AGL Energy Limited (AGL):
With energy prices hitting the headlines for all the wrong reasons over the past months, the electricity and gas supply sector is in the political and public glare. As one of the country’s biggest energy retailers, AGL is in the thick of it. Chief executive Andy Vesey has gone on the front foot to position the utility for a low carbon future, but it is its legacy presence in coal power generation that allows AGL to benefit from soaring wholesale electricity prices, helping push the stock to a record in April. The industry is urgently pressing for a long-term policy pathway to provide certainty to invest in new supply to replace ageing coal generators that are gradually closing.
Australia and New Zealand Banking Group (ANZ):
ANZ Banking Group is set to outline details of a new $1 billion long-dated hybrid on Wednesday, sources told Street Talk. It’s understood the instrument will be priced at 3.8 percent to 4 percent over the bank bill swap rate and meet Basel III requirements for tier one capital. ANZ Banking Group has lifted its third quarter cash profit by 5.3 per cent over the first two quarters to $1.79 billion due to stronger owner-occupier housing lending. The headline result was ahead of market expectations but was assisted by a low charge for bad and doubtful debts that offset a slightly weaker underlying result. ANZ shares rose 1.3 per cent to $29.81 on Tuesday, stronger than the gains in the rest of the banking sector.
Commonwealth Bank of Australia (CBA):
Ross McEwan, Craig Drummond and Rob Whitfield have been mentioned as potential successors to outgoing Ian Narev as the Commonwealth Bank board begins its search for a new chief executive. The parliamentary committee examining banking conduct may renew its push for the banks’ risk management frameworks to be independently reviewed in the wake of AUSTRAC’s legal action against Commonwealth Bank. One of the ugly sleeper issues buried in the 580-page statement of claim issued by financial intelligence agency AUSTRAC against the Commonwealth Bank of Australia is the accusation the bank failed to report its suspicions that a customer had links to terrorism financing. Commonwealth Bank of Australia may have a long list of regulatory woes but the lender has managed to blindside its major rival’s wealth auction. Sources suggested Zurich, AIA Group and Metlife had already participated in management meetings with CBA on the life business, which may fetch $4 billion to $5 billion. More recently suitors have also factored in regulatory risks posed by the AUSTRAC court action.
National Australia Bank Limited (NAB):
NAB is working to resolve an issue that will see the American Express cards of some customers stop working without warning sometime between now and the end of September. Over the past few months the bank has migrated hundreds of thousands of customers from Mastercard to Visa as part of a 10-year exclusive deal with the NYSE-listed credit card provider. A glitch in the migration process however has meant that AMEX cards of some customers will cease working by the end of September as reports emerge that others are already failing. The bank says that there are fewer than 2000 customers walking around with defective cards in their wallets.
Propertylink Group (PLG):
Amazon’s entry into Australia is just the start of growth in demand for suburban infill sites that can be used for last-mile logistics service. For Propertylink, which last year paid $46.6 million for a new warehouse in Western Sydney’s Yennora leased to online fashion retailer The Iconic, the growth would benefit landlords with assets placed to tap that market.
Santos Limited (STO):
Santos’ third large write-down on its GLNG gas export project has underscored the vulnerability of Queensland coal seam gas-based ventures to low oil prices. The latest $US870 million ($1.1 billion) impairment, flagged on Tuesday before next week’s interim earnings release, takes the total of post-tax write-downs by Santos on its stake in the project to $US2.2 billion. Pre-tax, the figure is much higher, but Santos didn’t release the latest impairment before tax. But the hit to Santos’s bottom line in the June half, to be announced on August 24, will be softened by a surprise positive write-back in the book value of its Cooper Basin assets due to cost savings and performance improvements. The improvements have more than offset the impact on the Cooper asset of the lower oil price assumptions, and have resulted in a net write back of $US330 million after tax. All up, the net impact is a charge of about $US690 million after tax in the first half, signalling Santos will fall well into the red, based on UBS’s estimate of a net underlying profit for the first half of $US169 million.
