Bendigo and Adelaide Bank Ltd (BEN):
Bendigo and Adelaide Bank shares have sagged by 5 per cent after chief executive Mike Hirst told the group's annual general meeting the prudential regulator's lending limits had scuttled growth momentum and made it harder to compete. Mr Hirst said the Australian Prudential Regulation Authority's caps on investor and interest-only lending had forced Bendigo to "slam on the brakes" and "meant some of the growth momentum we experienced in the year just gone has been interrupted". "We expect total balance sheet growth to be relatively flat in the first half as we maintain our long held tenet of only writing business at prices that reflect the risk being taken," he told the AGM in Bendigo on Tuesday morning. Bendigo shares were trading at $11.36 just after midday, down 54¢ or 4.5 per cent. Stockbroker Shaw and Partners reacted to the AGM comments by slapping a "sell" recommendation on the stock and slicing its price target by 57¢ to $11.19. Macquarie analyst Victor German said Bendigo's aggressive repricing to get under the APRA caps "appear to have taken a toll on balance sheet growth". "We continue to expect Bendigo to reinvest some of its margin gains back into pricing to address its recent balance sheet growth underperformance," Mr German said. The market was also spooked by Mr Hirst pointing to fiercer competition in areas where APRA is not focused, such as business lending and mortgages for owner occupiers repaying principal and interest. The market is concerned renewed competition in these areas will put pressure on lending margins. "As pretty much everyone has had to do the same thing [cut interest only and investor lending], the corollary has been increased price and credit competition in those areas that aren't subject to restriction - for us, owner occupied home loans and business lending," Mr Hirst said.
Emeco Holdings Limited (EHL):
Mining services provider Emeco has confirmed today that it has acquired national equipment rental and maintenance business Force Equipment for $69.8 million. Force will add 179 machines to Emeco’s fleet, taking it to 897 pieces, the company said in a statement. Force generates annual revenue of $86.1 million and operating earnings of $23.6 million. The acquisition was foreshadowed by The Australian and will be paid for through an equity raising overseen by Macquarie Capital and Morgans. Shares for the entitlement offer will be sold at a 12.5 per cent discount to the last closing price of 24c. It will enable shareholders to buy one new share for every 6.4 existing shares.
Origin Energy Ltd (ORG):
Origin Energy has lifted its September quarter oil and gas revenue 58 per cent thanks to the ramp-up at its Australia Pacific liquefied natural gas project in Queensland and higher energy prices. The energy producer and retailer said oil and gas revenue for the three months to September 30 rose to $678.6 million up 58 per cent on the same period a year earlier, but it was up just one per cent on the preceding three months. Sales volume for the quarter was up 16 per cent on a year ago at 91.4 petajoules, but was down one per cent from the June quarter. Production was largely steady on the previous three months, at 89.1 petajoules, but up 20 per cent on the same period in 2016 because of higher APLNG output and increased production from the Otway fields. APLNG, in which Origin holds a 37.5 per cent stake, has ramped up production over the past 18 months, and produced the first cargo from its second train in October 2016. The plant had shipped a total of 32 cargoes during the September quarter, Origin chief executive Frank Calabria said. Origin also supplies gas from its coal seam wells to the project, which counts Conoco Phillips and China Petrochemical Corporation as partners. Origin Energy in September agreed to sell its Lattice Energy conventional oil and gas exploration business to Kerry Stokes-backed Beach Energy in a $1.585 billion deal. The deal covers oil & gas projects in the Otway, Cooper, Bass and Bonaparte basins, an interest in the Perth Basin and stakes in the Kupe gas project and the Canterbury basin in New Zealand.
