K: Financial and Insurance Services

Banks face more Hayne pain: ASIC

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Original article by James Frost
The Australian Financial Review – Page: 1 & 17 : 29-Jul-19

The Australian Securities & Investments Commission has launched about 25 cases against banks in the wake of the financial services royal commission. ASIC commissioner Sean Hughes says further legal action is pending, and he says it is possible that further misconduct and wrongdoings in the financial sector will emerge. Hughes adds that banks are starting to take their obligation to submit breach reports in a timely manner a lot more seriously following the royal commission.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Inflation data set to drift further from RBA target

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Original article by Patrick Commins
The Australian Financial Review – Page: 21 : 29-Jul-19

The consensus of economists polled by Bloomberg is that Australia’s underlying inflation rate eased from 1.6 per cent to 1.5 per cent in the June quarter. The CPI data to be released by the Australian Bureau of Statistics on 31 July is likely to heighten expectations that the Reserve Bank will further ease monetary policy by October, while it might also boost the local sharemarket.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, STANDARD AND POOR’S ASX 200 INDEX

Health insurance exodus continues at alarming rate

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Original article by James Fernyhough
The Australian Financial Review – Page: 20 : 26-Jul-19

The percentage of Australians aged between 20 and 28 with private health insurance cover for hospitals fell by 6.9 per cent in 2018, according to data from the Australian Prudential Regulation Authority. The overall percentage of Australians with hospital cover at the end of 2018 was 44.6 per cent, the lowest level since December 2006. The latest data follow a recent report from the Grattan Institute which claimed that the private health insurance sector is in a "death spiral" because of the continued decline of people with cover.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, GRATTAN INSTITUTE, NIB HOLDINGS LIMITED – ASX NHF, MEDIBANK PRIVATE LIMITED – ASX MPL

ASIC sues ANZ over $50m unlawful customer fees

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Original article by Samantha Bailey
The Australian – Page: 24 : 26-Jul-19

The Australian Securities & Investments Commission has filed Federal Court action against the ANZ Bank, alleging that periodic payment fees that some 460,000 customers paid between August 2003 and February 2016 were unlawful. ASIC will contend that the bank failed to disclose the fact that the fees may have been illegal until January 2014, despite being made aware of the issue in mid-2011. Affected customers were not informed until September 2015, and ANZ did not begin compensating them until August 2016. ANZ has indicated that it will "vigorously defend" the civil lawsuit.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA

RBA targets lower for longer rates

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Original article by David Rogers
The Australian – Page: 21 & 29 : 26-Jul-19

Financial markets have priced in a 93 per cent chance of an official interest rate cut in October, after Reserve Bank of Australia governor Philip Lowe indicated that the cash rate will remain low for some time. He also reiterated the central bank’s commitment to inflation targeting, and said the cash rate is unlikely to rise until the RBA is confident that inflation will return to around the midpoint of the target range of 2-3 per cent. The Australian dollar fell to a two-week low in response to Lowe’s comments, while the yield on 10-year bonds reached a record low.

CORPORATES
RESERVE BANK OF AUSTRALIA, STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Lack of confidence to force RBA rate cut

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Original article by Michael Roddan
The Australian – Page: 2 : 25-Jul-19

Westpac’s chief economist Bill Evans now expects official interest rates to fall to a record low of 0.5 per cent by February. Evans had previously forecast that the cash rate would reach a low of 0.75 per cent in the current monetary policy easing cycle. His revised forecast was prompted by factors such as a decline in consumer confidence in the wake of the rate cuts in June and July.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, UBS HOLDINGS PTY LTD, COMMONWEALTH SECURITIES LIMITED, SEEK LIMITED – ASX SEK, AUSTRALIA. DEPT OF JOBS AND SMALL BUSINESS

Tough time for IPOs as investors fall quiet

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Original article by Samantha Bailey
The Australian – Page: 25 : 24-Jul-19

HLB Mann Judd’s latest IPO Watch report shows that 23 companies listed on the Australian sharemarket in the first half of 2019, compared with 39 during the same period in 2018. Meanwhile, just $823m was raised via IPOs during the first half, down from $2.5bn in the previous corresponding period. Marcus Ohm of HLB does not expect IPO activity to improve during the September quarter, while he says the outlook for the final quarter of 2019 may depend on how the sharemarket performs. At present, just eight companies are seeking to list in the second half of 2019.

CORPORATES
HLB MANN JUDD, STANDARD AND POOR’S ASX 200 INDEX

Little room for error as reporting season nears

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Original article by David Rogers
The Australian – Page: 25 : 24-Jul-19

The consensus forecast is for S&P/ASX 200 companies outside of the resources sector to post earnings per share growth of one per cent for 2018-19. Morgans Financial expects the August 2019 reporting season to generally exceed expectations, due primarily to the fact that earnings forecasts have been downgraded so much. Andrew Tang of Morgans favours stocks such as BHP, Rio Tinto, Telstra and A2 Milk. He says Suncorp, Spark Infrastructure, Computershare and REA Group are among the stocks whose 2018-19 earnings and future guidance may disappoint the market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGANS FINANCIAL LIMITED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, TELSTRA CORPORATION LIMITED – ASX TLS, THE A2 MILK COMPANY LIMITED – ASX A2M, SUNCORP GROUP LIMITED – ASX SUN, SPARK INFRASTRUCTURE GROUP – ASX SKI, REA GROUP LIMITED – ASX REA, MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

Greedy banks inhibit stimulus

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Original article by Michael Roddan
The Australian – Page: 17 & 21 : 23-Jul-19

Jonathan Mott of UBS has questioned whether the return on equity targets of Australia’s four major banks are "justifiable or sustainable". He argues that these targets could undermine the Reserve Bank’s efforts to stimulate the economy via interest rate cuts, as they reduce banks’ incentive to cut their own interest rates due to the impact on their net interest margins. The differential between the cash rate and banks’ lending rates has widened from less than two per cent prior to the global financial crisis to almost four per cent.

CORPORATES
UBS HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CANSTAR PTY LTD

Revealed – the worst default super funds

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Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 19-Jul-19

Industry Super Australia’s analysis of data from the Australian Prudential Regulation Authority shows that Hostplus and Cbus are among the MySuper funds that have delivered the best returns over the last five years. However, Max Super is the only retail fund in ISA’s list of the 20 best-performing MySuper funds. The super funds of the Commonwealth Bank and Westpac are among the MySuper funds that delivered the lowest returns over the period.

CORPORATES
INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, HOST-PLUS, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, MAX SUPER PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIANSUPER PTY LTD, SARGON, BLACKROCK INVESTMENT MANAGEMENT (AUSTRALIA) LIMITED, AUSTRALIA. PRODUCTIVITY COMMISSION