Stockland Corporation (SGP):
Stockland will start work on a new 5000-lot housing community in Melbourne’s west later this year after the Victorian government approved the new 1500-hectare suburb of Mount Atkinson. Victorian Planning Minister Richard Wynne signed off on the Mount Atkinson precinct structure plan on Tuesday after Stockland and landowner Mount Atkinson Holdings agreed to invest $100 million in funding the construction of two schools, a future train station and other community facilities. Stockland, which reports its full-year results on Wednesday, reached agreement in May with Mount Atkinson Holdings – controlled by Melbourne’s wealthy Scalzo, Goldfinger and Caligiuri families – to develop a 315-hectare site within a bigger 700-hectare parcel owned by the consortium. Stockland will split the profits on the new estate with Mount Atkinson Holdings, which plans to develop housing, retail and a town centre on the remainder of the site.
Transurban Group (TCL):
Transurban continues to rake in cash from its 13 Australian and two US toll roads as rising congestion in cities encourages drivers to pay toll fares to avoid getting stuck in traffic. Transurban’s proportionate earnings before interest, tax, depreciation and amortisation, which measure income relative to its ownership stakes in its toll road assets, rose 10 per cent to $1.63 billion in the year to June 30. Annual net profit leapt more than eightfold to $209 million from $22 million a year earlier, but profits in 2015-16 were hurt by costs associated with its $1.9 billion takeover of Brisbane’s Airportlink M7 toll road. Transurban is forecasting a full-year dividend of 56¢ for 2017-18, up 8.7 per cent on the previous year. Some analysts believe the stock is overvalued, warning Transurban – which is carrying more than $13 billion in group debt – is vulnerable to rising interest rates.
Yancoal Australia Limited (YAL):
The Takeovers Panel has rejected an attempt by Yancoal’s minority shareholders to block the Chinese-backed company’s $US2.5 billion ($3.1 billion) capital raising, which will be used to fund its acquisition of Rio Tinto’s Coal & Allied business Mr Taylor, who controls a 4.5 per cent stake in Yancoal, has argued that the entitlement offer ‘‘has been priced and structured in a manner [that will be] unnecessarily highly dilutive’’ and ‘‘does not allow existing minority shareholders a reasonable and equal opportunity to participate’’.
(Source: AIMS)
With energy prices hitting the headlines for all the wrong reasons over the past months, the electricity and gas supply sector is in the political and public glare. As one of the country’s biggest energy retailers, AGL is in the thick of it. Chief executive Andy Vesey has gone on the front foot to position the utility for a low carbon future, but it is its legacy presence in coal power generation that allows AGL to benefit from soaring wholesale electricity prices, helping push the stock to a record in April. The industry is urgently pressing for a long-term policy pathway to provide certainty to invest in new supply to replace ageing coal generators that are gradually closing.
Australia and New Zealand Banking Group (ANZ):
ANZ Banking Group is set to outline details of a new $1 billion long-dated hybrid on Wednesday, sources told Street Talk. It’s understood the instrument will be priced at 3.8 percent to 4 percent over the bank bill swap rate and meet Basel III requirements for tier one capital. ANZ Banking Group has lifted its third quarter cash profit by 5.3 per cent over the first two quarters to $1.79 billion due to stronger owner-occupier housing lending. The headline result was ahead of market expectations but was assisted by a low charge for bad and doubtful debts that offset a slightly weaker underlying result. ANZ shares rose 1.3 per cent to $29.81 on Tuesday, stronger than the gains in the rest of the banking sector.
Commonwealth Bank of Australia (CBA):
Ross McEwan, Craig Drummond and Rob Whitfield have been mentioned as potential successors to outgoing Ian Narev as the Commonwealth Bank board begins its search for a new chief executive. The parliamentary committee examining banking conduct may renew its push for the banks’ risk management frameworks to be independently reviewed in the wake of AUSTRAC’s legal action against Commonwealth Bank. One of the ugly sleeper issues buried in the 580-page statement of claim issued by financial intelligence agency AUSTRAC against the Commonwealth Bank of Australia is the accusation the bank failed to report its suspicions that a customer had links to terrorism financing. Commonwealth Bank of Australia may have a long list of regulatory woes but the lender has managed to blindside its major rival’s wealth auction. Sources suggested Zurich, AIA Group and Metlife had already participated in management meetings with CBA on the life business, which may fetch $4 billion to $5 billion. More recently suitors have also factored in regulatory risks posed by the AUSTRAC court action.
