Origin Energy Limited (ORG):
Goldman Sachs has upgraded Origin Energy to neutral from sell, to reflect Origin's "much stronger earnings outlook at its fiscal year results." The broker said that since it added Origin to its sell list in February, the shares are up 8.3 per cent versus the broker's energy sector coverage, which is up 0.8 per cent. "Given our range-bound oil price view (with some upside risk posed by the possibility of deeper OPEC cuts), and Origin's increasing stability, we now see risk/reward more balanced. "The August reporting season was generally strong for the energy sector, they said, which led to upgrades for earnings and price targets across all stocks. In terms of outlook and guidance, the two key positive surprises were CNOOC (15-20 per cent reserves upgrades coming if oil prices stay flat) and Origin Energy (much stronger FY18 energy markets guidance, led by improving electricity market dynamics).
Commonwealth Bank of Australia (CBA):
Robert Whitfield, a potential successor to CBA boss Ian Narev, has been appointed a non-executive director of CBA. CBA chairman Catherine Livingstone said in a statement Mr Whitfield's "broad risk management and public sector experience, as well as his extensive banking experience, will deepen the board's existing skills and expertise." Also, Commonwealth Bank of Australia's price-earnings premium to its peer group may be at a seven year low, but the stock remains expensive, Street Talk reports. But Wiles tells investors CBA's premium is now harder to justify and that Morgan Stanley's earnings estimates to do not factor in potential penalties and or other implications from AUSTRAC's court action against the bank. "The outlook for retail banking has become more challenging and the problems at ANZ and NAB have now been largely addressed," the research said. CBA's apparent failure to properly monitor transactions for money laundering and possible terrorism funding makes action from American regulators inevitable, say financial crime experts. American lawyers have told Thomson Reuters that CBA was already responding to information requests from a number of US agencies with differing mandates and enforcement agendas and the announcement of a formal investigation, a precursor to enforcement action, is now only a matter of time.
Liquefied Natural Gas Limited (LNG):
A softening in east coast gas prices in recent weeks has yet to bring down prices offered to manufacturers to levels they say are affordable, adding pressure to the federal government to slap restrictions on Queensland LNG exports for 2018. Sources close to gas buyers say that while the $20-plus a gigajoule prices offered to shell-shocked manufacturers in February-March are no more, offers of $17-$18 a gigajoule for firm deliveries are still common, about triple the level of expiring contracts. Those prices are still well above wholesale prices for Australian gas in key north Asian markets. That’s left manufacturers fuming and calling for Canberra to act as soon as possible to trigger the Domestic Gas Security Mechanism to cap exports and make more gas available in the eastern and southern states.
AMP Limited (AMP):
AMP on Sunday said they had not started a formal CEO search, but sources said work was going on in the background should the company’s share price and performance come under renewed pressure. ‘‘We have not commenced a search for a CEO,’’ an AMP spokesman said. ‘‘The board reviews succession planning twice a year as part of its normal governance procedures working with a number of external providers including Egon Zehnder.’’
Primary Health Care Limited (PRY):
Australian medical centres and pathology operator Primary Health Care has been dealt a major blow to its Asian growth strategy with possible jointventure partner, Indonesia’s Astra International, walking away from talks in recent weeks. Primary revealed its reported net profit for 2017 was a $516.8 million loss from a year-earlier profit of $74.9 million, with a $587 million impairment charge affecting profitability. Underlying net profit was $92.1 million, in line with recently lowered guidance. Primary has also been dealing with worker unrest and strikes at its Victorian Dorevitch pathology labs.
Westpac Banking Corporation (WBC):
Westpac Banking Corp has created a ‘‘data accelerator’’ to build new technology businesses from anonymised data sets, and will offer access to it to institutional banking clients seeking to turn data into assets. FUELD, which has been set up in partnership with Stone & Chalk, will provide early-stage start-ups access to the Data Republic data-sharing platform. The accelerator will be run by the former CEO of Fishburners, Murray Hurps. Macgregor Duncan, Westpac’s cohead of business development, said start-ups that could emerge from the program may examine new credit models and applications for algorithmic real-time property valuations.
