Ten-year bond yields plumb new depths

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Original article by Vesna Poljak
The Australian Financial Review – Page: 31 : 29-Mar-19

The global bond rally has seen the yield on Australian 10-year bonds fall to a record low of 1.73 per cent, to the same level as New Zealand’s 10-year bonds. However, NZ currently has a higher official interest rate at 1.75 per cent, although futures traders have priced in two rate cuts in Australia by August 2020, which would reduce the cash rate to one per cent. Annette Beacher of TD Securities has not ruled out a further fall in bond yields.

CORPORATES
TD SECURITIES, RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND, EUROPEAN CENTRAL BANK, UNITED STATES. FEDERAL RESERVE BOARD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Citi slaps 6500 target on ASX 200 by year’s end

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Original article by David Rogers
The Australian – Page: 27 : 29-Mar-19

Citigroup is bullish about the outlook for the S&P/ASX 200, forecasting that it will end 2019 at 6,500 points and reach 6,650 points by mid-2020. The benchmark index has gained 9.4 per cent so far in the first quarter of 2019, following a nine per cent decline in the December 2018 quarter. Citigroup is particularly upbeat about the resources sector. Meanwhile, Andrew Garthwaite of Credit Suisse has upgraded his recommendation on resources stocks from ‘neutral’ to ‘overweight’.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

$20bn resources boost to budget

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 29-Mar-19

The federal government’s April 2019 Budget bottom line is expected to be boosted by a sharp rise in earnings from resource and energy exports. The value of such exports is forecast to have grown by about $20bn since the December quarter, due to a rise the prices of key commodities. Meanwhile, the Budget is set to include $2.2m worth of additional funding for road safety programs over the next four years, with about half of this to be allocated to regional projects. The government will also establish an Office of Road ­Safety.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, AUSTRALIA. DEPT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT, VICTORIA. DEPT OF PREMIER AND CABINET

Union wants Labor to fix free rider problem

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 11 : 28-Mar-19

The National Tertiary Education Union’s industrial relations policy identifies several options for addressing the issue of workers who benefit from enterprise agreements without being a union member. They include requiring non-union members to pay a bargaining agents fee. The NTEU has lobbied Labor to put the issue of so-called "free riders" on its industrial relations agenda. Australian Industry Group CEO Innes Willox says bargaining fees are contrary to the right to freedom of association. Such fees have been banned in Australia since 2003.

CORPORATES
NATIONAL TERTIARY EDUCATION INDUSTRY UNION, AUSTRALIAN LABOR PARTY, THE AUSTRALIAN INDUSTRY GROUP, ACTU, MAURICE BLACKBURN PTY LTD

5G ‘overhyped’: Credit Suisse telco chief

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Original article by Eric Johnston
The Australian – Page: 27 : 28-Mar-19

Optus launched 5G broadband services in February, while Telstra intends to begin selling 5G handsets within six months. However, Colin McCallum of Credit Suisse has downplayed the merits of 5G technology for consumers, arguing that existing 4G networks can cope with the demands of streaming video. He notes that deploying 5G technology will require significant capital expenditure, while the opportunities for increased revenue from consumers are quite limited at present.

CORPORATES
SINGTEL OPTUS PTY LTD, TELSTRA CORPORATION LIMITED – ASX TLS, CREDIT SUISSE AG, SAMSUNG ELECTRONICS COMPANY LIMITED, APPLE INCORPORATED

Small business contract safeguards beefed up

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Original article by John Kehoe
The Australian Financial Review – Page: 11 : 28-Mar-19

The federal government has outlined plans to extend its laws on unfair contract terms to a broader range of small businesses. Firms with annual turnover of up to $10m will be covered by the laws under the proposed reforms, while the threshold will be increased from 20 employees to 100. Assistant Treasurer Stuart Robert has stressed that the government will not pursue any reforms without consulting with all relevant stakeholders.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Greens push to ban $25bn coal industry

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Original article by Ben Packham
The Australian – Page: 6 : 28-Mar-19

Coal-fired power stations will be a key target of the Greens’ new climate policy, which will be released on 28 March. The Greens aim to ban both thermal coal mining and the use of coal to generate electricity, while it proposes to progressively reduce thermal coal export quotas with the goal of eventually phasing out an industry that is estimated to be worth about $25bn a year. The Coal Council of Australia has warned that up to 150,000 direct and indirect jobs could be at risk under the Greens’ policy.

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AUSTRALIAN GREENS, COAL COUNCIL OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, INTERNATIONAL ENERGY AGENCY

LNG Asia price slump irks east coast manufacturers

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 20 : 28-Mar-19

The Asian spot price of LNG has fallen to a three-year low of around $US4.50 per million British thermal units, which equates to about $6.30 per gigajoule. In contrast, the spot price in Sydney is trading at around $11.25/GJ. Some gas buyers have urged the federal government to intervene by imposing restrictions on Queensland’s LNG exporters, but Resources Minister Matthew Canavan says the best way to put downward pressure on domestic prices is to find new sources of supply.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, SANTOS LIMITED – ASX STO, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, WESTON ENERGY, INCITEC PIVOT LIMITED – ASX IPL, CLAYPAVE PTY LTD, REMAPAK PTY LTD, WORRELLS SOLVENCY AND FORENSIC ACCOUNTANTS

Meat sector calls for drought relief funds

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Original article by Sarah-Jane Tasker
The Australian – Page: 19 : 28-Mar-19

The Australian Meat Industry Council has released a report which shows that the industry’s regulatory cost burden is significantly higher than that of other major red meat-producing nations. The AMIC has called for government action to reduce export certification charges, which are estimated to cost the industry about $110m a year. CEO Patrick Hutchinson says these fees – which local producers must pay in full – are a key reason why Australian red meat is becoming globally uncompetitive.

CORPORATES
AUSTRALIAN MEAT INDUSTRY COUNCIL

Wesfarmers talks to Malaysia over Lynas

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Original article by Paul Garvey
The Australian – Page: 17 & 20 : 28-Mar-19

Rare earths miner Lynas Corporation has rejected an unsolicited $1.5bn takeover bid from Wesfarmers. Lynas CEO Amanda Lacaze has also criticised Wesfarmers’ move to engage directly with the Malaysian government regarding Lynas’s processing plant in Kuantan, stating that the conglomerate cannot speak on behalf of the company. Meanwhile, stockbroking firm Morgans has cited factors such as the political risk in Malaysia for its decision to downgrade its recommendation on Wesfarmers shares from ‘add’ to ‘hold’.

CORPORATES
LYNAS CORPORATION LIMITED – ASX LYC, WESFARMERS LIMITED – ASX WES, MORGANS FINANCIAL LIMITED, GREENCAPE CAPITAL PTY LTD, CHALLENGER LIMITED – ASX CGF, CITIGROUP PTY LTD