K: Financial and Insurance Services

Next rates move will be up: RBA’s Harper

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Original article by James Glynn
The Australian – Page: 24 : 30-Jan-19

Reserve Bank of Australia board member Ian Harper has downplayed suggestions that the central bank could further reduce the cash rate. He says the strength of the domestic economy means that interest rates will rise, but stresses that this is his personal view. Meanwhile, Harper adds that there are no indications as yet that the downturn in residential property prices has prompted consumers to reduce their spending. Financial markets have priced in a better-than-even chance that the RBA will reduce the cash rate during 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, MELBOURNE BUSINESS SCHOOL, COMMONWEALTH SECURITIES LIMITED

Storm clouds gathering after a promising start

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Original article by David Rogers
The Australian – Page: 24 : 30-Jan-19

Australia’s benchmark S&P/ASX 200 has gained more than four per cent so far in 2019, putting it on track to achieve its best performance in the month of January in five years. However, the local market could face a number of headwinds in the near-term, including the outlook for US interest rates and trade negotiations between the US and China. There is growing speculation that the Federal Reserve will pause its monetary policy tightening in 2019, and the exact timing of the next move in the cash rate remains uncertain.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, DOW JONES INDUSTRIAL AVERAGE INDEX, PEPPERSTONE GROUP LIMITED, JP MORGAN AND COMPANY INCORPORATED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, HUAWEI TECHNOLOGIES COMPANY LIMITED

Sharemarkets burst out of blocks

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Original article by David Rogers
The Australian – Page: 15 & 18 : 29-Jan-19

The S&P/ASX 200 has gained 4.6 per cent so far in January 2019, and it has risen eight per cent since reaching a two-year low in December. Jason Steed of JP Morgan says the benchmark index could test the 6,300-point level by the end of 2019, which implies a 12 per cent gain for the year. Meanwhile, Deutsche Bank expects the S&P/ASX 200 to finish the year at 6,150 points. Overseas sharemarkets have also started the year strongly, with the Dow Jones Industrial Average having risen for five consecutive weeks.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AUSTRALIA LIMITED, DEUTSCHE BANK AG, DOW JONES INDUSTRIAL AVERAGE INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. FEDERAL RESERVE BOARD, NEWCREST MINING LIMITED – ASX NCM, SYDNEY AIRPORT – ASX SYD, TELSTRA CORPORATION LIMITED – ASX TLS, ARISTOCRAT LEISURE LIMITED – ASX ALL, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BLUESCOPE STEEL LIMITED – ASX BSL, BRAMBLES LIMITED – ASX BXB, RELIANCE WORLDWIDE CORPORATION LIMITED – ASX RWC, TREASURY WINE ESTATES LIMITED – ASX TWE

Baird defends NAB interest rate hike

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Original article by Joyce Moullakis
The Australian – Page: 15 & 16 : 25-Jan-19

Sally Tindall of RateCity expects other major banks to increase their mortgage interest rates after National Australia Bank announced a rise in its rates for owner-occupiers and investors. NAB has indicated that a rise in wholesale funding costs was the main driver of the rate hike, but chief customer officer Mike Baird notes that it is the first increase in its standard variable interest rate since March 2017. NAB chose to leave its mortgage rates on hold when other banks lifted theirs in September.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RATECITY PTY LTD, BANK OF QUEENSLAND LIMITED – ASX BOQ, VIRGIN MONEY (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

RBA will ignore gloom and stay a growth hawk

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Original article by James Glynn
The Australian – Page: 23 : 25-Jan-19

The Reserve Bank of Australia is tipped to scale back its economic growth forecasts for 2019 and 2020, after GDP growth was just 2.8 per cent year-on-year in the December 2018 quarter. The RBA had previously forecast growth of 3.5 per cent for 2018. However, the central bank is expected to maintain its hawkish stance, given that the unemployment rate eased in December. The strong labour market also means an increase in the cash rate is more likely than a cut.

