Australia and New Zealand Banking Group (ANZ):
An adverse outcome from the bank sector inquiry may lead to a smaller buyback from ANZ, according to Morgan Stanley's banking team. They noted that ANZ is on track to complete its $1.5 billion buyback in May and suggested that ANZ could undertake a further $4 billion of buybacks over the next two years. However, the analysts said that any buyback may be smaller than their $4 billion forecast. ANZ should resume growing dividend payments in fiscal 2019 but a special dividend is unlikely as ANZ's Australian franking credits were below $200 million at the end of 2017, well below the peer average of $1.1 billion, the analysts said. ANZ shares were down 1.1 per cent, a slightly worse performance than its big four peers, which were all down by around 1 per cent.
Aurizon Holdings Ltd (AZJ):
Australia’s competition regulator says it has strong concerns about a proposal for Pacific National to buy freight businesses from Aurizon Holdings in Queensland. The Australian Competition and Consumer Commission said it has raised preliminary competition concerns over Pacific National’s planned takeover of Aurizon’s Queensland intermodal freight-haulage business and intermodal rail terminal at Acacia Ridge in Brisbane because the two companies are currently the only providers of intermodal rail line haul services in the state. The ACCC said it worries the takeover could result in increased prices and reduced service for freight hauled between Brisbane and far north Queensland. The regulator said it expects to make a final decision on the deal on May 24.
Centuria Capital Group (CNI):
The listed Centuria Capital Group and West Australian funds manager Primewest are squaring off as they both seek to buy 80 Grenfell Street, a top-class office tower that Blackstone is selling for close to $200 million. For Blackstone, the transaction again demonstrates its flexibility in handling its $6 billion worth of Australia assets. This year it is also selling two office towers in Brisbane, has a half-stake in 275 Kent St on the block in Sydney, is selling a homemaker centre, and is carving off properties from its collection of shopping malls.
Commonwealth Bank of Australia (CBA):
The Commonwealth Bank has done nothing to get rid of commissions paid to mortgage brokers more than a year after chief executive Ian Narev recognised they can lead to customers paying more interest and becoming more likely to fall behind on home loan payments, the financial services royal commission has heard. In a confidential submission to an industry review of remuneration structures, sent in February last year, Mr Narev said that “the use of loan size linked with upfront and trailing commissions for third parties can lead to poor customer outcomes”. In April last year, the review, led by Stephen Sedgwick, recommended ending the link between sales and remuneration of bank staff.
Freedom Foods Group Ltd (FNP):
Low-key health food and long-life dairy processor Freedom Foods is moving into the highly competitive Australian milk market, with its Australia’s Own brand of UHT milk to appear in Coles and Woolworths from May. ASX-listed Freedom Foods, which reached the $1 billion capitalisation mark last year, has moved to secure space in major -retailers for its own brands following the demise over the past two years of once dominant dairy processor Murray Goulburn. Freedom is a major supplier of UHT and long-life milk products to China and Southeast Asia but has only had a presence in supermarkets and major retailers in Australia through its numerous lines of cereal, health foods and -alternative non-dairy milks — also sold under the Australia’s Own label — such as soy, coconut, rice and almond milks.
Goodman Group (GMG):
Industrial giant Goodman’s residential pipeline of more than 35,000 apartments is gathering pace, with the developer winning approvals in Sydney even as it faces challenges in Melbourne. The group has just received approval for two residential towers in Sydney’s Epping that would include about 260 apartments, retail and commercial space. So far, the group has sold more than $2.5 billion worth of apartment sites with potential for more than 10,000 units. As well as the Epping project, Goodman also owns land at Moorebank near Liverpool, which The Australian can reveal could house up to 9188 apartments if high-density development were permitted, according to a submission to the Greater Sydney Commission.
