K: Financial and Insurance Services

Economists push rate rise to 2020

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Original article by Vesna Poljak
The Australian Financial Review – Page: 1 & 16 : 2-Jan-19

The latest quarterly survey of economists shows that the general consensus is that the Reserve Bank will leave official interest rates on hold until mid-2020. Previous expectations were for a rate rise in the second half of 2019. However, Shane Oliver of AMP Capital is one of three economists who expect the central bank to reduce the cash rate in 2019. Meanwhile, the US Federal Reserve is now widely tipped to increase interest rates twice in 2019.

CORPORATES
RESERVE BANK OF AUSTRALIA, AMP CAPITAL INVESTORS LIMITED, INDUSTRY SUPER AUSTRALIA PTY LTD, MARKET ECONOMICS PTY LTD, MOODY’S ANALYTICS AUSTRALIA PTY LTD, RBC CAPITAL MARKETS, UNIVERSITY OF TECHNOLOGY, SYDNEY, UNITED STATES. FEDERAL RESERVE BOARD, MACQUARIE GROUP LIMITED – ASX MQG, QIC LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Fed rate hike roils global markets

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Original article by David Rogers
The Australian – Page: 15 & 21 : 21-Dec-18

Australia’s benchmark S&P/ASX 200 has shed 9.2 per cent so far in 2018, and 11 per cent during the current quarter. The local market’s 1.3 per cent fall on 20 December was accompanied by large falls across Asia, while the Australian dollar reached a low of $US.7086 and the yield on 10-year Australian bonds fell to 2.3 per cent. Financial markets believe that the US Federal Reserve made a policy mistake in signalling further monetary policy tightening over the next few years and it may have to reduce interest rates within two years.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, PEPPERSTONE FINANCIAL PTY LTD, UNITED STATES. FEDERAL RESERVE BOARD, NIKKEI 225 INDEX, STANDARD AND POOR’S 500 INDEX, BLOOMBERG LP, OANDA AUSTRALIA PTY LTD, MAGELLAN FINANCIAL GROUP LIMITED – ASX MFG, WAM CAPITAL LIMITED – ASX WAM, MORNINGSTAR PTY LTD, PLATYPUS ASSET MANAGEMENT PTY LTD, ECP ASSET MANAGEMENT PTY LTD, HYPERION ASSET MANAGEMENT LIMITED

Goldman hits at doomsday savings chatter

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Original article by Tim Boyd
The Australian Financial Review – Page: 12 : 21-Dec-18

Andrew Boak and Tom Kennedy have differing views on whether low savings rates are a sign that Australian consumers are optimistic. Boak, who is Goldman Sachs’ chief economist in Australia, believes that low saving rates show that consumers are using their savings to spend, and it reflects a sense of optimism. However, Kennedy, who is JP Morgan’s global fixed income strategist, says if consumers were feeling that optimistic this would also be reflected in similar moves in credit card debt and short-term debit items.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, JP MORGAN AUSTRALIA LIMITED, NOMURA AUSTRALIA LIMITED, RESERVE BANK OF AUSTRALIA

Super boss says NAB vote puts all boards to the test

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Original article by Richard Gluyas
The Australian – Page: 15 & 19 : 21-Dec-18

AustralianSuper CEO Ian Silk says the resounding rejection of National Australia Bank’s remuneration report shows that shareholders expect executives to be subject to long-term performance targets. NAB, Westpac and ANZ incurred large protest votes under the "two strikes" regime at their 2018 AGMs, prompting them to commit to reviewing their remuneration schemes. NAB chairman Ken Henry has acknowledged that the bank’s single variable pay structure is problematic and may need to be revised.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIANSUPER PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, OWNERSHIP MATTERS PTY LTD

NAB reels from exec pay revolt

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Original article by Richard Gluyas
The Australian – Page: 13 & 16 : 20-Dec-18

