K: Financial and Insurance Services

Rate cut to spur ASX to even greater heights

roymorgansocial Leave a comment

Original article by Sarah Turner
The Australian Financial Review – Page: 17 & 30 : 7-Jun-19

Australia’s benchmark S&P/ASX 200 has gained more than12 per cent so far in 2019, including a one per cent gain since the Reserve Bank reduced the cash rate on 4 June. The first interest rate cut in almost three years may provide the catalyst for further sharemarket gains, particularly given the higher yields at present from equities than bonds and cash products such as term deposits. There is also growing expectations of further monetary policy easing before the end of 2019.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, JP MORGAN AUSTRALIA LIMITED

Ex-RBA deputy queries rate cut

roymorgansocial Leave a comment

Original article by John Kehoe
The Australian Financial Review – Page: 1 & 6 : 6-Jun-19

Stephen Grenville was the Reserve Bank of Australia’s deputy governor when it introduced inflation targeting in 1996. However, he has questioned whether the inflation target of 2-3 per cent is still necessary, as well as the central bank’s decision to reduce the cash rate to a record low of 1.25 per cent. Grenville argues that there needs to be more focus on the role of fiscal policy in stimulating the economy. Inflation has been below the RBA’s target range for several years, but governor Philip Lowe says there is no need for any changes to the monetary policy framework at present.

CORPORATES
RESERVE BANK OF AUSTRALIA, LOWY INSTITUTE FOR INTERNATIONAL POLICY, OUTLOOK ECONOMICS, AUSTRALIA. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND

Banks defy the Treasurer, RBA

roymorgansocial Leave a comment

Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 5-Jun-19

Federal Treasurer Josh Frydenberg has criticised the ANZ Bank for reducing its variable mortgage interest rates by just 0.18, after the Reserve Bank of Australia cut the cash rate by 0.25 per cent to a record low of 1.25 per cent. Westpac has cut its variable rates by 0.20 per cent, while National Australia Bank and the Commonwealth Bank have passed the central bank’s full rate cut on to customers. RBA governor Philip Lowe also says the major banks should reduce their mortgage rates by the full amount, given that their wholesale funding costs have fallen significantly.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, JP MORGAN AUSTRALIA LIMITED

Boards feel the pinch on pay as Hayne fallout hits home

roymorgansocial Leave a comment

Original article by Eli Greenblat
The Australian – Page: Online : 4-Jun-19

A new survey shows that company secretaries in the financial services sector have received an average pay rise of 24 per cent in 2018-19. In contrast, the remuneration of directors and chairpersons in the industry have fallen by 11 per cent in the wake of the Hayne royal commission. Likewise, the remuneration of CEOs in the sector fell by 21 per cent and managing directors’ pay was cut by 10 per cent. The survey was undertaken by the Governance Institute, in partnership with McGuirk Consultants and Board Direction.

CORPORATES
GOVERNANCE INSTITUTE OF AUSTRALIA LIMITED, McGUIRK MANAGEMENT CONSULTANTS PTY LTD, BOARD DIRECTION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Banks told: hand over RBA cut

roymorgansocial Leave a comment

Original article by Matthew Cranston
The Australian Financial Review – Page: 1 & 4 : 4-Jun-19

The Reserve Bank of Australia is widely expected to reduce official interest rates from 1.50 per cent to 1.25 per cent on 4 June. A cut in rates would mean an end to the longest period of unchanged interest rates in the history of the RBA. Treasurer Josh Frydenberg, who has met with the banks in recent days to discuss issues such as interest rates and the federal government’s proposed securitisation fund, has called on them to pass on any rates cut in fall. However, former RBA board member Warwick McKibbin has urged it not to cut rates, while Don Hamson from Plato Investment Management says any cut in rates would result in increased demand for dividend-paying shares.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, PLATO INVESTMENT MANAGEMENT LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FRANKLIN TEMPLETON ASSET MANAGEMENT LIMITED, CORELOGIC AUSTRALIA PTY LTD, JP MORGAN AUSTRALIA LIMITED, DELOITTE TOUCHE TOHMATSU LIMITED

Business wary of RBA rate cut

roymorgansocial Leave a comment

Original article by Patrick Durkin, Matthew Cranston
The Australian Financial Review – Page: 1 & 6 : 3-Jun-19

Business leader Tony Shepherd has urged the Reserve Bank to leave official interest rates unchanged in June, arguing that it should wait for the impact of the federal election to fully flow through to the economy. Coca-Cola Amatil CEO Alison Watkins warns that a rate cut in June would leave the central bank with limited "firepower" in the event of a downturn in the economy. However, MYOB Group CEO Tim Reed notes that small businesses generally benefit from interest rate cuts.

