CBA Share Price History
09 Mar, 2021
In this article, we will take a look at the 15 Most Valuable Australian Companies. You can skip our detailed analysis of Australia’s economy and go to the 5 Most Valuable Australian Companies. Australia proved to be one of the most resilient economies in the wake of the coronavirus crisis. The Australian Bureau of Statistics (ABS) announced […]
01 Mar, 2021
This article will reflect on the compensation paid to Matt Comyn who has served as CEO of Commonwealth Bank of...
15 Jan, 2021
If you haven’t known it by now, let me just state the obvious: the cryptocurrency market has gone mainstream. Obviously, the biggest news item is bitcoin. After blowing past the psychological resistance barrier of $20,000, it then went on to breach $30,000, then $40,000. In theory, this should help bank stocks as their underlying companies can potentially corral this excitement into another revenue channel. Unfortunately, that’s not how things work around here. For one thing, bank stocks — at least, the major ones — are typically steeped in history and tradition. For instance, the heritage of many companies can be traced well back into the 19th century. And that’s just for American banks. You can probably figure out that the cryptocurrency concept is anything but traditional. It’s really a revolution of the financial and investment paradigm. Of course, this segues into the next reason why banks stocks and virtual currencies don’t always mix. A cryptocurrency is not just an alternative to the hegemonic global financial structure but a competitor. Let’s be real — most people who deal with cryptos are doing so to make money. Well, many banking institutions have their own investment businesses, which aren’t nearly as sexy as the blockchain markets.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Furthermore, bank stocks represent in many ways the frontline of monetary policy. Right now, the emphasis of both monetary and fiscal policymakers is to stimulate the economy. If you look at metrics like the personal saving rate and especially money velocity, stimulus is the last thing we have. Instead, we’re bucking under the weight of deflation. People speculating their money on whatever cryptocurrency is popular these days hardly helps matters. 9 Stocks That Investors Think Are the Next Amazon That’s a major problem because value is now being transferred digitally — and without a leaching intermediary. Well, there are intermediaries, but they’re often not the big banks. Therefore, bank stocks are not necessarily aligned with the rise of the cryptocurrency. Here are a few examples of companies that either ban or limit bitcoin or other blockchain token purchases. Bank of America (NYSE:BAC) JPMorgan Chase (NYSE:JPM) Citigroup (NYSE:C) Lloyds Banking (NYSE:LYG) Commonwealth Bank of Australia (OTCMKTS:CMWAY) Royal Bank of Canada (NYSE:RY) PNC (NYSE:PNC) Wells Fargo (NYSE:WFC) Discover Financial Services (NYSE:DFS) To be clear, not all banks are anti-bitcoin. And we should be fair to those who criticize the cryptocurrency complex: it’s a wild west market. Plus, you have high-profile cases such as the Securities and Exchange Commission’s lawsuit against Ripple Labs, the folks responsible for ripple. I get the hesitation, which is why these bank stocks are not quite crypto-friendly yet. Bank of America (BAC) Source: Tero Vesalainen/Shutterstock Historically, Bank of America will go down as an early supporter of the cryptocurrency concept. Now that I think about it, supporter might be too strong of a word. But it certainly lent the idea of blockchain reward tokens substantial credibility. According to Forbes, BofA was the “first major finical institution to initiate analyst coverage” of bitcoin. But before you go into your local Bank of America branch to inquire about bitcoin investing, you’ve got another thing coming, bud! According to Banks.com, BofA has a policy that “Bank-issued credit cards and lines of credit can no longer be used to buy bitcoin or any other altcoin.” However, “Depositors can still use their debit cards or bank transfers for purchases.” Bank stocks must bank, I guess. Naturally, this is a bummer. But it could also be that financial institutions are protecting themselves. The last thing they need is everyone using credit to pile into a speculative cryptocurrency asset. But on the other side, this move reeks of self-interest. JPMorgan Chase (JPM) Source: Bjorn Bakstad / Shutterstock.com When JPMorgan Chase CEO Jamie Dimon isn’t busy manipulating precious metals — sorry, that’s an old joke but some take it very seriously — he’s giving perplexing comments about bitcoin