K: Financial and Insurance Services

Citi, ANZ price forecast grim for high-cost iron ore

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Original article by Amanda Saunders
The Australian Financial Review – Page: 28 : 12-Nov-14

The ANZ Bank’s Mark Pervan doubts that the iron ore price will return to $US100 per tonne, and forecasts that the steel input will trade at $US78/tonne in 2015. Citigroup expects the iron ore price to trade at $US65/tonne in 2015 and 2016. The firm has downgraded its recommendation on Atlas Iron and Mount Gibson Iron stock from "neutral" to "sell", and Fortescue Metals Group has been downgraded from "buy" to "neutral"

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIGROUP PTY LTD, ATLAS IRON LIMITED – ASX AGO, MOUNT GIBSON IRON LIMITED – ASX MGX, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP

Banks slow on MySuper switch

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Original article by Andrew White
The Australian – Page: 21 : 11-Nov-14

A new Rainmaker Information study for Industry Super Australia (ISA) shows that retail superannuation funds owned by the major banks have been tardy in moving customers into new low-fee default products. Under the MySuper regulations the switch must occur by mid-2017, but the retail funds have been only half as quick to comply as their rival industry super funds. ISA CEO David Whitely notes this is generating additional fee income for the banks. The submission by his body to the Australian Government’s financial system review also argues that banks should be banned from bundling banking and super products

CORPORATES
INDUSTRY SUPER AUSTRALIA PTY LTD, RAINMAKER INFORMATION SERVICES PTY LTD, FINANCIAL SERVICES COUNCIL, BT FINANCIAL GROUP PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. FAIR WORK COMMISSION

Former Ten chief Grant Blackley linked to US private equity bid

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Original article by Darren Davidson
The Australian – Page: 19 : 11-Nov-14

Ten Network and its advisor, investment banking firm Citi, are holding talks with potential takeover suitors. The free-to-air TV group may be taken private, and there is speculation that a possible bid by US-based private equity firm Hellman & Friedman also involves ex-Ten CEO Grant Blackley. The most likely acquirers however remain Australian pay-TV provider Foxtel and US ally Discovery Communications. Any purchaser of Ten will require the support of current board members and 40% shareholders Lachlan Murdoch, James Packer, Gina Rinehart and Bruce Gordon

CORPORATES
TEN NETWORK HOLDINGS LIMITED – ASX TEN, DISCOVERY COMMUNICATIONS INCORPORATED, FOXTEL MANAGEMENT PTY LTD, NEWS CORPORATION – ASX NWS, NEWS CORP AUSTRALIA PTY LTD, CROWN RESORTS LIMITED – ASX CWN, WIN CORPORATION PTY LTD, CITIGROUP PTY LTD, HELLMAN AND FRIEDMAN CAPITAL PARTNERS, FAIRFAX MEDIA LIMITED – ASX FXJ, TOURANG LIMITED, CONSOLIDATED PRESS HOLDINGS LIMITED, RGM ARTISTS PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, TIME WARNER (AUSTRALIA) PTY LTD, TIME WARNER INCORPORATED

Insurance warning on Airbnb rental

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Original article by Mitchell Bingemann
The Australian – Page: 5 : 11-Nov-14

Online sharing services such as Airbnb for holiday homes and Uber for cars are becoming increasingly popular with Australian consumers. However, those considering agreements under which they provide their properties or vehicles have been warned by the Insurance Council of Australia to check with the provider of their policy. CEO Rob Whelan notes that their cover may not extend to public liability

CORPORATES
INSURANCE COUNCIL OF AUSTRALIA LIMITED, AIRBNB AUSTRALIA PTY LTD, AIRBNB INCORPORATED, UBER TECHNOLOGIES INCORPORATED, VICTORIA. TAXI SERVICES COMMISSION

Outlook for deals healthy as vendors eye valuations

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 17 : 11-Nov-14

Data from Dealogic shows that Australian companies have been involved in $US77.3bn ($A89.1bn) worth of mergers and acquisitions so far in 2014, which is nine per cent higher than previously. Meanwhile, a new report from Grant Thornton forecasts further growth in mergers and acquisitions activity in the next 12 months, following 105 deals in the 18 months to 30 June 2014

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, GRANT THORNTON AUSTRALIA, UBS HOLDINGS PTY LTD, GRESHAM PRIVATE EQUITY LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

$A fall attracts Chinese buyers

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Original article by Samantha Hutchinson
The Australian Financial Review – Page: 4 : 11-Nov-14