National Australia Bank’s remuneration report was rejected by a record 88.4 per cent of shareholders at its AGM on 19 December, while 64.1 per cent also opposed a reward shares package for CEO Andrew Thorburn. Chairman Ken Henry told shareholders that NAB will review its remuneration scheme and expressed confidence that Thorburn will remain at the helm to oversee the final two years of the bank’s restructuring program. ANZ Bank also face a board spill in 2019 after 33.8 per cent of shareholders voted against its remuneration report.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, HUMAN GROUP

Fed, markets split on rate outlook – again

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Original article by Sarah Turner
The Australian Financial Review – Page: 29 : 20-Dec-18

Financial markets have diverged from the Federal Reserve regarding the outlook for US interest rates in 2019, ahead of the central bank’s December board meeting. The general consensus of bond investors is that the Fed will not increase interest rates as rapidly as it has flagged in 2019. Meanwhile, analysts say factors such as the US-China trade war and the downturn in the crude oil price are likely to weigh on the Fed’s monetary policy decision for December.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, GRANT SAMUEL FUNDS MANAGEMENT PTY LTD, FEDERATION ASSET MANAGEMENT, BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED

Super members on track for first loss since 2011

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Original article by Samantha Bailey
The Australian – Page: 13 & 18 : 19-Dec-18

Data from SuperRatings shows that the median balanced superannuation fund has gained just 1.8 per cent so far in 2018. The firm says the median fund is likely to post a negative return for the full year, after shedding 3.1 per cent in October and 0.6 per cent in November. SuperRatings’ executive director Kirby Rappell says the market volatility of recent months is likely to continue in 2019. However, SuperRatings notes that balanced funds have delivered strong returns over a 10-year period.

CORPORATES
SUPERRATINGS PTY LTD, STANDARD AND POOR’S ASX 200 INDEX

NAB insists its breaches were not criminal acts

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Original article by Ben Butler
The Australian – Page: 13 & 18 : 19-Dec-18

National Australia Bank has conceded that its MLC Nominees subsidiary had breached the Corporations Act and the Australian Securities and Investments Commission Act. The breaches related to so-called plan service fees that the superannuation trustee company had imposed on customers despite not providing any services. NAB has acknowledged in court filings that MLC Nominees’ actions constituted misleading or deceptive conduct. The Australian Securities & Investments Commission launched legal action against NAB in September.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC NOMINEES, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, NULIS NOMINEES AUSTRALIA LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Major funds bracing for bear market

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Original article by David Rogers
The Australian – Page: 13 & 18 : 19-Dec-18

Sharemarkets in Australia and Asia fell sharply on 18 December, in response to bearish sentiment on Wall Street. The S&P/ASX 200 has shed more than 7.4 per cent so far in 2018, and it is on track to record its biggest fall for the December quarter since 2008. Magellan Financial Group and WAM Capital have maintain a high level of cash holdings, although Randal Jenneke of T. Rowe Price sees the market volatility as a selective buying opportunity.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MAGELLAN FINANCIAL GROUP LIMITED – ASX MFG, WAM CAPITAL LIMITED – ASX WAM, T ROWE PRICE GROUP INCORPORATED, STANDARD AND POOR’S 500 INDEX, SHANGHAI COMPOSITE INDEX, NIKKEI 225 INDEX, RELIANCE WORLDWIDE CORPORATION LIMITED – ASX RWC, JAMES HARDIE INDUSTRIES PLC – ASX JHX, BHP GROUP LIMITED – ASX BHP, WOOLWORTHS GROUP LIMITED – ASX WOW, AUSTRALIAN LABOR PARTY

ASIC goes to court in AMP document hunt

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

The Australian Securities & Investments Commission is seeking a court order to compel AMP to provide access to documents relating to the fees-for-no-service scandal. AMP contends that the transcripts of Clayton Utz’s interviews with AMP employees regarding the scandal are subject to legal professional privilege, which ASIC disputes. The financial services royal commission had been told that Clayton Utz’s report on the scandal had been altered following discussions with key AMP executives.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CLAYTON UTZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, FEDERAL COURT OF AUSTRALIA