ASIC
ASIC has launched civil proceedings against Westpac for allegedly failing to properly assess whether borrowers could repay their home loans – a claim the bank strongly denies. The regulator alleges Westpac approved loans in circumstances where a ‘‘proper assessment’’ of a borrower’s ability to repay, based on actual spending, would have shown a monthly shortfall. In court filings obtained by The Australian Financial Review, ASIC said the HEM benchmark was based on ‘‘conservative’’ estimates of household expenditure.
Suncorp Group Limited (SUN):
ASX-listed insurer Suncorp Group wants to see tenancy laws across the country updated, so the rising cohort of renters can have an alternative to stumping up for a costly bond at the beginning of a tenancy. Suncorp is readying to offer a surety bond to landlords via its Terri Scheer landlord insurance network. The product, called Trustbond and created by Spanish startup Traity, lets tenants avoid paying a traditional bond and instead pay a premium, which is a proportion of the rent paid for the term of the lease.
Topbetta Holdings Limited (TBH):
Small-cap wagering stock TopBetta hopes a big spring carnival for its The Global Tote business-to-business betting tote will attract more local and global bookmakers to use its service. The company is confident of luring several corporate bookmakers to join The Global Tote, which it is pitching as a wholesale alternative to the totes run by wagering giants Tabcorp and Tatts Group. All bets of a certain type are placed in a pool and odds are calculated via a ‘‘totalisator’’, with the pool shared among all winning bets, less a commission. It launched The Global Tote last December and in June clinched a deal with prominent Australian professional punter Sean Bartholomew to bet about $200 million into pools on Australian races during the following 12 months.
BHP Billiton Limited (BHP):
BHP's boss of its Olympic Dam operations says the company is now "very optimistic" that the heap leach copper extraction process it has been testing since mid-2013 is robust enough to pave the way for a potential doubling of output at its giant copper mine. Jacqui McGill, BHP Olympic Dam asset president, said on Monday the copper being produced from a test site encompassing 12 six-metre-high metal "cribs" each processing 25 tonnes of ore was top rate. The ore is trucked about 560 kilometres to the test site at Wingfield in Adelaide's industrial suburbs from Olympic Dam. "This is extraordinary quality copper," she said. "Every parameter that you are measuring it against, it has delivered".
Woolworths (WOW):
Woolworths has quadrupled capital investment since last year in cutting energy usage and improving energy efficiency and will increase installation of solar PV panels at supermarkets as it seeks to rein in soaring energy costs. Investments are being made to switch all lighting in stores to LED, improve efficiency in refrigeration and air conditioning, as well as in a new energy management centre, Tony Louka, head of the energy transformation project, told an energy users' forum in Sydney. The company is also investigating direct purchase contracts for renewable energy, through corporate power purchase agreements, and is looking at opportunities for battery storage.
Ellerston Capital:
Former Reserve Bank governor Glenn Stevens has taken on a role as an adviser at Ellerston Capital’s new global macro fund. Mr Stevens, who retired from the central bank one year ago, will take a permanent role on Ellerston Global Macro’s Investment Counsel and will provide insights to the fund’s portfolio managers on international market and policy matters.‘‘Our main focus is on his international perspective and how other central banks see their economies. He’s here to challenge and debate all of our investment theses,’’ said Ellerston Global Macro head Brett Gillespie.
The Network Holdings Limited (TEN):
Murdoch-controlled 21st Century Fox faces getting close to nothing in the payout of Network Ten creditors if it does not come to a new content supply agreement with the free-to-air broadcaster’s likely new owner, CBS. The US studio, of which Lachlan Murdoch is executive chairman, had its debt claim assessed by administrator Korda-Menthaat$200million.Buttheadministrator’s report says Fox will only receive $3.4 million if it does not come to a renegotiated content deal with Ten. Murdoch-controlled 21st Century Fox faces getting close to nothing in the payout of Network Ten creditors if it does not come to a new content supply agreement with the free-to-air broadcaster’s likely new owner CBS.