and the broader cryptocurrency market. To clarify, JPMorgan issued a bold statement. From a CNBC report, JPM claims the “red-hot cryptocurrency could rally as high as $146,000 as it competes with gold as an ‘alternative’ currency. But, there’s a catch.” Such a tremendous rally would imply that bitcoin’s market capitalization would reach somewhere in the neighborhood of $2.7 trillion. However, “its price volatility would need to drop substantially to give institutional investors the confidence required to make large bets.” 7 Long-Term Stocks To Buy You’ll Want To Hang Onto Perhaps that’s a way to make amends for the fact that Dimon once called BTC a fraud. Still, according to Banks.com, JPMorgan has the same policy regarding bank-issued credit cards and lines of credit for cryptocurrency purchases. So unfortunately, JPM is still one of the bank stocks that’s not in alignment with the virtual currency revolution. Citigroup (C) Source: TungCheung / Shutterstock.com Years ago, the idea of $100,000 bitcoin was incredibly far-fetched. To be fair, it still is a fantastical idea. Nevertheless, in late November 2017, I stated that “I genuinely would not be surprised if the virtual currency hit $100,000 a pop. The only grey area is the timing.” Could that wildly outrageous target come true in 2021? That’s 2.5 times from where the BTC price stands today. On Nov. 28, the time of my above quote, it would have been roughly a ten-bagger. Therefore, we’ve made significant progress, so much so that this ridiculous notion is just on the cusp of fruition. But if you think $100,000 is crazy, Citibank is looking at $318,000. Specifically, Thomas Fitzpatrick, global head of the company’s CitiFXTechnicals market insight product, believes this jaw-dropping threshold can be reached by December of this year! At a certain point, you got to wonder if these lofty targets are becoming a tad bit irresponsible. But don’t worry, Citigroup has the same policy as the previous two big banks: no bitcoin for you! Lloyds Banking (LYG) Source: Shutterstock It’s not just U.S.-based bank stocks that are impacted by skeptical or downright negative attitudes toward cryptocurrency investing. Nearly three years ago, The Guardian reported that Lloyds Banking “banned credit card customers from buying bitcoin amid fears it could be left in debt as the cryptocurrency’s value deflates.” Further, the paper stated that “The banking giant, which includes Halifax, MBNA and Bank of Scotland, is thought to be the first in the UK to ban credit card customers from borrowing to buy the cyptocurrency, which has more than halved in value in recent months.” Of course, the timing of this is interesting. That was when BTC was on the cusp of hitting $20,000, only to incur an implosion of the crypto bubble. But it does raise the question: was Lloyds willing to allow its customers to speculate on virtual currencies had they continued to go up, up and away? 7 Great Index Funds To Buy With Super Low Fees We probably won’t get an answer to that. From the information provided by Banks.com, LYG remains one of the bank stocks that is not crypto-friendly. Commonwealth Bank of Australia (CMWAY) Source: Shutterstock Australians are an adventurous bunch. I mean, you really have to be if you’re going to live in this “frontier” country. But when it comes to finances, the Land Down Under stays on the straight and narrow. At least, that’s the implication behind the Commonwealth Bank of Australia’s policy on cryptocurrency investing. As I said, non-crypto-friendly bank stocks are not exclusively an American phenomenon and the Commonwealth Bank demonstrates this perfectly. Its policy prohibits virtual currency purchases via credit card. It should be noted, though, that the company allows its customers to purchase blockchain reward tokens through its transaction accounts and debit cards. I get that the majors want to protect themselves against a mad rush of speculation that could go awry. However, it’s also possible — and I’m just spit-balling here — that these restrictions could ironically end up contributing to the speculation. Perhaps the wild swings in the bitcoin price artificially concocted pent-up demand. Whatever the case, CMWAY is one of the bank stocks that want to stay in the analog paradigm for as long as possible. Royal Bank of Canada (RY) Source: Shutterstock From recent news, it appears that Royal Bank of Canada could be one the bank stocks that truly gets it. Back in 2017, JPMorgan Chase stated that it would launch a new payment processing network utilizing blockchain technology. One of JPM’s partners in the project was Royal Bank of Canada. Later, in 2019, there were rumors that it was going to launch a cryptocurrency exchange. However, a report from Coindesk.com squashed that speculation. A spokesperson clarified, stating, “While RBC does not comment on ongoing proprietary research and development, we can confirm that these patent filings are not in support of work towards a cryptocurrency exchange for clients.” But what about now? From information provided by Banks.com, there apparently have been customers who have accused RBC of stopping bitcoin purchasing transactions. And a Reddit post claims that RBC has stopped allowing crypto-related purchases. 