CORPORATES
RESERVE BANK OF AUSTRALIA, COCA-COLA AMATIL LIMITED – ASX CCL, MYOB GROUP LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD, ENERGYAUSTRALIA PTY LTD, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, GRAINCORP LIMITED – ASX GNC, QANTAS AIRWAYS LIMITED – ASX QAN, GREATER WESTERN SYDNEY FOOTBALL CLUB, SYDNEY CRICKET GROUND, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UNIVERSITY OF TECHNOLOGY, SYDNEY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN LABOR PARTY

Record low bond yields turn off investors

roymorgansocial Leave a comment

Original article by Jonathan Shapiro, Sarah Turner
The Australian Financial Review – Page: 31 : 31-May-19

The yield on 10-year Australian governments rose to 1.53 per cent on 30 May, having fallen below the official interest rate in the previous trading session. Factor such as the prospect of a rate cut in June and the US-China trade war have weighed on the local bond market, with international fixed income investors now looking at higher-yielding asset classes. Bond managers caution that yields may continue to fall, noting that bonds in countries such as Japan and Germany currently have negative yields.

CORPORATES
JANUS HENDERSON GROUP PLC – ASX JHG, COLCHESTER GLOBAL INVESTORS LIMITED, RESERVE BANK OF AUSTRALIA

New squeeze on big banks

roymorgansocial Leave a comment

Original article by James Frost
The Australian Financial Review – Page: 1 & 20 : 31-May-19

The Australian Prudential Regulation Authority is expected to soon announce that smaller banks will have to hold less capital in terms of supporting their mortgage lending. This will enable them to offer cheaper home loans and higher deposit rates, making them more competitive with the larger banks. APRA’s announcement will follow shortly after the Reserve Bank’s June meeting, when it is widely expected to reduce official interest rates to 1.25 per cent.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP GROUP LIMITED – ASX SUN, CITIGROUP PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

RBA could cut to 0.5 per cent

roymorgansocial Leave a comment

Original article by Sarah TurnerMatthew Cranston
The Australian Financial Review – Page: 1 & 8 : 30-May-19

Financial markets have priced in an 86 per cent chance that the Reserve Bank of Australia will reduce the cash rate by 25 basis points in June, for the first time since August 2016. Aberdeen Standard Investments’ Jason Kururangi and mortgage broker Ben Kingsley argue that banks should pass most if not all of the likely reduction on to customers. Meanwhile, Sally Auld of JPMorgan forecasts that the RBA will ease monetary policy four times by mid-2020, reducing the cash rate to 0.5 per cent.

CORPORATES
RESERVE BANK OF AUSTRALIAABERDEEN STANDARD INVESTMENTS AUSTRALIA LIMITEDJP MORGAN AUSTRALIA LIMITEDRATECITY PTY LTDCOMMONWEALTH BANK OF AUSTRALIA – ASX CBAWESTPAC BANKING CORPORATION – ASX WBCAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZMORGAN STANLEY AUSTRALIA LIMITEDBANK OF AMERICA AUSTRALIA LIMITEDMERRILL LYNCH (AUSTRALIA) PTY LTDRESERVE BANK OF NEW ZEALANDLOAN DOLPHIN

Quantitative easing on cards as economy falters

roymorgansocial Leave a comment

Original article by James Glynn
The Australian – Page: 27 : 30-May-19

The 10-year Australian government bond yield fell to a record low of 1.487 per cent in recent days, widening the gap with US Treasuries to 0.75 per cent, while the Australian dollar is close to a 10-year low. David Plank of the ANZ Bank says there has been some speculation in financial markets that the Reserve Bank could pursue quantitative easing in addition to interest rate cuts. However, Stephen Halmarick of the Commonwealth Bank says reducing the cash rate to one per cent and government policies such as income tax cuts should provide sufficient economic stimulus to rule out the need for quantitative easing.

CORPORATES
RESERVE BANK OF AUSTRALIAAUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZCOMMONWEALTH BANK OF AUSTRALIA – ASX CBAJP MORGAN AUSTRALIA LIMITEDUNITED STATES. FEDERAL RESERVE BOARD