AMP Limited (AMP):
AMP has dropped 2.86 per cent to $3.565 in early trade after Shaw and Partners analysts noted “the worst is yet to come” for the bank. It cited the end of grandfathered commissions, following Westpac and Macquarie, as a potential cut of $250 million in pre-tax profit for the bank as well as knock ons from the royal commission. “It’s likely that the adverse publicity that AMP has attracted as a result of the Royal Commissions into financial services will adversely affect its ability to attract new financial planners, to retain existing ones and to attract cash inflows,” senior analyst Brett Le Mesurier wrote. Charges of $400 million have been included for 2018 an 2019 relating to potential ASIC fines, restructuring and settlement of class actions but the analyst argued revenues would take a further hit with the decline in Australian Wealth Management sector more broadly.
Australia and New Zealand Banking Group (ANZ):
ANZ to come under focus following the arrest of former Malaysian prime minister Najib Razak who was last night arrested by the country’s powerful anti--corruption agency over his alleged role in the $US4.5 billion looting of sovereign wealth fund 1MDB. The Australian’s Ben Butler reports the arrest of Mr Najib is likely to raise fresh questions over the supervision of Ambank by ANZ, which owns a 24 per cent stake in the bank and has the ability to appoint key managers to Ambank. ANZ’s current chief executive Shayne Elliott sat on the Malaysian bank’s board until the beginning of 2016. CLSA banking analyst Brian Johnson also notes the ANZ’s AmBank in the frame and could come under pressure given former Malaysian PM has reportedly deposited more than $600 million into his personal bank account with AMBank. CLSA argues “this could yet have some implications for ANZ and some ANZ executives”. “Could ANZ and/or some of its executives be drawn into a seemingly re-erupting 1MDB debacle? Possibly,” CLSA’s Johnson says. ANZ last traded at $28.09, up 0.04 per cent.
Commonwealth Bank of Australia (CBA):
CBA, the nation's largest residential property lender, is set to launch a major overhaul of its mortgages that includes withdrawing from high-risk low documentation products. The latest shake-up at Commonwealth Bank follows the decision to transform its reward system for mortgage brokers and hive-off broker operations into a separate business. "This is to ensure we are maintaining our prudent lending standards and meeting our customers' financial needs," a bank spokesman said. Products to be removed will include the one-year guaranteed rate, seven-year fixed rate, 12 month discounted variable rate, rate saver, three-year special rate saver and no fee loans. The bank is also removing low documentation products for all home owner, investment loan and line of credit applications. A low doc – or low documentation loan – is designed for self-employed and small business owners who may not have access to the financial statements and tax returns usually required when applying for a home loan. Lines of credit allow borrowers to draw cash on the equity in their property at a pre-arranged rate and term.
Gentrack Group Ltd (GTK):
Gentrack Group has is set to raise NZ$90 million through UBS and Deutsche Craig’s to pay down debt and fund future acquisitions. The fully underwritten 1 for 5.76 accelerated pro-rata entitlement offer is at $NZ6.19 per share and a 11.6 per cent discount to the last closing price of NZ$7. “The acquisition of Evolve was completed on 29 June 2018 and has increased Gentrack’s debt to approximately NZ$90m. Proceeds raised through the Offer will be used to pay down Gentrack’s existing bank debt, providing funding capacity to support future acquisition and growth opportunities,” it said. Gentrack Group develops specialist software for energy utilities, water companies and airports around the world.
Macquarie Group Ltd (MQG):
Macquarie’s international march shows no sign of slowing, with the investment bank keen to increase its exposure to the growing US data centre sector. Macquarie is close to finalising an investment of about $US800 million ($1.09 billion) to buy an 80 per cent stake in T5 Data Centres in the US. The deal will need to be approved by the Committee on Foreign Investment in the US and observers say that until that is signed off the transaction is not a done deal. The stake is being offloaded by Iron Point Partners. It is one of a number of transactions Macquarie has under way in the US. Macquarie is also reported to be looking at Stonehenge Management, an apartment landlord, and RHP Properties. An investment in T5 would be Macquarie’s second in a US data centre in just three months.