10 Smart Stocks to Buy With $5,000 From what I can tell, the official policy is that the company is “reviewing” the matter. However, its history and anecdotal evidence suggest that RBC is one of the “anti-crypto” bank stocks. PNC (PNC) Source: Jonathan Weiss/Shutterstock.com According to Banks.com, PNC’s policy is to not associate with bitcoin and virtual currency ventures. That means discouraging or preventing its clients from engaging in crypto-related investments or businesses. While such a cautious take on an emerging asset class may seem draconian, I can also appreciate the hesitation. Above, I mentioned the SEC lawsuit against Ripple Labs. To briefly summarize, the regulatory agency’s position is that Ripple was trying to subvert securities law by issuing XRP tokens to fund its business. Basically, this was an initial public offering without calling it such. I don’t want to get into the legalities of it because it’s a complex issue, although if you want more detail, you can read my take on the matter. But the point as it relates to bank stocks is that these major institutions don’t want to absorb the risk because crypto-related controversies often have blowback that affects third parties negatively. Judging from the rumor mill, it appears that PNC maintains its pessimistic posture against virtual currencies. Therefore, you’ll probably not find a friend here. Wells Fargo (WFC) Source: Martina Badini / Shutterstock.com When it comes to notorious bank stocks, Wells Fargo probably tops the list for most folks. It’s a darn shame because this institution used to be one of the most respected. But after the infamous account fraud scandal, Wells Fargo had its sterling reputation tarnished. As well, WFC stock has generally been a laggard relative to the competition. However, the company shares the same skepticism toward bitcoin and other cryptocurrency assets like its brethren. In 2019, Wells Fargo placed a ban on customers purchasing blockchain reward tokens via debit cards. Like the other bank stocks I discussed, I understand the reasoning. Cryptocurrencies are incredibly speculative. Yes, massive gains can be had, sometimes within hours of purchasing your coins. But severe, catastrophic losses can also occur — and that’s just talking about market volatility. 9 Hot Stocks to Buy Now to Profit off Chinese Markets Nevertheless, it just rubs folks the wrong way that WFC won’t allow its adult customers to make adult choices with their money, but Wells is fine concocting fake customer accounts to boost sales results. Frankly, it’s not a good look. Discover Financial Services (DFS) Source: Jonathan Weiss / Shutterstock.com I absolutely don’t recommend this course of action. But right now, we’re in a cheap money environment. Thus, for those that wish to speculate at scale, there is case to be made for buying cryptocurrencies on credit. Again, please hear me out — I do not recommend this. Anyways, for those thinking about such a reckless move, you’re not going to find a willing partner from Discover Financial Services. Financial institutions are all about risk management. Plus, bank stocks have shareholders, obviously. They might frown upon virtual currency endeavors. But former Discover CEO David Nelms went a step further, telling Bloomberg in 2018: “It’s crooks that are trying to get money out of China or wherever … Or if someone steals our credit card numbers they’re going to ask for payments in Bitcoin. Those are the only use cases I’m actually seeing today.” Ouch! Admittedly, there’s more than an element of truth to Nelms’ statement. The negative side of cryptocurrencies have a truly dark edge that “analog” investors aren’t used to. And despite a change in leadership, I can’t find any indication that Discover has loosened up on its anti-crypto policies. On the date of publication, Josh Enomoto held a long position in BTC, XRP and LYG stock. A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post 9 Bank Stocks That Show No Love for the Cryptocurrency Rally appeared first on InvestorPlace.
