Enterprise deals face extinction

Original article by Ewin Hannan
The Australian – Page: 4 : 13-Dec-18

The proportion of workers in the private sector that are covered by enterprise agreement has fallen from 19 per cent in 2013 to 12 per cent in 2017, according the Australia Institute’s Centre for Future Work. Its report shows that the number of private-sector employees who are covered by enterprise agreements has declined by more than 660,000 since 2013. It concludes that if the current trend continues, fewer than two per cent of private sector employees could be covered by enterprise agreements by 2030.

CORPORATES
THE AUSTRALIA INSTITUTE LIMITED

CBA adds to banks’ $1bn bill

Original article by Joyce Moullakis
The Australian – Page: 17 & 24 : 12-Dec-18

The Commonwealth Bank of Australia has advised that its 2018-19 interim financial results will include an extra $300m in provisions associated with compliance and remediation programs. CBA also announced a provision of $55m for transaction and separation costs regarding the sale of its life insurance business. The bank had previously disclosed a provision of $270m in relation to the ‘fee-for-no-service’ scandal. Australia’s four major banks have now incurred some $1.4bn worth of compensation and compliance costs in the wake of the financial services royal commission.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMINSURE LIFE, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, MORGAN STANLEY AUSTRALIA LIMITED, SHAW AND PARTNERS LIMITED

Volatility can’t stop deal-hungry companies

Original article by Joyce Moullakis
The Australian – Page: 21 & 25 : 7-Dec-18

Herbert Smith Freehills partner Tony Damian believes that 2019 will be a stronger year than 2018 for mergers and acquisitions, and John Pickhaver of Macquarie Capital is similarly optimistic. Herbert Smith Freehills predicts that superannuation funds will show a continued willingness to be directly involved in M&A deals in 2019, while healthcare, property and infrastructure are tipped to be popular sectors for M&A activity in 2019. Announced 2018 Australian M&A deals totalled $US155.9 billion ($215.4 billion) as of 5 December, according to Refinitiv.

CORPORATES
HERBERT SMITH FREEHILLS PTY LTD, MACQUARIE CAPITAL PTY LTD, GRAINCORP LIMITED – ASX GNC, HEALTHSCOPE LIMITED – ASX HSO, COLES GROUP LIMITED – ASX COL, WESFARMERS LIMITED – ASX WES, GREENCROSS LIMITED – ASX GXL, TPG TELECOM LIMITED – ASX TPM, VODAFONE AUSTRALIA LIMITED, AUSTRALIANSUPER PTY LTD, BGH CAPITAL PTY LTD, APA GROUP – ASX APA, CHEUNG KONG (HOLDINGS) LIMITED, BINGO INDUSTRIES LIMITED – ASX BIN, DIAL A DUMP INDUSTRIES PTY LTD, REFINITIV

Weak wages a threat to Xmas sales

Original article by John Kehoe, Sue Mitchell
The Australian Financial Review – Page: 1 & 8 : 6-Dec-18

The latest GDP data shows that the Australian economy expanded by just 0.3 per cent in the September quarter, compared with economists’ expectations of 0.6 per cent growth. Economists have attributed the fall in consumer spending to low wages growth and raised concerns about the outlook for retail sales during the Christmas trading period. Recent research by the Australian Retailers Association and Roy Morgan found that Christmas spending will increase by 2.9 per cent in 2018. The GDP data may affect the timing of any change in official interest rates, but the federal government still expects to post a Budget surplus in 2019-20.

CORPORATES
AUSTRALIAN RETAILERS ASSOCIATION, ROY MORGAN LIMITED, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, MJ BALE, HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS, RETAIL APPAREL GROUP PTY LTD, CITIBANK PTY LTD

Manufacturing, mining to power capex rebound

Original article by John Kehoe
The Australian Financial Review – Page: 6 : 30-Nov-18

Data from the Australian Bureau of Statistics shows that capital expenditure in the private sector is now expected to top $114.1bn in 2018-19, compared with a previous forecast of $102bn. The mining and manufacturing sectors are tipped to be the key drivers of the upturn in capital expenditure. Meanwhile, the figures show that private sector capex fell by 0.5 per cent in the September quarter, primarily due to lower expenditure in the mining sector.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, JP MORGAN SECURITIES AUSTRALIA LIMITED, TD SECURITIES, COMMONWEALTH SECURITIES LIMITED, MORGAN STANLEY AUSTRALIA LIMITED