Harvey Norman (HVN):
Harvey Norman franchisees may face less favourable trading terms with suppliers following the retailer’s decision to make it clear it was not liable to pay for their stock. Harvey Norman franchisees may face less favourable trading terms with suppliers following the retailer’s decision to make it clear it was not liable to pay for their stock. Days after Harvey Norman changed the accounting treatment for franchisee receivables in its 2017 accounts, analysts are still trying to understand the implications for franchisees and Harvey Norman’s future competitiveness amid increased competition from JB Hi-Fi and The Good Guys and the imminent arrival of Amazon. Some analysts believe the move may change the nature of the relationship between franchisees and suppliers, forcing franchisees to negotiate terms more directly with suppliers rather than taking advantage of Harvey Norman’s buying power.
iSelect (ISU):
iSelect is hoping its move to put openplan kiosks with free Wi-Fi, coffee and children’s play areas into shopping malls across the country will engage disenfranchised consumers who are suspicious of private health insurance hikes. As part of chief executive Scott Wilson’s plan to turn iSelect into a ‘‘life admin store’’, the company will launch ‘‘physical retail presences’’ into shopping centres in Brisbane, Adelaide, the Gold Coast as well as Sydney and Melbourne throughout December. Data from the Australian Prudential Regulation Authority for the June quarter revealed the number of Australians with health insurance declined for the first time in a decade, and declines in hospital and extras cover were seen across every state and territory. Mr Wilson said 18 per cent of all health insurance policies in Australia were sold through iSelect, but it too had seen a downturn. ‘‘There has been eight consecutive quarters of decline in health insurance ... we’ve seen the same trends as the industry,’’ the chief executive Sott Wilson said.
(Source: AIMS)
Goldman Sachs has upgraded Origin Energy to neutral from sell, to reflect Origin's "much stronger earnings outlook at its fiscal year results." The broker said that since it added Origin to its sell list in February, the shares are up 8.3 per cent versus the broker's energy sector coverage, which is up 0.8 per cent. "Given our range-bound oil price view (with some upside risk posed by the possibility of deeper OPEC cuts), and Origin's increasing stability, we now see risk/reward more balanced. "The August reporting season was generally strong for the energy sector, they said, which led to upgrades for earnings and price targets across all stocks. In terms of outlook and guidance, the two key positive surprises were CNOOC (15-20 per cent reserves upgrades coming if oil prices stay flat) and Origin Energy (much stronger FY18 energy markets guidance, led by improving electricity market dynamics).
Commonwealth Bank of Australia (CBA):
Robert Whitfield, a potential successor to CBA boss Ian Narev, has been appointed a non-executive director of CBA. CBA chairman Catherine Livingstone said in a statement Mr Whitfield's "broad risk management and public sector experience, as well as his extensive banking experience, will deepen the board's existing skills and expertise." Also, Commonwealth Bank of Australia's price-earnings premium to its peer group may be at a seven year low, but the stock remains expensive, Street Talk reports. But Wiles tells investors CBA's premium is now harder to justify and that Morgan Stanley's earnings estimates to do not factor in potential penalties and or other implications from AUSTRAC's court action against the bank. "The outlook for retail banking has become more challenging and the problems at ANZ and NAB have now been largely addressed," the research said. CBA's apparent failure to properly monitor transactions for money laundering and possible terrorism funding makes action from American regulators inevitable, say financial crime experts. American lawyers have told Thomson Reuters that CBA was already responding to information requests from a number of US agencies with differing mandates and enforcement agendas and the announcement of a formal investigation, a precursor to enforcement action, is now only a matter of time.