09 Dec, 2020
(Bloomberg Opinion) -- The metal bulls are charging. Goldman Sachs Group Inc., which sees a commodities rally ahead on a par with the 2000, says copper could test its record high of just over $10,000 by 2022. The metal has already surged to almost $8,000 this year. Nickel is also on a tear, zinc has climbed more than 50% since March, and iron ore is closing in on $150 a ton.The post-Covid future does look rosy. Only, we’re not there yet.Exuberance is only natural, to some extent. The vast majority of us will be glad to see the end of a year spent in varying stages of lockdown. We are all focusing ahead. In commodities terms, that translates into looking through the next few months of winter Covid-19 surges, extra closures, vaccine distribution delays and other hiccups, into a world where life returns to normal.The optimism is also grounded in reality. There is no question that things are looking up for commodities, and particularly base metals. There is significant government spending globally, the U.S. dollar is weak and monetary policy is loose. Industrial and consumer demand will recover. Supply, meanwhile, will probably struggle to keep up with something close to a V-shaped recovery, after a long period of frugality following the splurge of 2012 and 2013.Copper is a good example of what’s at stake. The red metal has had its sharpest rally in a decade, rising more than two-thirds from its March lows. That’s largely thanks to China, where strong demand, infrastructure spending and government stockpiling have offset weakness elsewhere — even if imports have moderated of late. The State Reserve Bureau has added as much as 500,000 tons of copper inventories in 2020, according to analysts at Jefferies Group LLC.Appetite is expected to increase globally as other economies bounce back, and copper-heavy green stimulus plans kick in, at a time of low inventories. Demand may exceed output. Glencore Plc, a major producer, last week put the copper project pipeline at pre-supercycle lows. Goldman sees the tightest conditions in a decade, and others too, to a greater or lesser extent, project deficits ahead.Yet there’s a risk that the commodities market is paying more attention to the light at the end of the tunnel than to the darkness before we get there, as Vivek Dhar of Commonwealth Bank of Australia puts it. The road is still long and bumpy, even for copper.For a start, green shoots of recovery seen in the summer and autumn are wilting as winter sets in and Covid case numbers rise. U.S. Federal Reserve Chair Jerome Powell has been among those warning of challenges and uncertainties in the near term as outbreaks widen in the U.S. and beyond. In Europe, a second wave of infections and lockdowns is hurting — even if restrictions are less stringent than the first time around.While vaccine approvals are undeniably good news, inoculation on a scale that will dent hospitalizations and deaths is some way off. Vaccines won’t lead to automatic lifting of all travel and other restrictions. That will take months, or more. Then there’s China, which has single-handedly held up global commodities demand this year, but where appetite may be cooling. That doesn’t mean a drop. Still, uncertainty surrounds exactly what the end of stimulus-fueled growth will look like, and indeed the exact shape of consumption in an economy attempting to hit President Xi Jinping’s net-zero emissions target. There are also questions over the extent of debt risks and what that may mean for the world’s largest consumer of commodities, as non-payments rise. Five state-linked companies — from a chipmaker to an auto company with ties to BMW AG — have defaulted in the onshore bond market this year. That’s the most since 2016. Market bulls are no doubt right about where we end up in a year or so. Goldman may well be correct in asserting that green spending can rival the investment splurge of 20 years ago, and a consumer boom is possible. We just need to see it happen. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
26 Nov, 2020
Commonwealth Bank of Australia Sponsored ADR (CMWAY) Upgraded to Strong Buy: Here's What You Should Know
Commonwealth Bank of Australia Sponsored ADR (CMWAY) has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
30 Oct, 2020
(Bloomberg Opinion) -- If you could have bought the future earnings of the members of Destiny’s Child in 2001, would you really have turned it down because you weren’t sure where Kelly Rowland’s career was headed?That’s a good analogy for Ares Management Corp.’s interest in AMP Ltd., the Australian asset manager that’s lost more than two-thirds of its value over the past three years amid an official investigation into misconduct in the financial sector, combined with boardroom turmoil and a sexual harassment scandal. While the focus has been on the problems of AMP’s retail divisions, it still has a Beyonce on its books that a bold investor can pick up on the cheap.Years of bad publicity have been devastating to AMP’s retail-focused wealth management business. Revenues that were running at more than 1.1% of assets under management five years ago will be in the region of 0.7% this year. Even that’s not enough to stem the flood of withdrawals from customers. Net cash outflows since the start of 2018 have amounted to about A$14.67 billion ($10.34 billion), equivalent to nearly half a billion dollars a month.Things look very different, though, when you consider AMP Capital. This division is a global infrastructure and real estate business that could be likened to Macquarie Group Ltd., with investments in airports, rolling stock, parking garages and office blocks across multiple continents.Macquarie is currently valued at about 7.6% of its A$607 billion in assets under management, at the higher end of the typical 