Metcash Limited (MTS):
The chairman of struggling grocery wholesaler Metcash says a $125 million off-market buyback will benefit all of the company's shareholders whether they choose to be part of it or not, as one fund manager warned that the supermarkets business is facing serious strife over the next five years. Metcash chairman Rob Murray has sent a letter to shareholders which accompanies the details of the $125 million offmarket buyback, with a draft class ruling from the Australian Tax Office outlining that for tax purposes, the buyback price will comprise a capital component of 61¢. The $125 million buyback will reduce Metcash's issue capital by about 5.3 per cent. Shareholders wanting to participate in the buyback can offer to sell some shares to Metcash under a tender process at specified discounts at between 8 per cent and 14 per cent to the market price. Watermark Funds Management head of consumer research Ian Carmichael said the hardware and liquor divisions of Metcash were solid performers, but the core grocery wholesaling business faced a tough future because underlying earnings from that business have been going backwards for the past two years and there were even more problems ahead.
Platinum Asset Management Limited (PTM):
Brokerage Credit Suisse has downgraded international fund manager Platinum earnings for weaker markets and flows. It cut its recommendation to Underperform from Neutral. “Despite inflows continuing at a modest level, fund performance has deteriorated in May and June with negative investment performance during both months,” Credit Suisse said. Factoring this into its forecasts alongside lower second half of financial 2018 performance fee forecasts Credit Suisse has downgraded its forecasts by 3 per cent in financial 2018 and 5 per cent in financial 2019. Credit Suisse also lowered its target price to $5.25 (from A$5.50). PTM last traded at $5.45, down 7.16 per cent, bouncing back after the stock fell 9.8 per cent to $5.29.
Sirtex Medical Limited (SRX):
The foreign investment regulator has approved the sale of Sirtex Medical to CDH Investments and China Grand Pharmaceutical and Healthcare Holdings, Sirtex said Tuesday. Sirtex (SRX), a medical device company, last month agreed to be purchased by CDH and CGP for $33.60 a share. The deal approval from FIRB was among the conditions to closing the sale. A different company, Varian Medical Systems, agreed to buy Sirtex in January for about $1.59 billion, or $28 a share, but Sirtex later terminated the agreement. Sirtex had to pay a $16 million breakup fee from the original deal with Varian. The Committee on Foreign Investment in the US, an interagency panel that reviews proposed foreign takeovers of businesses that operate in the country, also has to approve the deal. In June CGP said it, CDH and Sirtex would take reasonable steps to mitigate any national security concerns in connection with the transaction.
(Source: AIMS)
AMP has dropped 2.86 per cent to $3.565 in early trade after Shaw and Partners analysts noted “the worst is yet to come” for the bank. It cited the end of grandfathered commissions, following Westpac and Macquarie, as a potential cut of $250 million in pre-tax profit for the bank as well as knock ons from the royal commission. “It’s likely that the adverse publicity that AMP has attracted as a result of the Royal Commissions into financial services will adversely affect its ability to attract new financial planners, to retain existing ones and to attract cash inflows,” senior analyst Brett Le Mesurier wrote. Charges of $400 million have been included for 2018 an 2019 relating to potential ASIC fines, restructuring and settlement of class actions but the analyst argued revenues would take a further hit with the decline in Australian Wealth Management sector more broadly.
Australia and New Zealand Banking Group (ANZ):
ANZ to come under focus following the arrest of former Malaysian prime minister Najib Razak who was last night arrested by the country’s powerful anti--corruption agency over his alleged role in the $US4.5 billion looting of sovereign wealth fund 1MDB. The Australian’s Ben Butler reports the arrest of Mr Najib is likely to raise fresh questions over the supervision of Ambank by ANZ, which owns a 24 per cent stake in the bank and has the ability to appoint key managers to Ambank. ANZ’s current chief executive Shayne Elliott sat on the Malaysian bank’s board until the beginning of 2016. CLSA banking analyst Brian Johnson also notes the ANZ’s AmBank in the frame and could come under pressure given former Malaysian PM has reportedly deposited more than $600 million into his personal bank account with AMBank. CLSA argues “this could yet have some implications for ANZ and some ANZ executives”. “Could ANZ and/or some of its executives be drawn into a seemingly re-erupting 1MDB debacle? Possibly,” CLSA’s Johnson says. ANZ last traded at $28.09, up 0.04 per cent.