Liquefied Natural Gas Limited (LNG):
A softening in east coast gas prices in recent weeks has yet to bring down prices offered to manufacturers to levels they say are affordable, adding pressure to the federal government to slap restrictions on Queensland LNG exports for 2018. Sources close to gas buyers say that while the $20-plus a gigajoule prices offered to shell-shocked manufacturers in February-March are no more, offers of $17-$18 a gigajoule for firm deliveries are still common, about triple the level of expiring contracts. Those prices are still well above wholesale prices for Australian gas in key north Asian markets. That’s left manufacturers fuming and calling for Canberra to act as soon as possible to trigger the Domestic Gas Security Mechanism to cap exports and make more gas available in the eastern and southern states.
AMP Limited (AMP):
AMP on Sunday said they had not started a formal CEO search, but sources said work was going on in the background should the company’s share price and performance come under renewed pressure. ‘‘We have not commenced a search for a CEO,’’ an AMP spokesman said. ‘‘The board reviews succession planning twice a year as part of its normal governance procedures working with a number of external providers including Egon Zehnder.’’
Primary Health Care Limited (PRY):
Australian medical centres and pathology operator Primary Health Care has been dealt a major blow to its Asian growth strategy with possible jointventure partner, Indonesia’s Astra International, walking away from talks in recent weeks. Primary revealed its reported net profit for 2017 was a $516.8 million loss from a year-earlier profit of $74.9 million, with a $587 million impairment charge affecting profitability. Underlying net profit was $92.1 million, in line with recently lowered guidance. Primary has also been dealing with worker unrest and strikes at its Victorian Dorevitch pathology labs.
Westpac Banking Corporation (WBC):
Westpac Banking Corp has created a ‘‘data accelerator’’ to build new technology businesses from anonymised data sets, and will offer access to it to institutional banking clients seeking to turn data into assets. FUELD, which has been set up in partnership with Stone & Chalk, will provide early-stage start-ups access to the Data Republic data-sharing platform. The accelerator will be run by the former CEO of Fishburners, Murray Hurps. Macgregor Duncan, Westpac’s cohead of business development, said start-ups that could emerge from the program may examine new credit models and applications for algorithmic real-time property valuations.
ASIC
ASIC has launched civil proceedings against Westpac for allegedly failing to properly assess whether borrowers could repay their home loans – a claim the bank strongly denies. The regulator alleges Westpac approved loans in circumstances where a ‘‘proper assessment’’ of a borrower’s ability to repay, based on actual spending, would have shown a monthly shortfall. In court filings obtained by The Australian Financial Review, ASIC said the HEM benchmark was based on ‘‘conservative’’ estimates of household expenditure.
Suncorp Group Limited (SUN):
ASX-listed insurer Suncorp Group wants to see tenancy laws across the country updated, so the rising cohort of renters can have an alternative to stumping up for a costly bond at the beginning of a tenancy. Suncorp is readying to offer a surety bond to landlords via its Terri Scheer landlord insurance network. The product, called Trustbond and created by Spanish startup Traity, lets tenants avoid paying a traditional bond and instead pay a premium, which is a proportion of the rent paid for the term of the lease.
Topbetta Holdings Limited (TBH):
Small-cap wagering stock TopBetta hopes a big spring carnival for its The Global Tote business-to-business betting tote will attract more local and global bookmakers to use its service. The company is confident of luring several corporate bookmakers to join The Global Tote, which it is pitching as a wholesale alternative to the totes run by wagering giants Tabcorp and Tatts Group. All bets of a certain type are placed in a pool and odds are calculated via a ‘‘totalisator’’, with the pool shared among all winning bets, less a commission. It launched The Global Tote last December and in June clinched a deal with prominent Australian professional punter Sean Bartholomew to bet about $200 million into pools on Australian races during the following 12 months.