Property investors in China are capitalising on the nine per cent fall in the value of the Australian dollar to buy into the domestic property market. Peter Li of CBRE notes that a lot of Chinese investors are opting to buy higher-priced apartments, as they have become more affordable due to the currency’s recent weakness. Jock Langley of real estate firm Abercrombys notes that may expatriate Australians are taking advantage of the lower dollar to buy into the property market

CORPORATES
CBRE PTY LTD, ABERCROMBYS REAL ESTATE PTY LTD, COMPASS GLOBAL MARKETS PTY LTD, OZFOREX GROUP LIMITED – ASX OFX

Fund’s bid to cut costs, lift returns

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Original article by Andrew White
The Australian – Page: 19 : 10-Nov-14

The 2014 annual report of industry superannuation fund AustralianSuper shows growth in investment income from $A2.08bn to $A2.9bn and funds under management from $A65bn to $A78bn. Head of equities Innes McKeand also notes that $A8.8bn of the latter has been reallocated to internal managers during the past year, with a target of around $A40bn by 2019. At the moment, all overseas equities are still managed by external providers, such as MFS Institutional Investors, Baillie Gifford Overseas and State Street Global Advisers

CORPORATES
AUSTRALIANSUPER PTY LTD, MFS INSTITUTIONAL ADVISORS (AUSTRALIA) LIMITED, BAILLIE GIFFORD AND COMPANY, STATE STREET GLOBAL ADVISORS AUSTRALIA LIMITED, IFM INVESTORS PTY LTD, ISPT PTY LTD, PERPETUAL LIMITED – ASX PPT, FIL INVESTMENT MANAGEMENT LIMITED, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, AIRLIE FUNDS MANAGEMENT PTY LTD, BENTHAM ASSET MANAGEMENT PTY LTD, PORT BOTANY, PORT KEMBLA, QUEENSLAND MOTORWAYS LIMITED, TRANSURBAN GROUP LIMITED – ASX TCL

‘Overvalued’ $A tipped to nosedive to US75c

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Original article by Bianca Hartge-Hazelman, Mark Mulligan
The Australian Financial Review – Page: 24 : 10-Nov-14

The Australian dollar is currently trading at around $US0.8623, but some economists are bearish about its outlook in 2015. David McDonald of Credit Suisse Private Banking suggests that a level of around $US0.75 may be closer to fair value for the currency in the longer-term. Meanwhile, AMP Capital’s Shane Oliver forecasts that the currency will fall to $US0.75 in 2015, while National Australia Bank expects it to fall to around $US0.80

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, AMP CAPITAL INVESTORS LIMITED, AMP LIMITED – ASX AMP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, AUSTRALIAN BUREAU OF STATISTICS

Ten brass to discuss bid by US media giant

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Original article by Dominic White, Jared Lynch, James Chessell
The Australian Financial Review – Page: 13/18 : 7-Nov-14

Investment banking firm Citi will advise Ten Network on bids by potential takeover suitors. Negotiations will start on 10 November 2014, and the most likely acquirer of the free-to-air TV group appears to be an alliance of pay TV provider Foxtel and US ally Discovery Communications. The speculation on 6 November lifted Ten’s share price by 7% to a close of $A0.23. Fairfax Media had also discussed a deal with Ten’s executives in October, but is now not expected to pursue the opportunity

CORPORATES
TEN NETWORK HOLDINGS LIMITED – ASX TEN, FAIRFAX MEDIA LIMITED – ASX FXJ, FOXTEL MANAGEMENT PTY LTD, DISCOVERY COMMUNICATIONS INCORPORATED, CITIGROUP PTY LTD, NEWS CORPORATION – ASX NWS, NEWS CORP AUSTRALIA PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, CROWN RESORTS LIMITED – ASX CWN, WIN CORPORATION PTY LTD, DEUTSCHE BANK AG, ANCHORAGE CAPITAL PARTNERS PTY LTD, PROVIDENCE EQUITY PARTNERS INCORPORATED

Birth of municipal bond market for local councils

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Original article by James Eyers
The Australian Financial Review – Page: 17 : 7-Nov-14

Thirty of the 79 local councils in Victoria will join forces to issue $A200m worth of bonds via the Local Government Funding Vehicle, which has an "Aa2" rating from Moody’s Investors Service. The councils will offer both five- and seven-year notes, which will be priced on 7 November 2014. However, the indicative pricing margins are lower than those of the major banks

CORPORATES
LOCAL GOVERNMENT FUNDING VEHICLE, MOODY’S INVESTORS SERVICE INCORPORATED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