National Australia Bank Limited (NAB):
NAB is working to resolve an issue that will see the American Express cards of some customers stop working without warning sometime between now and the end of September. Over the past few months the bank has migrated hundreds of thousands of customers from Mastercard to Visa as part of a 10-year exclusive deal with the NYSE-listed credit card provider. A glitch in the migration process however has meant that AMEX cards of some customers will cease working by the end of September as reports emerge that others are already failing. The bank says that there are fewer than 2000 customers walking around with defective cards in their wallets.
Propertylink Group (PLG):
Amazon’s entry into Australia is just the start of growth in demand for suburban infill sites that can be used for last-mile logistics service. For Propertylink, which last year paid $46.6 million for a new warehouse in Western Sydney’s Yennora leased to online fashion retailer The Iconic, the growth would benefit landlords with assets placed to tap that market.
Santos Limited (STO):
Santos’ third large write-down on its GLNG gas export project has underscored the vulnerability of Queensland coal seam gas-based ventures to low oil prices. The latest $US870 million ($1.1 billion) impairment, flagged on Tuesday before next week’s interim earnings release, takes the total of post-tax write-downs by Santos on its stake in the project to $US2.2 billion. Pre-tax, the figure is much higher, but Santos didn’t release the latest impairment before tax. But the hit to Santos’s bottom line in the June half, to be announced on August 24, will be softened by a surprise positive write-back in the book value of its Cooper Basin assets due to cost savings and performance improvements. The improvements have more than offset the impact on the Cooper asset of the lower oil price assumptions, and have resulted in a net write back of $US330 million after tax. All up, the net impact is a charge of about $US690 million after tax in the first half, signalling Santos will fall well into the red, based on UBS’s estimate of a net underlying profit for the first half of $US169 million.
Stockland Corporation (SGP):
Stockland will start work on a new 5000-lot housing community in Melbourne’s west later this year after the Victorian government approved the new 1500-hectare suburb of Mount Atkinson. Victorian Planning Minister Richard Wynne signed off on the Mount Atkinson precinct structure plan on Tuesday after Stockland and landowner Mount Atkinson Holdings agreed to invest $100 million in funding the construction of two schools, a future train station and other community facilities. Stockland, which reports its full-year results on Wednesday, reached agreement in May with Mount Atkinson Holdings – controlled by Melbourne’s wealthy Scalzo, Goldfinger and Caligiuri families – to develop a 315-hectare site within a bigger 700-hectare parcel owned by the consortium. Stockland will split the profits on the new estate with Mount Atkinson Holdings, which plans to develop housing, retail and a town centre on the remainder of the site.
Transurban Group (TCL):
Transurban continues to rake in cash from its 13 Australian and two US toll roads as rising congestion in cities encourages drivers to pay toll fares to avoid getting stuck in traffic. Transurban’s proportionate earnings before interest, tax, depreciation and amortisation, which measure income relative to its ownership stakes in its toll road assets, rose 10 per cent to $1.63 billion in the year to June 30. Annual net profit leapt more than eightfold to $209 million from $22 million a year earlier, but profits in 2015-16 were hurt by costs associated with its $1.9 billion takeover of Brisbane’s Airportlink M7 toll road. Transurban is forecasting a full-year dividend of 56¢ for 2017-18, up 8.7 per cent on the previous year. Some analysts believe the stock is overvalued, warning Transurban – which is carrying more than $13 billion in group debt – is vulnerable to rising interest rates.
Yancoal Australia Limited (YAL):
The Takeovers Panel has rejected an attempt by Yancoal’s minority shareholders to block the Chinese-backed company’s $US2.5 billion ($3.1 billion) capital raising, which will be used to fund its acquisition of Rio Tinto’s Coal & Allied business Mr Taylor, who controls a 4.5 per cent stake in Yancoal, has argued that the entitlement offer ‘‘has been priced and structured in a manner [that will be] unnecessarily highly dilutive’’ and ‘‘does not allow existing minority shareholders a reasonable and equal opportunity to participate’’.
(Source: AIMS)
Latest comments