SAVING AND INVESTMENT – AUSTRALIA

Households deplete pandemic savings

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Original article by Michael Read
The Australian Financial Review – Page: 3 : 28-Aug-24

The Reserve Bank of Australia has estimated that the nation’s households had amassed excess savings of about $300bn during the COVID-19 pandemic. However, National Australia Bank believes that this figure was about $200bn. Meanwhile, research from Yarra Capital Management suggests that households had most likely exhausted these pandemic-era savings by March 2024. Economists are now speculating as to whether consumers will opt to spend or save the additional income from the stage-three tax cuts that took effect on 1 July. Too much spending could force the RBA to leave the cash rate on hold for longer than expected.

CORPORATES
RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, YARRA CAPITAL MANAGEMENT

SMEs squirrel away cash in crisis: ANZ

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Original article by Jared Lynch
The Australian – Page: 13 & 16 : 19-Jul-21

ANZ Bank’s CEO Shayne Elliott says the amount of cash held in bank deposits has surged during the last year, with small businesses and consumers opting to save during the COVID-19 pandemic. He notes that small businesses in particular are opting to save at an "unprecedented rate", adding that this trend could have a slight negative impact on the national economy. However, Elliott says increased savings means that small businesses are in a much stronger position during the current lockdowns compared with 2020.

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AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Retirees hit but ‘it’s for the good of all’

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Original article by Patrick Commins
The Australian – Page: 4 : 4-Nov-20

Reserve Bank governor Philip Lowe has conceded that retirees and savers will be hard hit by the decision to reduce the cash rate to a record low of 0.1 per cent. However, Lowe contends that they need to be mindful of the "collective good", arguing that lower rates will benefit the broader community by supporting spending and creating jobs. Rice Warner’s executive director Michael Rice notes that retirees who are only partly self-funded will be particularly hard hit by the decline in deposit rates, and many will become more reliant on the age pension.

CORPORATES
RESERVE BANK OF AUSTRALIA, RICE WARNER ACTUARIES PTY LTD

Costello’s warning to retirees

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Original article by Greg Brown, Adam Creighton
The Australian – Page: 1 & 6 : 7-Aug-19

Future Fund chairman Peter Costello has urged the US and China to "sensibly negotiate" a resolution to their ongoing trade dispute in the wake of a global financial rout. The Australian sharemarket has shed $86bn in the last two trading sessions, following China’s move to devalue its currency; Costello has warned that Australians’ savings and the federal Budget will be impacted if the trade dispute is not resolved. However, he says it is important to not "overhype" the recent market slump.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, STANDARD AND POOR’S ASX 200 INDEX, RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, CITIGROUP INCORPORATED, UNITED STATES. DEPT OF THE TREASURY, INTERNATIONAL MONETARY FUND, JP MORGAN AUSTRALIA LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG

Australian workers not saving enough to handle a job loss

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Original article by Killian Plastow
The New Daily – Page: Online : 11-Jul-19

Research by Finder shows that 5.9 million Australian workers have insufficient savings to support themselves for more than a month if they lost their job. The survey also found that 2.1 million Australians would be unable to financially support themselves for more than a week. Separate research by Roy Morgan shows that Australians have an average of six months’ worth of savings, although the median is about 0.8 months, or 24 days. CEO Michele Levine says people on low incomes would be hardest hit by a sudden job loss, as they are less likely to have savings.

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FINDER.COM.AU, ROY MORGAN LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Rate cut may lead to riskier investing

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Original article by Sarah Turner
The Australian Financial Review – Page: 31 : 13-Jun-19

Anthony Doyle of Fidelity International says Australian savers are likely to seek out higher-yielding and higher-risk investments following the Reserve Bank’s decision to reduce the cash rate to a new low of 1.25 per cent. He notes that there was a similar trend in the UK following the global financial crisis, with Britain’s cash rate reaching a low of just 25 basis points. Doyle also expects the search for yield to bolster Australia’s corporate bond market.

CORPORATES
FIDELITY INTERNATIONAL PTY LTD, RESERVE BANK OF AUSTRALIA, M&G INVESTMENT MANAGEMENT LIMITED

Savers under pressure as banks keep lowering rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 5 : 15-Jan-19

Analysis by Canstar shows that the average interest rate for a 12-month term deposit of $50,000 is now 2.55 per cent. Likewise, the average online savings interest rate is now just 1.35 per cent, compared with a peak of 7.3 per cent in 2008. In contrast, the cash rate is 1.5 per cent and Australia’s inflation rate is 1.9 per cent. Professor Richard Holden from the University of New South Wales warns that low interest rates will encourage more savers to seek higher-risk investment options such as shares.

CORPORATES
CANSTAR PTY LTD, UNIVERSITY OF NEW SOUTH WALES, SEMAPHORE PRIVATE PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, VIRGIN MONEY (AUSTRALIA) PTY LTD, BANK OF QUEENSLAND LIMITED – ASX BOQ

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

Treasury in warning on saving raids

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Original article by Michael Roddan
The Australian – Page: 1 & 2 : 25-Oct-18

Australia’s household savings rate fell to one per cent in June, compared with 2.5 per cent one year earlier. Treasury secretary Phil Gaetjens has told the Senate economics committee that it is likely to fall further as low wages growth forces consumers to use more of their savings. Treasury expects economic growth to continue to be bolstered by consumer spending, but Alan Oster of National Australia Bank says the bank’s own data indicates that consumer spending is not as strong as official figures suggest. Meanwhile, independent economist Saul Eslake says falling asset prices are likely to prompt consumers to reduce their spending.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

More girls save money but boys receive more

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-May-18

The Roy Morgan Young Australian Survey has found that nearly 77% of kids aged 6-13 have money saved up. Some 79% of girls have savings, compared to 75% of boys. The survey, which was carried in the six months to December 2017, also shows that on average, boys have a total of $279.90 saved up, compared to girls who have an average of $268.68 saved. This is an extra $11.22 boys have saved on average compared to girls. Yet more girls are saving than boys. Meanwhile, girls on average receive 50 cents more a week than boys, whether for pocket money or chores, or extra money for school expenses. Yet boys on average receive more money as gifts, from birthdays to Christmas and from relatives.

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ROY MORGAN LIMITED