fair but reasonable" by consultant KPMG

CORPORATES
BOART LONGYEAR LIMITED – ASX BLY, CENTERBRIDGE PARTNERS LP, KPMG AUSTRALIA PTY LTD, CGI GLASS LEWIS PTY LTD, ISS PROXY AUSTRALIA

US80c to the dollar is ‘fair value’ for RBA

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 23 : 5-Dec-14

The Australian dollar reached a new 4.5-year low of $US0.8389 on 4 December 2014. Economists are divided regarding what constitutes fair value for the currency. Michael Workman of the Commonwealth Bank believes that a range of $US0.80 to $US0.85 is appropriate for the dollar at present. However, Bank of America Merrill Lynch’s Saul Eslake suggests that fair value would be below $US0.80

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ST GEORGE BANK LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, MACQUARIE GROUP LIMITED – ASX MQG, TD SECURITIES, UNITED STATES. FEDERAL RESERVE BOARD

Westpac breaks ranks to tip RBA will cut rates

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 8 : 5-Dec-14

Westpac chief economist Bill Evans expects official interest rates to be reduced in both February and March 2015, citing factors such as the latest GDP data and the high Australian dollar. National Australia Bank and ANZ Bank economists have indicated that they may revise their forecasts for interest rates to remain on hold until late 2015. Economists at Goldman Sachs, Deutsche Bank and Credit Suisse have already forecast that the Reserve Bank will cut the cash rate in 2015

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, RESERVE BANK OF AUSTRALIA, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, DEUTSCHE BANK AG, CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIA. DEPT OF THE TREASURY, UNITED STATES. FEDERAL RESERVE BOARD

Three-way fight for ailing Ten

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Original article by Darren Davidson
The Australian – Page: 19 : 4-Dec-14

Competing bids worth between $A510m and $A664m have been prepared for Australian free-to-air TV group Ten Network, which along with adviser Citigroup is seeking at least $A770m. Pay TV provider Foxtel and US-based ally Discovery Communications are one suitor, and interest has also been voiced by private equity firm Saban Capital Group and hedge fund Anchorage Capital Partners. They would need the approval of News Corporation co-chair Lachlan Murdoch, Crown Resorts chair James Packer and WIN Corporation owner Bruce Gordon

CORPORATES
TEN NETWORK HOLDINGS LIMITED – ASX TEN, FOXTEL MANAGEMENT PTY LTD, DISCOVERY COMMUNICATIONS INCORPORATED, SABAN CAPITAL GROUP INCORPORATED, ANCHORAGE CAPITAL PARTNERS PTY LTD, CITIGROUP PTY LTD, ASX LIMITED – ASX ASX, NEWS CORPORATION – ASX NWS, NEWS CORP AUSTRALIA PTY LTD, CROWN RESORTS LIMITED – ASX CWN, WIN CORPORATION PTY LTD, 21ST CENTURY FOX INCORPORATED, WALT DISNEY COMPANY, CVC ASIA PACIFIC (AUSTRALIA) PTY LTD, KOHLBERG KRAVIS ROBERTS AND COMPANY, KKR AND COMPANY LP, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SEVEN WEST MEDIA LIMITED – ASX SWM