Mirvac Group (MGR):
The Clean Energy Finance Corporation will lend $90 million to Mirvac for rooftop solar panels and battery storage at three new house and land communities. The new homes in Sydney and Brisbane will be built with high-grade insulation, LED lighting and energy-efficient appliances, while the solar and battery systems will meet up to 90 per cent of average household energy use. The deal follows other CEFC loans to property groups, including $200m to the Queensland -Investment Corporation to overhaul the energy efficiency of its shopping centre portfolio. Residential buildings account for up to half of all emissions produced by Australia’s built environment, the CEFC said.
Murray Goulburn (MGC):
Murray Goulburn’s board has unanimously told its shareholders that a vote to hive off its Devondale brand and seven remaining processing plants in a $1.31 billion total sale to Canadian dairy giant Saputo is in their best interests and should be approved. But is also has revealed that only half of the big ticket price tag will remain to be potentially distributed to members in return for their shares in the co-operative, with $631 million being immediately used to repay increased debt, sale transaction costs and legacy loyalty payments to farmers. Its 130-page explanatory memorandum detailed how a $1.31bn sale tag would allow MG to repay $515m of debt, pay for the $27m sale transactions costs and $89m of unpaid extra 40c-per-kilogram milk solids bonus payments that it pledged to farmers to ensure they did not exit the troubled co-operative as the key sale deal was negotiated. Of the remaining $679m of net asset sale proceeds, farmers and unit trust investors will immediately be paid an initial 80c for each of the 555 MG shares they hold, distributing an immediate $444m.
Wesfarmers Ltd (WES):
Wesfarmers shares are climbing today. Credit Suisse upgraded the conglomerate owner of supermarket chain Coles to outperform from neutral today and also lifted its target price on the firm to $44.89 from $40.65 a share. The broker said that their upgrade to Wesfarmers' rating was a relative value call. It was based on an upgrade to their valuation of Bunnings Australia New Zealand, the likelihood that the underperformance of Bunnings UK and Ireland will be dealt with within the next six months and implied under-valuation of Coles. "With an ex-Bunnings UK FY18E price to earnings multiple of 15 times and clear catalyst for re-rating, the risk-reward appearsfavourable for Wesfarmers," the broker said.
(Source: AIMS)
An adverse outcome from the bank sector inquiry may lead to a smaller buyback from ANZ, according to Morgan Stanley's banking team. They noted that ANZ is on track to complete its $1.5 billion buyback in May and suggested that ANZ could undertake a further $4 billion of buybacks over the next two years. However, the analysts said that any buyback may be smaller than their $4 billion forecast. ANZ should resume growing dividend payments in fiscal 2019 but a special dividend is unlikely as ANZ's Australian franking credits were below $200 million at the end of 2017, well below the peer average of $1.1 billion, the analysts said. ANZ shares were down 1.1 per cent, a slightly worse performance than its big four peers, which were all down by around 1 per cent.
Aurizon Holdings Ltd (AZJ):
Australia’s competition regulator says it has strong concerns about a proposal for Pacific National to buy freight businesses from Aurizon Holdings in Queensland. The Australian Competition and Consumer Commission said it has raised preliminary competition concerns over Pacific National’s planned takeover of Aurizon’s Queensland intermodal freight-haulage business and intermodal rail terminal at Acacia Ridge in Brisbane because the two companies are currently the only providers of intermodal rail line haul services in the state. The ACCC said it worries the takeover could result in increased prices and reduced service for freight hauled between Brisbane and far north Queensland. The regulator said it expects to make a final decision on the deal on May 24.
Centuria Capital Group (CNI):
The listed Centuria Capital Group and West Australian funds manager Primewest are squaring off as they both seek to buy 80 Grenfell Street, a top-class office tower that Blackstone is selling for close to $200 million. For Blackstone, the transaction again demonstrates its flexibility in handling its $6 billion worth of Australia assets. This year it is also selling two office towers in Brisbane, has a half-stake in 275 Kent St on the block in Sydney, is selling a homemaker centre, and is carving off properties from its collection of shopping malls.