Commonwealth Bank of Australia (CBA):
CBA, the nation's largest residential property lender, is set to launch a major overhaul of its mortgages that includes withdrawing from high-risk low documentation products. The latest shake-up at Commonwealth Bank follows the decision to transform its reward system for mortgage brokers and hive-off broker operations into a separate business. "This is to ensure we are maintaining our prudent lending standards and meeting our customers' financial needs," a bank spokesman said. Products to be removed will include the one-year guaranteed rate, seven-year fixed rate, 12 month discounted variable rate, rate saver, three-year special rate saver and no fee loans. The bank is also removing low documentation products for all home owner, investment loan and line of credit applications. A low doc – or low documentation loan – is designed for self-employed and small business owners who may not have access to the financial statements and tax returns usually required when applying for a home loan. Lines of credit allow borrowers to draw cash on the equity in their property at a pre-arranged rate and term.
Gentrack Group Ltd (GTK):
Gentrack Group has is set to raise NZ$90 million through UBS and Deutsche Craig’s to pay down debt and fund future acquisitions. The fully underwritten 1 for 5.76 accelerated pro-rata entitlement offer is at $NZ6.19 per share and a 11.6 per cent discount to the last closing price of NZ$7. “The acquisition of Evolve was completed on 29 June 2018 and has increased Gentrack’s debt to approximately NZ$90m. Proceeds raised through the Offer will be used to pay down Gentrack’s existing bank debt, providing funding capacity to support future acquisition and growth opportunities,” it said. Gentrack Group develops specialist software for energy utilities, water companies and airports around the world.
Macquarie Group Ltd (MQG):
Macquarie’s international march shows no sign of slowing, with the investment bank keen to increase its exposure to the growing US data centre sector. Macquarie is close to finalising an investment of about $US800 million ($1.09 billion) to buy an 80 per cent stake in T5 Data Centres in the US. The deal will need to be approved by the Committee on Foreign Investment in the US and observers say that until that is signed off the transaction is not a done deal. The stake is being offloaded by Iron Point Partners. It is one of a number of transactions Macquarie has under way in the US. Macquarie is also reported to be looking at Stonehenge Management, an apartment landlord, and RHP Properties. An investment in T5 would be Macquarie’s second in a US data centre in just three months.
Metcash Limited (MTS):
The chairman of struggling grocery wholesaler Metcash says a $125 million off-market buyback will benefit all of the company's shareholders whether they choose to be part of it or not, as one fund manager warned that the supermarkets business is facing serious strife over the next five years. Metcash chairman Rob Murray has sent a letter to shareholders which accompanies the details of the $125 million offmarket buyback, with a draft class ruling from the Australian Tax Office outlining that for tax purposes, the buyback price will comprise a capital component of 61¢. The $125 million buyback will reduce Metcash's issue capital by about 5.3 per cent. Shareholders wanting to participate in the buyback can offer to sell some shares to Metcash under a tender process at specified discounts at between 8 per cent and 14 per cent to the market price. Watermark Funds Management head of consumer research Ian Carmichael said the hardware and liquor divisions of Metcash were solid performers, but the core grocery wholesaling business faced a tough future because underlying earnings from that business have been going backwards for the past two years and there were even more problems ahead.
Platinum Asset Management Limited (PTM):
Brokerage Credit Suisse has downgraded international fund manager Platinum earnings for weaker markets and flows. It cut its recommendation to Underperform from Neutral. “Despite inflows continuing at a modest level, fund performance has deteriorated in May and June with negative investment performance during both months,” Credit Suisse said. Factoring this into its forecasts alongside lower second half of financial 2018 performance fee forecasts Credit Suisse has downgraded its forecasts by 3 per cent in financial 2018 and 5 per cent in financial 2019. Credit Suisse also lowered its target price to $5.25 (from A$5.50). PTM last traded at $5.45, down 7.16 per cent, bouncing back after the stock fell 9.8 per cent to $5.29.
Sirtex Medical Limited (SRX):
The foreign investment regulator has approved the sale of Sirtex Medical to CDH Investments and China Grand Pharmaceutical and Healthcare Holdings, Sirtex said Tuesday. Sirtex (SRX), a medical device company, last month agreed to be purchased by CDH and CGP for $33.60 a share. The deal approval from FIRB was among the conditions to closing the sale. A different company, Varian Medical Systems, agreed to buy Sirtex in January for about $1.59 billion, or $28 a share, but Sirtex later terminated the agreement. Sirtex had to pay a $16 million breakup fee from the original deal with Varian. The Committee on Foreign Investment in the US, an interagency panel that reviews proposed foreign takeovers of businesses that operate in the country, also has to approve the deal. In June CGP said it, CDH and Sirtex would take reasonable steps to mitigate any national security concerns in connection with the transaction.
(Source: AIMS)
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