K: Financial and Insurance Services

Super fund satisfaction near record highs in June with HESTA the top fund ahead of Cbus and Unisuper

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Jul-21

New data from Roy Morgan’s Superannuation Satisfaction Report shows an overall super fund satisfaction rating of 71.7% in June 2021 – an increase of 8.6% points from June 2020, and up 6.9% points over the last six months. The rating for June is just below the record high reached a month ago and continues a series of excellent customer satisfaction ratings over the first half of 2021 as the Australian economy recovered and Australian stock markets reached new record highs. HESTA has the highest customer satisfaction rating among Industry Funds, ahead of Cbus, UniSuper, AustralianSuper and Catholic Super. The highest placed Retail Super Fund is OnePath, followed by Colonial First State, MLC and ASGARD. The strong performance of the stock market during the first half of 2021 has helped drive customer satisfaction in Industry Funds to a new record high in June 2021 of 72.3%, up 8.2% points on a year ago. Customer satisfaction is also near record highs for Public Sector Funds at 79.7% in June (up 7.6% points on a year ago), and satisfaction Retail Funds is at 67.8% (up 9.7% points on a year ago). However, the highest customer satisfaction is again for Self-Managed Funds at 80.6%, which have experienced the largest increase of 10.7% points from a year ago. The report’s findings are from Roy Morgan Single Source, Australia’s most trusted consumer survey, compiled by in-depth interviews with over 50,000 Australians each year.

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ROY MORGAN LIMITED

Regulate Apple Pay, says CBA

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 22 : 28-Jul-21

Commonwealth Bank CEO Matt Comyn appeared before the parliamentary joint committee on corporations and financial services on 27 July. He told the committee that Apple Pay is now an essential service in the payments system and should therefore be subject to greater regulation, given that access to the iPhone’s near-field communication chip is restricted solely to Apple’s own digital wallet. Tom Leuner from the Australian Competition & Consumer Commission also noted that restrictions on access to the chip could potentially raise competition concerns. Some 9,000 banks worldwide now use Apple Pay, including Australia’s four major banks.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. PARLIAMENTARY JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL SERVICES, APPLE INCORPORATED, APPLE PAY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

RBA may rethink tapering as lockdowns bite

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Original article by David Rogers
The Australian – Page: 19 : 21-Jul-21

The Reserve Bank of Australia recently signalled that it will begin scaling back its bond-buying program in September, amid the nation’s stronger-than-expected economic recovery from the COVID-19 pandemic. However, economists at a number of banks anticipate that the potential economic impact of the latest wave of lockdowns will prompt the central bank to delay plans to slash its bond-buying program by $1bn a week. Gareth Aird from the Commonwealth Bank says the RBA could potentially start to reduce its bond purchases in November.

CORPORATES
RESERVE BANK OF AUSTRALIA, COMMS GROUP LIMITED – ASX CCG

SMEs squirrel away cash in crisis: ANZ

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Original article by Jared Lynch
The Australian – Page: 13 & 16 : 19-Jul-21

ANZ Bank’s CEO Shayne Elliott says the amount of cash held in bank deposits has surged during the last year, with small businesses and consumers opting to save during the COVID-19 pandemic. He notes that small businesses in particular are opting to save at an "unprecedented rate", adding that this trend could have a slight negative impact on the national economy. However, Elliott says increased savings means that small businesses are in a much stronger position during the current lockdowns compared with 2020.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

NAB eyes Citi’s retail in $2b deal

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Original article by James Eyers
The Australian Financial Review – Page: 18 : 14-Jul-21

National Australia Bank has emerged as a potential buyer of Citigroup’s local consumer banking business. NAB has advised that it is holding talks with Citigroup but stresses that a deal may not eventuate. Citigroup has an 11 per cent share of Australia’s credit card market, making it the fifth-biggest player in the sector, while it holds $5.5bn worth of household deposits and some $6.6bn worth of home loans. Australian Competition & Consumer Commission chairman Rod Sims recently indicated that it would closely scrutinise any bid for the Citigroup assets by one of the nation’s major banks.

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NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CITIGROUP PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Banks brace for lockdown losses

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Original article by Joyce Moullakis
The Australian – Page: 13 & 17 : 14-Jul-21

Richard Wiles of Morgan Stanley expects Australia’s major banks to announce combined coronavirus-related loan impairment charges of $700m for the June quarter. Wiles adds that the COVID-19 lockdown in Greater Sydney is likely to prompt the banks to adopt a more conservative approach to making provisions for loan losses. Morgan Stanley also expects loss rates to increase in the second half of 2021 and the first six months of 2022.

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MORGAN STANLEY AUSTRALIA LIMITED

Resources set to drive ASX to 8000 at year’s end

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Original article by William McInnes
The Australian Financial Review – Page: 28 : 9-Jul-21

Mike Aked of global investment manager Research Affiliates says Australia’s benchmark S&P/ASX 200 Index could rise above 8,000 points by the end of 2021. He expects the resources sector to drive the local market higher, on the back of the continued strength of commodity prices. Financial stocks have been the main driver of the local bourse’s recent rally, although the materials sector has surged in the last several weeks amid a rebound in the prices of commodities such as iron ore and copper.

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STANDARD AND POOR’S ASX 200 INDEX, RESEARCH AFFILIATES LLC

Reserve Bank cools expectations of rise in interest rates

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Original article by David Rogers
The Australian – Page: 13 & 20 : 9-Jul-21

Reserve Bank of Australia governor Philip Lowe has downplayed speculation that it could begin tightening monetary policy in 2022. Lowe has told the Economics Society of Queensland that inflation must be "sustainably" within the RBA’s target range of 2-3 per cent before it will consider a rise in the official interest rate; he added that wage growth of at least three per cent is likely to be needed for inflation to reach the central bank’s target range, while wages growth is "materially" less than three per cent at present. George Tharenou of UBS expects the RBA to abandon its bond yield target in the second half of 2022, which would enable it to increase the cash rate in 2023.

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RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD

Investors bring forward rate rise expectations

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Original article by William McInnes
The Australian Financial Review – Page: 25 : 7-Jul-21

Marcel Thieliant of Capital Economics now expects the Reserve Bank of Australia to begin tightening monetary policy in early 2023, and he has flagged a cash rate of 0.75 per cent by the end of that year. RBA governor Philip Lowe has previously reiterated that interest rates are likely to remain at 0.1 per cent until at least 2024, but he indicated in a statement on 6 July that this is now merely its "central scenario" and the conditions that could justify a rate rise could be met earlier than this. Interest rate futures pricing also suggests that the cash rate could begin rising earlier than expected.

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CAPITAL ECONOMICS LIMITED, RESERVE BANK OF AUSTRALIA

AustralianSuper targets $500bn after stellar 20pc return

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Original article by Glenda Korporaal
The Australian – Page: 13 & 20 : 6-Jul-21

AustralianSuper’s balanced option has posted a return of 20.43 per cent for 2020-21, compared with just 0.52 per cent in the previous financial year. The industry superannuation fund now boasts assets of $225m, and CEO Mark Delaney says it expects this to top $470bn by 2026. He adds that while equities are likely to perform well in 2021-22, he does not expect super funds to match their returns for 2020-21. Meanwhile, AustralianSuper has secured a deal to acquire a 40 per cent stake in the Moorebank intermodal logistics facility in Sydney.

CORPORATES
AUSTRALIANSUPER PTY LTD