South32 Ltd (S32):
South32 is believed to have hired Bank of America Merrill Lynch to vie for Rio Tinto’s $2 billion Queensland coal mining assets as suitors prepare to lodge first round bids in the coming weeks. The listed BHP Billiton spin-off is in acquisition mode and while it has hired BAML to compete for the Hail Creek and Kestrel mines, sources say the miner is deliberating over how much exposure it wants to coal within its portfolio. South32 generates most of its earnings from manganese, followed by base and precious metals, metallurgical coal, aluminium, energy coal and alumina. While the price of coal has rallied of late, global supply of metallurgical coal is plentiful and Australia remains in search of cleaner, alternative sources of energy, which will hurt the demand outlook for energy coal in future years. Other parties lining up to submit first round bids on December 6 are AMCI and Riverstone, Apollo private equity with the Canada Pension Plan, thought to be advised by Citi, EMR Capital and Whitehaven Coal, advised by Deutsche and potentially JPMorgan. Also in the mix are Anglo American and US-based Peabody Energy, which recently wrestled itself out of Chapter 11 bankruptcy.
Slater & Gordon Limited (SGH):
Slater and Gordon's long-suffering shareholders will be nearly wiped out in the company's rescue plan and many will be left with parcels of shares so small they cannot be sold on market. The dire fate of Slater and Gordon's shareholders was laid bare in more than 1000 pages of documents filed to the ASX on Monday. But despite shareholders facing near wipe out, the deal is a better option than placing the company in administration where the shares will be worth zero, according to an independent expert's report on the deal by KPMG. The rescue plan will salvage Slater and Gordon's Australian business. The recapitalisation comes after two horror years during which the company has teetered on the brink of insolvency after a $1.3 billion deal in the UK blew up. After the rescue, current shareholders will only hold 5 per cent of the company's shares. Slater and Gordon's senior lenders led by America's Anchorage Capital Group will hold the other 95 per cent.
Westpac Banking Corp (WBC):
Westpac, the nation's second largest mortgage lender, is set to blitz "liar loans" by introducing stringent tests on residential property borrowers' existing and future capacity to meet their repayments. Clients will be quizzed on dozens of potential scenarios that might impact on their future capacity to repay, including having dependents with special needs that might require long-term spending on care and treatment. Mortgage brokers' onus of proof will be switched from establishing whether a loan is suitable for a client to making a declaration as to why it is "not unsuitable". It comes amid growing pressure from prudential and consumer regulators to tighten lending criteria because of concerns that excessive household debt could contribute to systemic economic problems if the economy slows. "Westpac is committed to responsible lending and meeting our conduct obligations," according to a bank spokesman. "The questions are designed to help understand your client's motivations and align the product to their requirements." "The declarations are there to prompt (a mortgage broker) to explain the implications of product choice and their features so a client can make more informed decisions." Westpac had the largest proportion of loans made on interest-only terms, reflecting a book weighted towards investors who use interest-only loans to take advantage of negative gearing tax benefits. New overseas and investor borrowers are being squeezed out of the residential market by tough new borrowing criteria, lending speed limits and closer scrutiny of the borrowers' capacity to repay. APRA appears to want to move away from prescriptive restrictions, such as 30 per cent speed limits on investor growth, towards bringing credit in line with income growth. This would be a shift from the existing loan to value model, which has allowed lending to increase as property values increase. This encourages property investors to increase risk as property values rise. Loan-to-income limits the ratio and helps lenders better manage risks.
Woolworths Limited (WOW):
Woolworths continues to take market share from Coles and independent retailers, lifting Australian food sales 4.7 per cent to $9.6 billion in the first quarter of 2018 after winning back family shoppers. On a same-store basis, Woolworths supermarket sales rose 4.9 per cent, in line with analyst forecasts about 5 per cent and outpacing Coles, which last week reported same-store food sales growth of 0.3 per cent, the lowest since Coles was acquired by Wesfarmers ten years ago. It was Woolworths' fifth consecutive quarter of comparable store food sales growth and followed gains of 6.4 per cent in the June quarter 2017 and 0.7 per cent in the year-ago period. Woolworths is winning back family and big-basket shoppers after investing more than $1 billion over the last 18 months into reducing fresh and packaged grocery prices and improving service in stores. Comparable transactions rose 4.6 per cent, items per basket rose 1.4 per cent, boosting comparable items sold by 6 per cent. Analysts expect Woolworths' supermarkets to return to profit growth this year as the heavy investment into price and service eases. Supermarket earnings fell 2.4 per cent in 2017 but rose 13 per cent in the June-half and 8.3 per cent over the year excluding store staff bonuses.