BHP Billiton Limited (BHP):
BHP's boss of its Olympic Dam operations says the company is now "very optimistic" that the heap leach copper extraction process it has been testing since mid-2013 is robust enough to pave the way for a potential doubling of output at its giant copper mine. Jacqui McGill, BHP Olympic Dam asset president, said on Monday the copper being produced from a test site encompassing 12 six-metre-high metal "cribs" each processing 25 tonnes of ore was top rate. The ore is trucked about 560 kilometres to the test site at Wingfield in Adelaide's industrial suburbs from Olympic Dam. "This is extraordinary quality copper," she said. "Every parameter that you are measuring it against, it has delivered".
Woolworths (WOW):
Woolworths has quadrupled capital investment since last year in cutting energy usage and improving energy efficiency and will increase installation of solar PV panels at supermarkets as it seeks to rein in soaring energy costs. Investments are being made to switch all lighting in stores to LED, improve efficiency in refrigeration and air conditioning, as well as in a new energy management centre, Tony Louka, head of the energy transformation project, told an energy users' forum in Sydney. The company is also investigating direct purchase contracts for renewable energy, through corporate power purchase agreements, and is looking at opportunities for battery storage.
Ellerston Capital:
Former Reserve Bank governor Glenn Stevens has taken on a role as an adviser at Ellerston Capital’s new global macro fund. Mr Stevens, who retired from the central bank one year ago, will take a permanent role on Ellerston Global Macro’s Investment Counsel and will provide insights to the fund’s portfolio managers on international market and policy matters.‘‘Our main focus is on his international perspective and how other central banks see their economies. He’s here to challenge and debate all of our investment theses,’’ said Ellerston Global Macro head Brett Gillespie.
The Network Holdings Limited (TEN):
Murdoch-controlled 21st Century Fox faces getting close to nothing in the payout of Network Ten creditors if it does not come to a new content supply agreement with the free-to-air broadcaster’s likely new owner, CBS. The US studio, of which Lachlan Murdoch is executive chairman, had its debt claim assessed by administrator Korda-Menthaat$200million.Buttheadministrator’s report says Fox will only receive $3.4 million if it does not come to a renegotiated content deal with Ten. Murdoch-controlled 21st Century Fox faces getting close to nothing in the payout of Network Ten creditors if it does not come to a new content supply agreement with the free-to-air broadcaster’s likely new owner CBS.
Harvey Norman (HVN):
Harvey Norman franchisees may face less favourable trading terms with suppliers following the retailer’s decision to make it clear it was not liable to pay for their stock. Harvey Norman franchisees may face less favourable trading terms with suppliers following the retailer’s decision to make it clear it was not liable to pay for their stock. Days after Harvey Norman changed the accounting treatment for franchisee receivables in its 2017 accounts, analysts are still trying to understand the implications for franchisees and Harvey Norman’s future competitiveness amid increased competition from JB Hi-Fi and The Good Guys and the imminent arrival of Amazon. Some analysts believe the move may change the nature of the relationship between franchisees and suppliers, forcing franchisees to negotiate terms more directly with suppliers rather than taking advantage of Harvey Norman’s buying power.
iSelect (ISU):
iSelect is hoping its move to put openplan kiosks with free Wi-Fi, coffee and children’s play areas into shopping malls across the country will engage disenfranchised consumers who are suspicious of private health insurance hikes. As part of chief executive Scott Wilson’s plan to turn iSelect into a ‘‘life admin store’’, the company will launch ‘‘physical retail presences’’ into shopping centres in Brisbane, Adelaide, the Gold Coast as well as Sydney and Melbourne throughout December. Data from the Australian Prudential Regulation Authority for the June quarter revealed the number of Australians with health insurance declined for the first time in a decade, and declines in hospital and extras cover were seen across every state and territory. Mr Wilson said 18 per cent of all health insurance policies in Australia were sold through iSelect, but it too had seen a downturn. ‘‘There has been eight consecutive quarters of decline in health insurance ... we’ve seen the same trends as the industry,’’ the chief executive Sott Wilson said.
(Source: AIMS)
Latest comments