Super mergers could save $1.8bn

Original article by Michael Roddan
The Australian – Page: 17 & 24 : 26-Nov-18

The Productivity Commission claims that $1.8 billion in savings could be gained each year if Australia’s 50 highest-cost superannuation funds were forced to merge with the 10 lowest-cost funds. The Commission’s research indicates that around eight per cent of all superannuation accounts are "trapped" in funds that have high fees and generally underperform, while there are 93 funds with less than $1 billion in assets. Its figures come as the banking royal commission prepares to take the Australian Prudential Regulation Authority to task over its tardy oversight of the superannuation sector.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Seven West tightens belt in slow ad market

Original article by Lilly Vitorovich, Stephen Brook
The Australian – Page: 21 : 15-Nov-18

Seven West Media has advised that its net cost savings for 2018-19 will be within the range of $20m to $30m, compared with previous guidance of $10m to $20m. CEO Tim Worner says Seven will seek to capitalise on any opportunities that arise from the proposed merger between Nine Entertainment and Fairfax Media. Meanwhile, chairman Kerry Stokes has told Seven’s AGM that foreign digital platforms continue to have an advantage over traditional media companies in competing for advertising revenue.

CORPORATES
SEVEN WEST MEDIA LIMITED – ASX SWM, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED – ASX FXJ, GOOGLE INCORPORATED, FACEBOOK INCORPORATED, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, CRICKET AUSTRALIA, BIG BASH LEAGUE, FOXTEL MANAGEMENT PTY LTD

Woolies to return $1.7b to shareholders

Original article by Sue Mitchell
The Australian Financial Review – Page: 16 : 13-Nov-18

Shaun Cousins of JP Morgan estimates that the sale of Woolworths’ fuel retailing business will reduce earnings per share by 7.4 per cent in 2020 and 8.1 per cent in 2021. However, the impact on EPS would be lower if Woolworths opts to return the proceeds of the sale to shareholders via a buyback. Woolworths is widely tipped to return most of the sale proceeds to investors, having initially flagged its intention to use some of the funds to reduce to debt and finance store refurbishments.

CORPORATES
WOOLWORTHS GROUP LIMITED – ASX WOW, JP MORGAN AUSTRALIA LIMITED, EG GROUP, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, BP PLC, CITIGROUP PTY LTD, BIG W DISCOUNT STORES, AUSTRALIAN LEISURE AND HOSPITALITY GROUP LIMITED, ENDEAVOUR DRINKS

Westpac challenged on growth

Original article by Joyce Moullakis
The Australian – Page: 23 : 7-Nov-18

Credit Suisse and Bell Potter have upgraded their earnings forecasts for Westpac following the release of the bank’s latest full-year financial results. Credit Suisse expects Westpac’s cash profit to rise to $8.29bn in 2018-19, after a flat profit of $8.07bn for 2017-18. Meanwhile, Macquarie Group and Morgan Stanley have reduced their earnings-per-share forecasts, and Victor German of Macquarie expects Westpac’s earnings growth in 2018-19 to be "negligible".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CREDIT SUISSE (AUSTRALIA) LIMITED, BELL POTTER SECURITIES LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, MORGAN STANLEY AUSTRALIA LIMITED

Adani’s cut-price Carmichael coal

Original article by Peter Ker
The Australian Financial Review – Page: 13 & 28 : 6-Nov-18

Adani recently gave indications that thermal coal from its Carmichael mine in Queensland is likely to boast energy content of around 5,500 kilocalories per kilogram. Rory Simington of Wood Mackenzie estimates that if the coal were offered to buyers at current market prices, it would be likely to fetch between $US50 and $U55 per tonne. This compares with $US106 per tonne at present for higher-grade coal from the Hunter Valley. Simington expects Adani’s coal to have an energy content of 4,800 kilocalories per kilogram, although he adds that washing the coal could increase this to around 5,500 kilocalories.

CORPORATES
ADANI MINING PTY LTD, WOOD MACKENZIE, WHITEHAVEN COAL LIMITED – ASX WHC, BHP BILLITON LIMITED – ASX BHP, MACQUARIE GROUP LIMITED – ASX MQG