CORPORATES
RESERVE BANK OF AUSTRALIA

Aussie tipped to dive 15pc this year

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Original article by Timothy Moore
The Australian Financial Review – Page: 31 : 25-Jan-19

Capital Economics has downgraded its forecast for the Australian dollar in 2019. The firm has warned that the currency could test $US0.60 and remain at around this level in 2020. It had previously expected the currency to trade at about $US0.65 in 2019 and $US0.70 in the following year. Capital Economics is also bearish about the outlook for Australia’s key export commodities, iron ore and coal, while it expects official interest rate cuts in 2019.

CORPORATES
CAPITAL ECONOMICS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

Hacking risks higher under open banking

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Original article by James Eyers
The Australian Financial Review – Page: 19 : 24-Jan-19

The Australian Banking Association has expressed concern that theft of personal data and email scams will become rife under the federal government’s open banking regime. Open banking is slated to begin on 1 February 2020, with a pilot program to commence in July 2019. The ABA’s submission to the Treasury’s draft report on open banking has called for the terms of reference for the pilot program to include an assessment of the potential privacy risks.

CORPORATES
AUSTRALIAN BANKING ASSOCIATION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Murray in the crosshairs as battered AMP faces shareholder revolt

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Original article by Joyce Moullakis, Ben Butler
The Australian – Page: 15 & 18 : 23-Jan-19

AMP could face a board spill at its 2019 annual meeting under the ‘two strikes’ regime, after more than 61 per cent of votes cast at the 2018 meeting rejected its remuneration report. The election of chairman David Murray is also uncertain, with at least two institutional investors said to be planning to vote against the resolution. They include Hamish Carlisle of Merlon Capital Partners, who opposes the election of Murray and non-executive director John O’Sullivan.

CORPORATES
AMP LIMITED – ASX AMP, MERLON CAPITAL PARTNERS PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESOLUTION LIFE GROUP LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, ABERDEEN ASSET MANAGEMENT LIMITED, IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIAN ETHICAL INVESTMENT LIMITED – ASX AEF, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, FEDERAL COURT OF AUSTRALIA

Industry funds the likely beneficiaries of proposed superannuation changes

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Original article by Roy Morgan
Market Research Update – Page: Online : 23-Jan-19

New findings from Roy Morgan show that the level of satisfaction with the financial performance of industry superannuation funds was 61.8% in the six months to November 2018, compared with 57.2% for retail super funds. Satisfaction with industry funds has increased by 2.6% over the last year, while satisfaction with retail funds has declined by 0.3%. Eight of the top 10 performing funds, based on satisfaction with financial performance, were industry funds over the six months to November. The highest rating was for Catholic Super with 70.5%, followed by Unisuper on 69.7%. The only retail funds to make it into the top 10 were ASGARD with 65.1% and Macquarie with 63.7% satisfaction, but both were below the average of 65.5% for the top 10. These are the latest findings from Roy Morgan’s ‘Satisfaction with Financial Performance of Superannuation in Australia Report’ November 2018, which is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 30,000 with superannuation.

CORPORATES
ROY MORGAN LIMITED, CATHOLIC SUPER, UNISUPER LIMITED, ASGARD SUPER, MACQUARIE SUPER

CBA dividend cut on the cards as sell-offs create an earnings hole

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Original article by Misa Han
The Australian Financial Review – Page: 21 : 22-Jan-19

Richard Wiles of Morgan Stanley suggests that the Commonwealth Bank of Australia may have to reduce its dividend payout ratio following a series of asset sales. CBA exited the life insurance sector in 2018 and secured a deal to sell Colonial First State Global Asset Management. It also proposed to spin-off its wealth management and mortgage broking operations. CBA paid a fully franked full-year dividend of $4.31 per share in fiscal 2018, an increase of $0.02.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MORGAN STANLEY AUSTRALIA LIMITED, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, COLONIAL FIRST STATE GROUP LIMITED, COUNT FINANCIAL LIMITED, FINANCIAL WISDOM LIMITED, AUSSIE HOME LOANS LIMITED, COUNTPLUS LIMITED – ASX CUP, MORTGAGE CHOICE LIMITED – ASX MOC, SOCIETYONE AUSTRALIA PTY LTD