K: Financial and Insurance Services

NAB pledges 3-year disaster reprieve

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Original article by Elouise Fowler
The Australian Financial Review – Page: 5 : 8-Jan-20

National Australia Bank has increased its bushfire disaster relief fund to $4m and advised that customers who have been affected by the catastrophe will be given three years to repay their loans. NAB has also indicated that it will provide emergency grants to business and agriculture customers, in addition to retail customers. The Commonwealth Bank, Westpac and ANZ Bank will also provide loan relief to customers who have been affected by the bushfires.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

APRA blasts banks over risk failures

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Original article by James Frost
The Australian Financial Review – Page: 1 & 2 : 8-Jan-20

The Australian Prudential Regulation Authority is undertaking on-site reviews of the governance, culture, risk and accountability frameworks of the nation’s major banks. APRA chairman Wayne Byres says the initial findings show that changes to these frameworks are needed. Byres has signalled that smaller banks and other financial services providers will also be held accountable. APRA is also APRA is revising the CPS 220 prudential standard.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ALLIANZ AUSTRALIA LIMITED, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Equity boom helps ASX offset fall in IPOs

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Original article by Joyce Moullakis
The Australian – Page: 13 & 18 : 8-Jan-20

The ASX’s latest activity report shows that a total of $66.3bn in capital was raised on the Australian sharemarket in 2019, compared with $98.9bn in 2018. The number of IPOs fell from 132 to just 94 in 2019, amid volatility in the global IPO market and the cancellation of several major floats on the domestic market. Meanwhile, total trades in the ASX’s cash market were 25 per cent higher in the second half of 2019 compared with the previous corresponding period, while the total on-market value traded for the half-year was nine per cent higher than previously.

CORPORATES
ASX LIMITED – ASX ASX

Wild firestorms to trigger $700m in insurance losses

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Original article by Cliona O’Dowd
The Australian – Page: 13 : 7-Jan-20

Australia’s insurance industry is expected to be hard hit by the bushfires, with some estimates suggesting that the total cost of claims could top $700m. The Insurance Council of Australia has advised that the industry has received more than 6,000 bushfire-related claims since September, with the bulk of them having been submitted between November and 3 January. S&P Global Ratings says insurers could ultimately receive more than 10,000 bushfire-related claims.

CORPORATES
INSURANCE COUNCIL OF AUSTRALIA LIMITED, S&P GLOBAL RATINGS

ASX could hit 7000, but don’t get too excited

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Original article by Luke Housego
The Australian Financial Review – Page: 13 & 26 : 7-Jan-20

Market strategists are generally upbeat about the outlook for Australian equities in 2020, with the majority forecasting that the S&P/ASX 200 will reach 7,000 points. However, Chris Nicol of Morgan Stanley expects the benchmark to end the year at just 6,700 points, while Hasan Tevfik of MST Marquee has a year-end target of 7,100. Meanwhile, Damien Boey of Credit Suisse has forecast earnings-per-share growth of seven per cent.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGAN STANLEY AUSTRALIA LIMITED, MST MARQUEE, CREDIT SUISSE (AUSTRALIA) LIMITED

Japan tipped to lead inbound M&A

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Original article by Lucas Baird
The Australian Financial Review – Page: 14 : 6-Jan-20

Alex Cartel of Deutsche Bank expects Japanese companies to pursue more takeover deals in Australia during 2020, following bids for Carlton & United Breweries and DuluxGroup in 2019. He notes that Japan has replaced China as a key driver of inbound mergers and acquisitions deals in the last several years. Simon Ranson of JP Morgan adds that offshore private equity firms are cashed up, noting that factors such as the low Australian dollar will make the nation attractive to them.

CORPORATES
DEUTSCHE BANK AG, JP MORGAN AUSTRALIA LIMITED, CARLTON AND UNITED BREWERIES, DULUXGROUP LIMITED, ASAHI GROUP, NIPPON PAINT, HERBERT SMITH FREEHILLS PTY LTD, BELLAMY’S AUSTRALIA LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

US rates likely to stay on hold, Fed indicates

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Original article by James Dean
The Australian – Page: 14 : 6-Jan-20

The minutes of the Federal Reserve’s December meeting show that the US central bank expects official interest rates to remain unchanged for some time, although this is likely to depend on the economic outlook. Some Federal Reserve officials expressed concern that an extended low interest rate environment may encourage ‘excessive risk-taking’. Meanwhile, former Federal Reserve chairman contends that the central bank has options other than quantitative easing and forward guidance to stimulate the economy in the event of a downturn.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD

One in five households facing mortgage stress

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Original article by Duncan Hughes
The Australian Financial Review – Page: 3 : 3-Jan-20

Around two million households are finding it hard to make mortgage repayments despite low interest rates, according to comparison website Finder. The number of households in this position has risen since May 2018, the month before the Reserve Bank made the first of its three cash rate cuts. Brendan Coates from the Grattan Institute notes that borrowers should be looking around more for better mortgage rate offers, while Kate Browne from Finder comments that "mortgages need constant monitoring"

CORPORATES
FINDER.COM.AU, GRATTAN INSTITUTE, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Call to regulate medical devices

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Original article by Natasha Robinson
The Australian – Page: 3 : 2-Jan-20

Sheena Jack, the CEO of health insurance company HCF, has called for the creation of an independent regulator of medical devices. Jack says there should be a review of the ‘clinical efficacy’ of items that are on the prostheses list, similar to what is done for items on the pharmaceuticals list. Research conducted by Private Healthcare Australia indicates big price differences between medical devices in Australia and comparable products provided in other countries, while Jack claims public hospitals often have to pay much less for medical devices than private ones.

CORPORATES
THE HOSPITAL CONTRIBUTIONS FUND OF AUSTRALIA LIMITED

Insurers seek changes to NSW funding

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Original article by James Fernyhough
The Australian Financial Review – Page: 12 : 2-Jan-20

The Insurance Council of Australia has called for changes to the way that emergency services are funded in New South Wales. ICA spokesman Campbell Fuller claims the ’emergency services levy’, which is imposed on insurance companies, leads to underinsurance and is unfair on policyholders. Victoria had a similar levy, but scrapped it after the 2009 Black Saturday bushfires, replacing it with a broader property tax. NSW passed legislation in 2016 to enact a similar tax, but deferred its implementation not long before it was due to take effect in 2017. Fuller says that decision was "regrettable".

CORPORATES
INSURANCE COUNCIL OF AUSTRALIA LIMITED