Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
An interesting take on the Australian banking sector from InvestSMART. Over the last 20 years the ASX All Ords has returned an average of 4.4 per cent a year. The major banks have beaten that hands down, delivering an average return of 7.5 per cent pa. Things were wobbly during the GFC but the comeback, … Continue reading “Our Banking Sector is Anything but an Island”
From The Conversation. Immediately after the UK voted to leave the European Union, a number of lead economic indicators went into reverse. Notable among them were housing, property and real estate shares that fell sharply both in the housebuilding sector and among banks with large property lending exposure. This was seen as a simple response … Continue reading “Property fears after Brexit vote are a sign of wider UK housing problems”
From The Conversation. Australia’s AAA credit rating was under pressure even before the election and is now looking decidedly shaky. Ratings agency Standard & Poors has moved Australia’s rating outlook from “stable” to “negative”, due to debt and a poor chance of budget repair. This follows warnings from the other major credit rating agencies – … Continue reading “Australia could be about to lose its AAA rating, and here’s why”
ASIC has warned of a dramatic increase in the extent of unlicensed conduct by retail OTC derivative providers seeking to expand their market with new customers for their complex and risky products such as binary options. The recent Report 482 Compliance review of the retail OTC derivatives sector (REP 482) highlighted an increase in activity … Continue reading “ASIC crackdown on unlicensed retail OTC derivative providers”
From Bloomberg View. If Australia is an economic miracle — the so-called Lucky Country, beneficiary of more than a quarter century of uninterrupted growth — then its banks are its most visible sign of strength. After a near-death experience in the 1990s, they’ve reformed and bounced back dramatically: Returns on equity now average around 15 … Continue reading “In Australia, All That Glitters Isn’t Gold”
From The Conversation. A long-term plan to cut the company tax rate from 30% to 25% is the centrepiece of the Coalition’s economic plan for jobs and growth. The Coalition maintains the change will boost GDP by more than 1% in the long-term, at a budgetary cost of $48.2 billion over the next 10 years. … Continue reading “The full story on company tax cuts and your hip pocket”
According to CoreLogic RP Data, the recent boom in unit construction has seen record-high levels of unit approvals and construction culminating in a substantial volume of new unit stock, much of which will settle over the next 24 months. CoreLogic’s new settlement risk report looks at the number of units due to settle over the … Continue reading “Record high unit construction increases settlement risk”
From Australian Broker. More Australian lenders have taken a hard-line approach to foreign lending, stopping lending to foreign borrowers or excluding foreign-sourced income from mortgage applications amid growing concerns about fraud. Citigroup wrote to mortgage brokers yesterday with a blacklist of foreign currencies it will no longer accept as payment for Australian real estate from … Continue reading “More Australian Banks Throttle Back Foreign Lending”
In the RBA Bulletin, released today, there is a section which shows major bank margins have improved. Essentially, the story is one of falling deposit rates, plus change in mix, and rises in home lending rates independent of the cash rate in recent months. Consumers are bearing the burden whilst big business lending rates and … Continue reading “Bank Spreads Have Improved, Thanks To More Expensive Home Loans”
From The Conversation. Volatility in financial markets globally and competition from smaller “challengers” like Youi (an Australian registered company owned by South Africa’s Rand Merchant Investment Holdings) have been driving down big insurance companies’ profits, putting pressure on these companies to find ways of cutting costs. Figures released by the Australian Prudential Regulation Authority (APRA) … Continue reading “Insurance outlook: in an era of increasing competition technology will make the difference”