Australia and New Zealand Banking Group Limited (ANZ):
Extra revenue earned by raising interest rates for property investors should help turn around ANZ Banking Group’s slipping net interest margin in the second half, as its industry-leading capital position raises the prospect of higher dividends or even a share buyback. A $3.4 billion cash profit and a $9 billion reduction in the institutional bank’s risk-adjusted assets for the six months to March 31 helped lift ANZ’s key capital ratio above 10 per cent for the first time. Internally generated capital (that is, not through equity raisings) was almost double the first half average of the past five years. While asset sales in Asia have boosted ANZ’s coffers and reduced its risk profile, they have also highlighted a gap in earnings at a time when the retail bank in Australia faces challenging conditions, including stagnant wage growth and regulatory lending caps. This spooked the market, which sent ANZ shares down 2.1 per cent to $32.25, after they climbed 5.7 per cent in the past three weeks.
Charter Hall Group (CHC); Dexus Property Group (DXS); Goodman Group (GMG):
Amazon’s reach into Australia could be more geographically diverse than first thought, with major listed real estate groups such as Dexus, Charter Hall Group and Goodman among those considering locations such as Brisbane for the online retail giant. Dexus chief financial officer Alison Harrop said at the Macquarie Connections conference in Sydney on Tuesday that the property company had jumped on the opportunity to house Amazon across its portfolio in Australia. There have already been suggestions it is weighing up a development project at Goodman Group’s $50 million industrial estate at Oakdale Industrial Estate, Old Wallgrove Road, Eastern Creek in Sydney.
Platinum Asset Management Limited (PTM):
The situation at Platinum Asset Management looks different. A former market darling, its share price is down from $9.50 to closer to $4.70. The trend away from active funds management drove funds under management lower and, with it, profitability. Last week the company said it would cut the fees on its trust funds and the global fund to 1.35 per cent from 1.5 per cent and introduced an optional performance based fee structure. However, the half-year result in February showed an 18 per cent rise in earnings per share and a 2 per cent lift in assets under management. The March funds under management report confirmed what looks like a turnaround in mandate losses, with another increase. Also, Platinum has about $360 million in cash on hand, and a buyback program of up to 10 per cent of the stock.
Sydney Airport (SYD):
The new Western Sydney Airport will eventually target business travellers as well as budget travellers and will not just be a low-cost terminal, says Urban Infrastructure Minister Paul Fletcher. Qantas chief executive Alan Joyce warned the new airport needed to be ‘‘lower cost than Kingsford Smith’’ and operate 24 hours a day to justify shifting its Jetstar operations to Badgerys Creek. ‘‘There’s no incentive for us to move Jetstar’s operations if it’s more expensive or the same cost,’’ Mr Joyce told Macquarie’s Australia conference in Sydney, adding some airports were high-priced ‘‘Taj Mahals’’. The Sydney basin can support two airports if it emulates the London model, where Heathrow is ‘‘very clearly’’ a premium airport and Stanstead, the hub for Irish airline Ryanair, is low-cost, Mr Joyce said.
Telstra Corporation Limited (TLS):
Telecommunications giant Telstra has launched the country’s first public Internet of Things innovation lab in Melbourne, opening up its infrastructure expertise and resources to burgeoning start-ups. Telstra chief technology officer Hakan Eriksson said the GSMA Mobile IoT Open Lab would be open to anyone from high school students to large corporations, with the aim of providing innovators with an environment to test their ideas and build new devices. ‘‘We’re experts in the network part of it, but not in all the applications that run on top such as agricultural applications, power distribution applications or logistics applications ... and they are not experts in networks, so we needed a meeting place and this is that meeting place,’’ Mr Eriksson said.
(Source: AIMS)
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