Commonwealth Bank of Australia (CBA):
The Commonwealth Bank has done nothing to get rid of commissions paid to mortgage brokers more than a year after chief executive Ian Narev recognised they can lead to customers paying more interest and becoming more likely to fall behind on home loan payments, the financial services royal commission has heard. In a confidential submission to an industry review of remuneration structures, sent in February last year, Mr Narev said that “the use of loan size linked with upfront and trailing commissions for third parties can lead to poor customer outcomes”. In April last year, the review, led by Stephen Sedgwick, recommended ending the link between sales and remuneration of bank staff.
Freedom Foods Group Ltd (FNP):
Low-key health food and long-life dairy processor Freedom Foods is moving into the highly competitive Australian milk market, with its Australia’s Own brand of UHT milk to appear in Coles and Woolworths from May. ASX-listed Freedom Foods, which reached the $1 billion capitalisation mark last year, has moved to secure space in major -retailers for its own brands following the demise over the past two years of once dominant dairy processor Murray Goulburn. Freedom is a major supplier of UHT and long-life milk products to China and Southeast Asia but has only had a presence in supermarkets and major retailers in Australia through its numerous lines of cereal, health foods and -alternative non-dairy milks — also sold under the Australia’s Own label — such as soy, coconut, rice and almond milks.
Goodman Group (GMG):
Industrial giant Goodman’s residential pipeline of more than 35,000 apartments is gathering pace, with the developer winning approvals in Sydney even as it faces challenges in Melbourne. The group has just received approval for two residential towers in Sydney’s Epping that would include about 260 apartments, retail and commercial space. So far, the group has sold more than $2.5 billion worth of apartment sites with potential for more than 10,000 units. As well as the Epping project, Goodman also owns land at Moorebank near Liverpool, which The Australian can reveal could house up to 9188 apartments if high-density development were permitted, according to a submission to the Greater Sydney Commission.
Mirvac Group (MGR):
The Clean Energy Finance Corporation will lend $90 million to Mirvac for rooftop solar panels and battery storage at three new house and land communities. The new homes in Sydney and Brisbane will be built with high-grade insulation, LED lighting and energy-efficient appliances, while the solar and battery systems will meet up to 90 per cent of average household energy use. The deal follows other CEFC loans to property groups, including $200m to the Queensland -Investment Corporation to overhaul the energy efficiency of its shopping centre portfolio. Residential buildings account for up to half of all emissions produced by Australia’s built environment, the CEFC said.
Murray Goulburn (MGC):
Murray Goulburn’s board has unanimously told its shareholders that a vote to hive off its Devondale brand and seven remaining processing plants in a $1.31 billion total sale to Canadian dairy giant Saputo is in their best interests and should be approved. But is also has revealed that only half of the big ticket price tag will remain to be potentially distributed to members in return for their shares in the co-operative, with $631 million being immediately used to repay increased debt, sale transaction costs and legacy loyalty payments to farmers. Its 130-page explanatory memorandum detailed how a $1.31bn sale tag would allow MG to repay $515m of debt, pay for the $27m sale transactions costs and $89m of unpaid extra 40c-per-kilogram milk solids bonus payments that it pledged to farmers to ensure they did not exit the troubled co-operative as the key sale deal was negotiated. Of the remaining $679m of net asset sale proceeds, farmers and unit trust investors will immediately be paid an initial 80c for each of the 555 MG shares they hold, distributing an immediate $444m.
Wesfarmers Ltd (WES):
Wesfarmers shares are climbing today. Credit Suisse upgraded the conglomerate owner of supermarket chain Coles to outperform from neutral today and also lifted its target price on the firm to $44.89 from $40.65 a share. The broker said that their upgrade to Wesfarmers' rating was a relative value call. It was based on an upgrade to their valuation of Bunnings Australia New Zealand, the likelihood that the underperformance of Bunnings UK and Ireland will be dealt with within the next six months and implied under-valuation of Coles. "With an ex-Bunnings UK FY18E price to earnings multiple of 15 times and clear catalyst for re-rating, the risk-reward appearsfavourable for Wesfarmers," the broker said.
(Source: AIMS)
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