（Source: AIMS）
Bendigo and Adelaide Bank shares have sagged by 5 per cent after chief executive Mike Hirst told the group's annual general meeting the prudential regulator's lending limits had scuttled growth momentum and made it harder to compete. Mr Hirst said the Australian Prudential Regulation Authority's caps on investor and interest-only lending had forced Bendigo to "slam on the brakes" and "meant some of the growth momentum we experienced in the year just gone has been interrupted". "We expect total balance sheet growth to be relatively flat in the first half as we maintain our long held tenet of only writing business at prices that reflect the risk being taken," he told the AGM in Bendigo on Tuesday morning. Bendigo shares were trading at $11.36 just after midday, down 54¢ or 4.5 per cent. Stockbroker Shaw and Partners reacted to the AGM comments by slapping a "sell" recommendation on the stock and slicing its price target by 57¢ to $11.19. Macquarie analyst Victor German said Bendigo's aggressive repricing to get under the APRA caps "appear to have taken a toll on balance sheet growth". "We continue to expect Bendigo to reinvest some of its margin gains back into pricing to address its recent balance sheet growth underperformance," Mr German said. The market was also spooked by Mr Hirst pointing to fiercer competition in areas where APRA is not focused, such as business lending and mortgages for owner occupiers repaying principal and interest. The market is concerned renewed competition in these areas will put pressure on lending margins. "As pretty much everyone has had to do the same thing [cut interest only and investor lending], the corollary has been increased price and credit competition in those areas that aren't subject to restriction - for us, owner occupied home loans and business lending," Mr Hirst said.
Emeco Holdings Limited (EHL):
Mining services provider Emeco has confirmed today that it has acquired national equipment rental and maintenance business Force Equipment for $69.8 million. Force will add 179 machines to Emeco’s fleet, taking it to 897 pieces, the company said in a statement. Force generates annual revenue of $86.1 million and operating earnings of $23.6 million. The acquisition was foreshadowed by The Australian and will be paid for through an equity raising overseen by Macquarie Capital and Morgans. Shares for the entitlement offer will be sold at a 12.5 per cent discount to the last closing price of 24c. It will enable shareholders to buy one new share for every 6.4 existing shares.
Origin Energy Ltd (ORG):
Origin Energy has lifted its September quarter oil and gas revenue 58 per cent thanks to the ramp-up at its Australia Pacific liquefied natural gas project in Queensland and higher energy prices. The energy producer and retailer said oil and gas revenue for the three months to September 30 rose to $678.6 million up 58 per cent on the same period a year earlier, but it was up just one per cent on the preceding three months. Sales volume for the quarter was up 16 per cent on a year ago at 91.4 petajoules, but was down one per cent from the June quarter. Production was largely steady on the previous three months, at 89.1 petajoules, but up 20 per cent on the same period in 2016 because of higher APLNG output and increased production from the Otway fields. APLNG, in which Origin holds a 37.5 per cent stake, has ramped up production over the past 18 months, and produced the first cargo from its second train in October 2016. The plant had shipped a total of 32 cargoes during the September quarter, Origin chief executive Frank Calabria said. Origin also supplies gas from its coal seam wells to the project, which counts Conoco Phillips and China Petrochemical Corporation as partners. Origin Energy in September agreed to sell its Lattice Energy conventional oil and gas exploration business to Kerry Stokes-backed Beach Energy in a $1.585 billion deal. The deal covers oil & gas projects in the Otway, Cooper, Bass and Bonaparte basins, an interest in the Perth Basin and stakes in the Kupe gas project and the Canterbury basin in New Zealand.
