K: Financial and Insurance Services

Super sector should shrink 80pc: report

roymorgansocial Leave a comment

Original article by James Thomson
The Australian Financial Review – Page: 19 : 25-May-20

Management consulting firm Right Lane contends that a major rationalisation of Australia’s superannuation sector is necessary. Associate principal Abhishek Chhikara suggests that there is scope for 3-5 large "generalist" funds and 7-10 niche funds that are focused on specific industries or types of super products. Right Lane estimates that a super fund needs a minimum of 500,000 active members in order to operate efficiently, and ideally they should have between one and two million active members. The firm expects the pandemic to increase the pressure on smaller funds.

CORPORATES
RIGHT LANE CONSULTING

Lowe urges banks to lend again

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 13 & 17 : 22-May-20

Reserve Bank governor Philip Lowe has praised the resilience of Australia’s financial system and said that it is well-placed to ride out the coronavirus pandemic. Lowe has also told a Financial Services Institute webcast that banks should utilise the capital and liquidity buffers that they have built up over the last decade and continue to lend during the pandemic. Lowe also repeated his view that the prospect of negative interest rates in Australia is unlikely.

CORPORATES
RESERVE BANK OF AUSTRALIA, FINANCIAL SERVICES INSTITUTE OF AUSTRALASIA

Powell’s equities lift: we’re not out of ammo

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 20 : 19-May-20

The Australian sharemarket has been bolstered by encouraging comments from US Federal Reserve chairman Jerome Powell. He indicated that there is "almost no limit" to the central bank’s monetary stimulus in response to the coronavirus pandemic; Powell has also forecast that the US economy will steadily recover during the second half of 2020, in the absence of a second wave of virus infections. The Federal Reserve’s balance sheet has increased by 67 per cent to $US6.93trn since February, although the central bank has been winding back its quantitative easing program since mid-March.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, STANDARD AND POOR’S ASX 200 INDEX

NAB’s check on mortgage deferrals

roymorgansocial Leave a comment

Original article by Cliona O’Dowd
The Australian – Page: 13 & 15 : 18-May-20

The National Australia Bank announced in March that it would offer a six-month repayment reprieve to mortgage loan customers impacted by COVID-19, with 80,000 borrowers taking up its offer. It stated then it would wait for three months before contacting borrowers to see if they are able to start making payments again, but it has begun the process after just two months. All the other major banks have confirmed they will wait the three months before getting in touch with borrowers. A NAB spokesperson says it has commenced the process ahead of time to ensure it has got in contact with all relevant borrowers before the "three-month checkpoint". Recent figures from the Australian Banking Association reveal that 429,000 borrowers have sought a pause on their repayments since late March.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BANKING ASSOCIATION

Investors should brace for another sharemarket sell-off, warn analysts

roymorgansocial Leave a comment

Original article by Euan Black
The New Daily – Page: Online : 12-May-20

The S&P/ASX200 has gained more than 20 per cent since 23 March, rebounding from a major sell-off in response to the coronavirus pandemic. Glenn Leese of TradingView cautions that the local bourse may retreat again; he notes that sharemarkets often rally after a big fall, only to incur an even larger slump. He adds that sharemarket crashes and corrections normally occur in a series of three waves, and the local market is currently experiencing its second wave.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, TRADINGVIEW

Secondary capital raisings ease on hope of reopening

roymorgansocial Leave a comment

Original article by Glenda Korporaal
The Australian – Page: 20 : 7-May-20

Data from ASX Limited shows that IPO activity slowed significantly in April, with seven new listings raising a combined $97m. This compares with the $1.2bn that was raised from new listings in April 2019. In contrast, the total value of capital raisings by companies that are already listed rose from just $2.3bn in April 2019 to $13.3bn. Max Cunningham, the executive general manager of listings and issuer services, expects the slowdown in IPOs to continue while coronavirus restrictions remain in place.

CORPORATES
ASX LIMITED – ASX ASX

Medibank mulls cash refunds

roymorgansocial Leave a comment

Original article by Joyce Moullakis
The Australian – Page: 16 : 7-May-20

Health fund Medibank Private expects its earnings and dividends to be in line with previous guidance, despite the coronavirus pandemic. Customers will save about $120m after Medibank opted to delay premium increases for six months, while CEO Craig Drummond has indicated that it may be open to providing partial refunds due to a fall in claims during the lockdown. NIB Holdings recently flagged the possibility of providing fund members with cash rebates due to the coronavirus.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF

Handle the market with care: ASIC

roymorgansocial Leave a comment

Original article by Eli Greenblat
The Australian – Page: 13 & 20 : 7-May-20

The Australian Securities & Investments Commission has expressed concern about a rise in day-trading activity among so-called ‘mum and dad’ investors during the coronavirus lockdown. ASIC notes that even market professionals often find it hard to time the market during volatile trading conditions, and it warns that retail investors risk incurring significant losses at a time when many cannot afford to do so. ASIC also notes that more retail investors are trading in complex investment products such as contracts for difference.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Westpac dividend chance good as zero

roymorgansocial Leave a comment

Original article by James Frost
The Australian Financial Review – Page: 19 : 6-May-20

Victor German of Macquarie and Matthew Wilson from Evans & Partners are among the analysts who do not expect Westpac to pay an interim dividend for 2019-20. However, German believes that Westpac could pay a final dividend of $0.40 per share, and Wilson forecasts a payout of $0.35. Brendan Sproules of Citigroup is more bullish, forecasting a final dividend of $0.65. Citi has a share price target of $26 for Westpac.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, EVANS AND PARTNERS ASIA FUND – ASX EAF, CITIGROUP PTY LTD

Put reform on fast track: Westpac

roymorgansocial Leave a comment

Original article by Joyce Moullakis
The Australian – Page: 13 & 17 : 5-May-20

Westpac has reported cash earnings of $993m for the first half of 2019-20, which is 70 per cent lower than previously. As previously flagged, the half-year result was marred by impairment charges totalling $2.23bn, including some $1.6bn for coronavirus-related loan losses. Westpac has deferred a decision on the payment of an interim dividend, while CEO Peter King has urged the national cabinet to move quickly to restart the economy when the pandemic abates. He has forecast a V-shaped economic recovery in 2021.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC