Consolidation looms for local lenders

Original article by Joyce Moullakis
The Australian – Page: 13 & 16 : 12-Apr-21

Global payments and financial services technology group Fiserv processes about one out of every eight payment transactions in Australia. Kees Kwakernaak, the CEO of Fiserv’s Australian arm, expects further consolidation in the local banking sector in coming years. Kwakernaak anticipates mergers at the smaller end of the market in particular. However, he says consolidation in the sector is unlikely to deter non-bank financial services providers from entering the domestic market. Kwakernaak also anticipates greater collaboration among banks, which will be facilitated by initiatives such as the open banking regime.

CORPORATES
FISERV INCORPORATED

Dividends on way back up: Argo

Original article by Cliona O’Dowd
The Australian – Page: 17 : 9-Feb-21

Argo Investments has posted a 2020-21 interim profit of 67m, which is 43 per cent lower than previously. The listed investment company’s half-year result was impacted by lower dividend income, with many companies scaling back their payouts in response to the COVID-pandemic. Argo MD Jason Beddow expects many companies to announce an increase in their dividend payouts during the February reporting season. However, he doubts that dividends will return to pre-coronavirus levels. He says banks and retailers are among the companies that could significantly boost their dividend payouts for the second half.

CORPORATES
ARGO INVESTMENTS LIMITED – ASX ARG

Price boom powers big iron’s profits

Original article by Sarah Turner, Jenny Wiggins
The Australian Financial Review – Page: 13 & 16 : 18-Jan-21

The spot price of iron ore peaked at $US172.36 a tonne during the week ended 15 January. Milford Asset Management’s William Curtayne says earnings forecasts for Australia’s major iron ore producers will need to be significantly upgraded if the price of the steel input remains at around $US165/tonne. Jason Teh of Vertium Asset Management also anticipates strong growth in dividend payouts at BHP, Rio Tinto and Fortescue Metals Group, as well as the potential for special dividends and share buybacks. The surging price of iron ore will also boost federal government revenue.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, MILFORD ASSET MANAGEMENT LIMITED, VERTIUM ASSET MANAGEMENT PTY LTD

Rise in failures a pointer to future

Original article by Patrick Commins
The Australian – Page: 17 : 15-Jan-21

Michael Fung of PwC and Sal Algeri from Deloitte expect the rate of business failures in Australia to be higher than usual in 2021. The federal government has wound back some of the COVID-19 support measures that helped businesses to stay afloat during the virus-induced economic downturn, while the JobKeeper scheme is slated to be phased out in March. Data from the Australian Securities & Investments Commission supports the view that a rise in insolvencies is likely; an average of 60 companies were placed in external administration in the final two weeks of 2020, compared with 13 during the same period in 2019.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, DELOITTE TOUCHE TOHMATSU LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Investment bankers brace for deal blitz

Original article by Tim Boyd
The Australian Financial Review – Page: 6 : 11-Jan-21

Australian investment bankers are upbeat about the outlook for mergers and acquisitions activity in 2021. John Pickhaver of Macquarie Capital says local companies are likely to attract interest from foreign suitors, given Australia’s comparative success in combating COVID-19. James Disney of Credit Suisse expects private equity firms to actively pursue acquisitions in 2021. There was a spike in M&A activity in the fourth quarter of 2020, although data from Dealogic shows that the value of announced deals for the full year reached a 10-year low of $US63.2bn ($81.4bn).

CORPORATES
MACQUARIE CAPITAL PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, DEALOGIC (AUSTRALIA) PTY LTD

New year tech floats pipeline bulging after late 2020 surge

Original article by Yolanda Redrup
The Australian Financial Review – Page: 13 & 14 : 11-Jan-21

Beforepay, Marketplacer and Vinomofo are among the companies that are believed to be looking to pursue an IPO in 2021. Technology stocks are expected to be among the leading IPO candidates again, following the sharemarket debuts of companies such as Nuix and Hipages in late 2020. ASX Limited’s Max Cunningham says the success of Nuix’s IPO demonstrates the strong interest in high-growth technology companies. However, Paul Bassat of Square Peg Capital says companies should delay an IPO if they have doubts about being ready to go public.

CORPORATES
BEFOREPAY, MARKETPLACER, VINOMOFO, NUIX LIMITED – ASX NXL, HIPAGES GROUP HOLDINGS LIMITED – ASX HPG, ASX LIMITED – ASX ASX, SQUARE PEG CAPITAL PTY LTD

Nick Scali upgrades profit as retailers end 2020 on a high

Original article by James Fernyhough
The Australian Financial Review – Page: 13 & 16 : 6-Jan-21

Shares in furniture retailer Nick Scali rose to record highs during trading on 5 January after it advised that it expected its profit for the six months to 31 December would be $40.5 million, double the result for the previous corresponding period. The company also stated that its sales for the past three months were up by 58 per cent. Meanwhile, Sydney retailers other than those in the Sydney CBD have indicated that they saw strong foot traffic for the Boxing Day sales; National Retail Association CEO Dominique Lamb noted the Sydney CBD had been a "ghost town".

CORPORATES
NICK SCALI LIMITED – ASX NCK, NATIONAL RETAIL ASSOCIATION LIMITED

Australia’s iron ore miners cashing in

Original article by Shane Wright
The Age – Page: Online : 21-Dec-20

The federal Department of Industry has revised its export earnings forecasts in response to a surge in the iron ore price. It had forecast in September that the nation’s iron ore producers would boast sales of about $97bn in 2020-21, but this has now been upgraded to $123bn. The forecast for iron ore sales in 2021-22 has in turn been upgraded from $80bn to $95bn. However, thermal coal exports are expected to be lower in 2020-21 due to China’s restrictions on imports from Australia. Meanwhile, the nation’s overall resources and energy exports are now expected to total $278.7bn in 2020-21; this is $22.3bn higher than was forecast in September, but $11.9bn lower than in 2019-20.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Tough market sours outlook for resources

Original article by Perry Williams
The Australian – Page: 13 & 16 : 23-Nov-20

A new report from the federal government notes that Australia’s resource and energy sector made final investment decisions on $39bn worth of projects in the year to 31 October, which is 30 per cent higher than previously. The total value of the sector’s investment pipeline has risen to $334bn in 2020. However, the Department of Industry, Science, Energy & Resources’ latest Major Projects report warns that investment is unlikely to return to the levels seen during the last boom in the minerals and energy sector.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Dividend payouts fall 50pc in quarter

Original article by Cliona O’Dowd
The Australian – Page: 15 : 23-Nov-20

Data from Janus Henderson shows that Australian-listed companies paid out $US9.6bn ($13.4bn) worth of dividends in the September quarter, which is 47.8 per cent lower than the same period in 2019. This was primarily due to reduced dividends from three of the major banks, while a number of companies chose to withhold dividends. Jane Shoemake of Janus Henderson says payout ratios in Australia were too high and a "reset" was needed. Janus Henderson expects dividend payouts to rise in the second quarter of 2021.

CORPORATES
JANUS HENDERSON GROUP PLC – ASX JHG