K: Financial and Insurance Services

Westpac insurance sales misleading: ASIC

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 18 : 9-Apr-21

The Australian Securities & Investments Commission is taking legal action against Westpac in the Federal Court. ASIC claims that Westpac mis-sold credit card insurance to customers who did not want it, with more than 380 customers affected in a four-month period between April and July 2015. Westpac has stated that it will work with ASIC constructively through the court process, and that it has not sold credit card insurance since 2019. Credit card insurance came under scrutiny during the Hayne royal commission, and the big banks have stopped selling the product.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA

‘Ideology gone mad’: Silk slams super veto laws

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Original article by Cliona O’Dowd
The Australian – Page: 17 : 9-Apr-21

AustralianSuper CEO Ian Silk has criticised key elements of the federal government’s proposed superannuation reforms. He is particularly concerned about provisions of the ‘Your Future, Your Super’ bill which allow the government to block an investment by a super fund, even if it is in members’ best financial interests. Silk says that amongst other things, this raises genuine concerns about sovereign risk. David Knox of consultancy firm Mercer in turn warns that subjecting super funds to performance tests will result in lower returns over the longer term, as trustees will be reluctant to invest in some asset classes.

CORPORATES
AUSTRALIANSUPER PTY LTD, MERCER INVESTMENTS PTY LTD

New chief confronts huge task at AMP

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Original article by Joyce Moullakis
The Weekend Australian – Page: 21 & 25 : 3-Apr-21

Analysts are generally positive about the appointment of Alexis George to succeed Francesco De Ferrari as CEO of embattled wealth manager AMP, but note the challenges that she will face. George is currently deputy CEO at the ANZ Bank, and will take up her new role in the September quarter. AMP’s shares have fallen more than 45 per cent since De Ferrari became CEO in December 2018. AMP is still in talks with Ares Management regarding the sale of its private markets division.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ARES MANAGEMENT CORPORATION

Third IPO tilt values Latitude at $2.6bn

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Original article by Cliona O’Dowd, Jared Lynch
The Australian – Page: 13 & 19 : 1-Apr-21

Latitude Financial is seeking to raise $200m via an IPO; the non-bank lender and ‘buy now, pay later’ provider is slated to list on the Australian sharemarket in the week beginning 19 April. The IPO will be open to institutional investors, Latitude employees and broking firms. Latitude has made two previous attempts to list on the sharemarket; it shelved an IPO worth $1bn in 2019 due to lack of sufficient interest from investors.

CORPORATES
LATITUDE FINANCIAL GROUP LIMITED

Platinum fears bloody end to mania

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Original article by Richard Henderson
The Australian Financial Review – Page: 27 & 33 : 1-Apr-21

Platinum Asset Management CEO Andrew Clifford warns that the ‘speculative mania’ in growth stocks is not sustainable and will eventually end. He believes that rising yields on long-dated bonds will be the catalyst for the demise of the boom at the speculative end of the sharemarket. Clifford expects investors to re-embrace cyclical stocks as the domestic economy opens up in the COVID-19 pandemic and hard-hit sectors such as travel and leisure recover.

CORPORATES
PLATINUM ASSET MANAGEMENT LIMITED – ASX PTM

Stocks on track for bumper year

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Original article by David Rogers
The Australian – Page: 13 & 19 : 1-Apr-21

Australia’s S&P/ASX 200 Index gained 3.1 per cent during the March quarter, and 15.1 per cent in the first nine months of 2020-21. The local sharemarket may be on track for its best financial-year performance since fiscal 2013, when it gained 17.3 per cent. Lynas Rare Metals, Virgin Money and Zip Co were the top performers during the quarter, each posting gains of at least 40 per cent. The benchmark index had shed 11 per cent in 2019-20, due to the coronavirus-induced slump in the second half.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, LYNAS RARE EARTHS LIMITED – ASX LYC, VIRGIN MONEY UK PLC – ASX VUK, ZIP CO LIMITED – ASX Z1P

Floods to lift reinsurance costs: Youi

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Original article by Liam Walsh
The Australian Financial Review – Page: 17 : 29-Mar-21

The Insurance Council of Australia notes that more than 25,600 insurance claims arising from the recent floods in New South Wales and Queensland have been lodged to date. Youi CEO Hugo Schreuder says the insurer has already received about 1,000 claims, and he warns that the floods may result in higher reinsurance costs. This could in turn increase the insurance premiums of customers. Meanwhile, the ICA is concerned that so-called ‘disaster chasers’ could increase the final cost of the floods, by encouraging policyholders to make claims that were not directly linked to the floods.

CORPORATES
INSURANCE COUNCIL OF AUSTRALIA LIMITED, YOUI PTY LTD

‘Never going back’: pandemic pushes more to digital wallets

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Original article by Finbar O’Mallon
The Australian Financial Review – Page: 3 : 8-Mar-21

Travis Tyler from neobank 86 400 suggests the pandemic has had a bigger impact on the future of banking than the banking royal commission. He notes hygiene concerns have prompted an increase in the number of people using digital wallets in preference to traditional wallets, with financial broker firm Savvy revealing almost 50 per cent of Australians have set up a digital wallet in the past year, while almost half of those people surveyed by Savvy prefer paying with their digital wallet. Marcus Crafter, a developer with digital bank Up, claims that Australians are "never going back to cash".

CORPORATES
86400 PTY LTD, SAVVY, UP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Returns the world’s best over 121 years

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Original article by Cliona O’Dowd
The Australian – Page: 20 : 5-Mar-21

Data from Credit Suisse shows that the Australian sharemarket has outperformed other bourses over the long-term, with real annual returns of 6.6 per cent since 1900 in US dollar terms. The ASX’s annualised return over this period was 6.8 per cent in local currency terms, behind the 7.1 per cent return from the South African bourse. Looking ahead, Credit Suisse says Generation Z can expect annualised equity returns of about three per cent, compared with annualised returns of 7.1 per cent since 1950 for Baby Boomers.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED

Smaller funds hit in super grab

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Original article by Lachlan Moffet Gray
The Australian – Page: 13 & 17 : 9-Feb-21

Data from the Australian Prudential Regulatory Authority shows that a total of $36.4bn was withdrawn from superannuation funds via the federal government’s early access scheme. This was well below the Treasury’s initial forecast of more than $42bn. Members of Australian­Super withdrew more than $5bn in total, although this accounts for just 2.5 per cent of the industry giant’s assets. In contrast, some $21.18m was withdrawn from the Grosvenor Pirie Master Superannuation Fund, which equates to 14 per cent of its asset base.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY,AUSTRALIA. DEPT OF THE TREASURY,AUSTRALIANSUPER PTY LTD,GROSVENOR PIRIE MASTER SUPERANNUATION FUND