COMPETITION – AUSTRALIA

Fels laments lack of bank competition

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Original article by Adam Creighton
The Australian – Page: 2 : 11-Jul-19

Former Australian Competition & Consumer Commission chairman Allan Fels has expressed concern about the four major banks’ domination of the nation’s home loans market. He says competition in Australia’s banking sector has declined substantially since the global financial crisis. He also notes that there is now very little difference between the "big four" banks and that it is relatively easy for them to co-ordinate their actions without breaching cartel laws.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, RESERVE BANK OF AUSTRALIA, ST GEORGE BANK LIMITED, BANKWEST, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Consumers flick the switch to lower bills

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Original article by Perry Williams
The Australian – Page: 2 : 28-Jun-19

One in four Australians have changed their electricity provider in the last year, according to the Australian Energy Market Commission. Electricity retailers AGL Energy, EnergyAustralia and Origin Energy no longer hold the biggest market share in South Australia and south-east Queensland, while the average median household bill ‘offer’ declined by between two and four per cent in New South Wales in the year to March, seven per cent across south-east Queensland, and up to four per cent in Victoria.

CORPORATES
AUSTRALIAN ENERGY MARKET COMMISSION, AGL ENERGY LIMITED – ASX AGL, ORIGIN ENERGY LIMITED – ASX ORG, ENERGYAUSTRALIA PTY LTD

Retail the weakest part of the economy, RBA warns

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 24-Jun-19

The Reserve Bank of Australia has released a report which highlights the tough trading environment for the retail sector. The central bank’s June bulletin notes that retailers’ profit margins are being hit by price competition, while profitability in the sector may be at risk if retailers seek to boost market share by selling products at a loss. The net margins of food retailers have fallen below five per cent, compared with more than seven per cent in 2009. There has also been a sharp decline in the net margins of non-food retailers over this period.

CORPORATES
RESERVE BANK OF AUSTRALIA, COLES GROUP LIMITED – ASX COL, WOOLWORTHS GROUP LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, COSTCO WHOLESALE AUSTRALIA PTY LTD, ZARA, UNIQLO AUSTRALIA PTY LTD

Streaming consolidation tipped

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Original article by Lilly Vitorovich
The Australian – Page: 19 : 12-Jun-19

PwC’s latest Australian Entertainment & Media Outlook report has forecast that the expected entry of Disney+ and Apple TV+ will prompt consolidation in Australia’s subscription video-on-demand market. Netflix is the market leader in Australia, and PwC notes that there will be a wide field of contenders for the title of the nation’s second-ranked SVOD provider. Justin Papps of PwC says content and a "great viewing experience" are essential to success in the streaming market.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, DISNEY+, WALT DISNEY COMPANY, APPLE TV+, APPLE INCORPORATED, NETFLIX INCORPORATED, STAN ENTERTAINMENT PTY LTD, FOXTEL NOW, KAYO SPORTS, AMAZON PRIME VIDEO, 10 ALL ACCESS, PRESTO ENTERTAINMENT PTY LTD, SEVEN NETWORK LIMITED, FOXTEL MANAGEMENT PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS

Challenge to Australia’s gas dominance

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Original article by Perry Williams
The Australian – Page: Online : 4-Jun-19

Australia displaced Qatar as the world’s biggest LNG exporter in late 2018, but gas buyers say this status may be short-lived as more producers enter a competitive market. James Vigil of Japan-based JERA says LNG producers need to be competitive with regard to factors other than price, such as the terms and conditions of their supply deals and the length of their contracts. Meanwhile, Qatar plans to ramp up its LNG production, while the US has a rapidly growing LNG export trade.

CORPORATES
JERA, THE TOKYO ELECTRIC POWER COMPANY INCORPORATED, CHUBU ELECTRIC POWER COMPANY INCORPORATED, WOOD MACKENZIE, CHEVRON CORPORATION, AGL ENERGY LIMITED – ASX AGL, EXXONMOBIL CORPORATION, MITSUBISHI CORPORATION

New squeeze on big banks

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Original article by James Frost
The Australian Financial Review – Page: 1 & 20 : 31-May-19

The Australian Prudential Regulation Authority is expected to soon announce that smaller banks will have to hold less capital in terms of supporting their mortgage lending. This will enable them to offer cheaper home loans and higher deposit rates, making them more competitive with the larger banks. APRA’s announcement will follow shortly after the Reserve Bank’s June meeting, when it is widely expected to reduce official interest rates to 1.25 per cent.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP GROUP LIMITED – ASX SUN, CITIGROUP PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Iron ore’s wild run threatens fragile balance

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Original article by Nick Evans
The Weekend Australian – Page: 15 & 16 : 25-May-19

The iron ore price recently rose to a five-year high of more than $US100 per tonne. While the price surge will boost the earnings of Australian iron ore producers, BHP and Rio Tinto in particular would prefer a sustained price of around $US70 per tonne. The current elevated price of the steel input provides an incentive for other mining companies to develop iron ore projects and emerge as rival exporters to Asian steel mills. Countries such as Indonesia, Malaysia and India could potentially resume iron ore shipments to China, while strong growth in China’s scrap steel market looms as another possible threat to Australian producers.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, ROY HILL HOLDINGS PTY LTD, ATLAS IRON LIMITED, VALE SA

Big banks miss out as nimble lenders pounce

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Original article by James Frost
The Australian Financial Review – Page: 17 : 2-Apr-19

Specialised lenders such as Scottish Pacific say their customer base is increasing due to the stricter lending standards of the major banks. Scottish Pacific CEO Peter Langham notes that many of the firm’s small business customers would traditionally have secured funding against property from a major bank. Prospa’s co-founder Beau Bertoli agrees that small businesses are finding it harder to secure financing from big banks, noting that they are scrutinising loan applications more carefully.

CORPORATES
SCOTTISH PACIFIC GROUP LIMITED – ASX SCO, PROSPA GROUP LIMITED, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN, JUDO CAPITAL PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Room for other streamers but not at scale-player level, says Stan

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Original article by Andrew White
The Australian – Page: 24 & 26 : 1-Apr-19

Brian Han of Morningstar estimates that market penetration of subscription video-on-demand services in Australia is probably still below 50 per cent, although he says this will grow. Apple and Disney are expected to launch SVOD services in Australia, but Stan CEO Mike Sneesby says any new entrants to the market will need to make a big investment in content if they are to compete against established players. Sneesby adds that Stan boasts 1.5 million active subscribers.

CORPORATES
STAN ENTERTAINMENT PTY LTD, APPLE INCORPORATED, WALT DISNEY COMPANY, NETFLIX INCORPORATED, MORNINGSTAR PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, FAIRFAX MEDIA LIMITED, STARZ ENTERTAINMENT GROUP LLC, SHOWTIME, 21ST CENTURY FOX INCORPORATED, TEN NETWORK HOLDINGS LIMITED, CBS CORPORATION, 10 ALL ACCESS, AMAZON.COM INCORPORATED, TELSYTE PTY LTD, LIONS GATE ENTERTAINMENT CORPORATION

Tax big banks for implied guarantee

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Original article by Michael Roddan
The Australian – Page: 25 : 22-Mar-19

Australia’s four major banks are able to access wholesale funding at cheaper rates because of an implied guarantee that the federal government will not let them fail because of their size. ME Bank CEO Jamie McPhee says governments should tax the bigger banks because they get cheaper funding as a result of the "too big to fail" guarantee, and that this would make it easier for smaller banks to compete. ME Bank has advised that its net profit for the second half of 2018 fell 11 per cent to $41 million.

CORPORATES
ME BANK, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. PRODUCTIVITY COMMISSION