South32 Ltd (S32):
South32 is believed to have hired Bank of America Merrill Lynch to vie for Rio Tinto’s $2 billion Queensland coal mining assets as suitors prepare to lodge first round bids in the coming weeks. The listed BHP Billiton spin-off is in acquisition mode and while it has hired BAML to compete for the Hail Creek and Kestrel mines, sources say the miner is deliberating over how much exposure it wants to coal within its portfolio. South32 generates most of its earnings from manganese, followed by base and precious metals, metallurgical coal, aluminium, energy coal and alumina. While the price of coal has rallied of late, global supply of metallurgical coal is plentiful and Australia remains in search of cleaner, alternative sources of energy, which will hurt the demand outlook for energy coal in future years. Other parties lining up to submit first round bids on December 6 are AMCI and Riverstone, Apollo private equity with the Canada Pension Plan, thought to be advised by Citi, EMR Capital and Whitehaven Coal, advised by Deutsche and potentially JPMorgan. Also in the mix are Anglo American and US-based Peabody Energy, which recently wrestled itself out of Chapter 11 bankruptcy.
Slater & Gordon Limited (SGH):
Slater and Gordon's long-suffering shareholders will be nearly wiped out in the company's rescue plan and many will be left with parcels of shares so small they cannot be sold on market. The dire fate of Slater and Gordon's shareholders was laid bare in more than 1000 pages of documents filed to the ASX on Monday. But despite shareholders facing near wipe out, the deal is a better option than placing the company in administration where the shares will be worth zero, according to an independent expert's report on the deal by KPMG. The rescue plan will salvage Slater and Gordon's Australian business. The recapitalisation comes after two horror years during which the company has teetered on the brink of insolvency after a $1.3 billion deal in the UK blew up. After the rescue, current shareholders will only hold 5 per cent of the company's shares. Slater and Gordon's senior lenders led by America's Anchorage Capital Group will hold the other 95 per cent.
Westpac Banking Corp (WBC):
Westpac, the nation's second largest mortgage lender, is set to blitz "liar loans" by introducing stringent tests on residential property borrowers' existing and future capacity to meet their repayments. Clients will be quizzed on dozens of potential scenarios that might impact on their future capacity to repay, including having dependents with special needs that might require long-term spending on care and treatment. Mortgage brokers' onus of proof will be switched from establishing whether a loan is suitable for a client to making a declaration as to why it is "not unsuitable". It comes amid growing pressure from prudential and consumer regulators to tighten lending criteria because of concerns that excessive household debt could contribute to systemic economic problems if the economy slows. "Westpac is committed to responsible lending and meeting our conduct obligations," according to a bank spokesman. "The questions are designed to help understand your client's motivations and align the product to their requirements." "The declarations are there to prompt (a mortgage broker) to explain the implications of product choice and their features so a client can make more informed decisions." Westpac had the largest proportion of loans made on interest-only terms, reflecting a book weighted towards investors who use interest-only loans to take advantage of negative gearing tax benefits. New overseas and investor borrowers are being squeezed out of the residential market by tough new borrowing criteria, lending speed limits and closer scrutiny of the borrowers' capacity to repay. APRA appears to want to move away from prescriptive restrictions, such as 30 per cent speed limits on investor growth, towards bringing credit in line with income growth. This would be a shift from the existing loan to value model, which has allowed lending to increase as property values increase. This encourages property investors to increase risk as property values rise. Loan-to-income limits the ratio and helps lenders better manage risks.
Woolworths Limited (WOW):
Woolworths continues to take market share from Coles and independent retailers, lifting Australian food sales 4.7 per cent to $9.6 billion in the first quarter of 2018 after winning back family shoppers. On a same-store basis, Woolworths supermarket sales rose 4.9 per cent, in line with analyst forecasts about 5 per cent and outpacing Coles, which last week reported same-store food sales growth of 0.3 per cent, the lowest since Coles was acquired by Wesfarmers ten years ago. It was Woolworths' fifth consecutive quarter of comparable store food sales growth and followed gains of 6.4 per cent in the June quarter 2017 and 0.7 per cent in the year-ago period. Woolworths is winning back family and big-basket shoppers after investing more than $1 billion over the last 18 months into reducing fresh and packaged grocery prices and improving service in stores. Comparable transactions rose 4.6 per cent, items per basket rose 1.4 per cent, boosting comparable items sold by 6 per cent. Analysts expect Woolworths' supermarkets to return to profit growth this year as the heavy investment into price and service eases. Supermarket earnings fell 2.4 per cent in 2017 but rose 13 per cent in the June-half and 8.3 per cent over the year excluding store staff bonuses.
（Source: AIMS）
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