3% to 8% range for the sector. Ares, for its part, runs at about 6.1% of its $179 billion AUM. Even after surging 22% Friday on news of the takeover interest from Ares, the whole of AMP is worth only A$5.36 billion. That's roughly 3.4% of AMP Capital’s A$190 billion in AUM, and 2.1% compared with the A$253 billion at the group as a whole.Suppose the retail-focused wealth management business and bank turn out to be duds. Ares is still picking up a global infrastructure investor on the cheap, at a time when the prospects for such businesses look rosy. Record-low interest rates and pandemic-hit global economies are likely to start channeling yet more money into physical assets over the coming years.The problems with AMP’s core business have even been modestly beneficial to AMP Capital. The fees it charges to the company’s wealth management arm, at 18.1 basis points in the first half of this year, are not much more than a third of the 45.7 basis points levied on external investors. As AMP’s wealth management customers withdraw their cash and external investors show ongoing demand, that’s weighting the business more and more toward its most profitable clients. Fee income last year was up 56% over its levels five years earlier.To be sure, any buyer is going to have to decide what to do with those retail businesses. It’s anyone’s guess when the tarnished image of AMP’s wealth management arm will recover. Meanwhile, its bank has a A$20.21 billion mortgage book that’s likely to suffer from a shaky pandemic-hit property market and net interest margins that are being squeezed by competition. Still, it’s not impossible that a new American owner could help on that front. AMP was traditionally one of Australia’s most widely held stocks. Only Commonwealth Bank of Australia has more individual shareholders than AMP’s 723,387. That means that the twists and turns of its half-yearly reporting cycle are a constant reminder of its troubled past to local investors who should be its core customer base. If you wanted to rebuild AMP’s image, there would be worse ways of doing it than burying its performance in humdrum aggregate numbers reported out of Los Angeles.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
29 Oct, 2020
Flexi ABS Trust 2020-1 -- Moody's assigns definitive ratings to Australian consumer ABS issued by flexigroup
Moody's Investors Service has assigned definitive ratings to the notes issued by Perpetual Corporate Trust Limited in its capacity as the trustee of the Flexi ABS Trust 2020-1. Moody's current expectations of loss could be worse than its original expectations because of more defaults by underlying obligors.
20 Oct, 2020
(Bloomberg Opinion) -- Why did it take media reporting to get Australia’s money laundering investigators to start looking into casino operator Crown Resorts Ltd.?Shares in the gambling company previously controlled by billionaire James Packer slumped 8.2% Monday after it said the country’s financial-crimes regulator Austrac had started a probe into the handling of “high risk and politically exposed” individuals at its Melbourne casino. The investigation started two months after Nine Entertainment Co. newspapers published a series of articles about the activities of high-rolling Chinese gamblers at Crown’s properties.It’s the latest in a string of prominent cases led by Austrac, after a A$45 million ($32 million) award against racetrack betting operator Tabcorp Holdings Ltd. in 2017, a A$700 million penalty against Commonwealth Bank of Australia in 2018, and a A$1.3 billion settlement with Westpac Banking Corp. last month.That’s quite a turnaround. For much of its 31-year history, Austrac has been a pretty somnolent organization, tending its ballooning database of suspicious transactions reported by compliance officers without carrying out much of the aggressive enforcement that you might expect. Just look back at the cases that Austrac has brought over the years. Until recently, the majority of actions involved nickel-and-dime businesses like a pub in southern Brisbane or a cafe in western Sydney.That’s clearly not going to do the job. Money laundering, by its nature, requires moving large volumes of either physical or digital cash. That means regulators need to be laser-focused on the activities of the companies that trade the largest volumes of those assets — casinos, in the case of notes and coins, and financial businesses, in the case of electronic transactions.“Until recently they were showing all the symptoms of a regulator who’d been captured by the industry they were supposed to regulate,” John Chevis, an independent anti-money laundering consultant, said by phone. The string of recent cases shows that things have at last started to change. Paul Jevtovic, a former police officer who took over at Austrac in 2014 before joining HSBC Plc’s compliance department in 2017, pushed the regulator toward a more proactive culture and kicked off the Tabcorp and the Commonwealth Bank investigations. Still, it’s clear that the agency is some way from being as aggressive as it should be. Last year’s media reports aren’t the first time that public accusations about money laundering breaches have been made against Crown. Independent legislator Andrew Wilkie in 2017 told parliament that casino staff exploited loopholes to avoid disclosing reportable transactions to Austrac (Crown denied the claims).Better funding and collaboration with other agencies would probably help. The number of suspicious transactions reported to Austrac has more than tripled over the past five years, but funding from government and its own paid-for activities is only up by about a third. As it is, the regulator’s relatively small staff is stretched to sort through all the information they’re receiving. Extracting legal penalties from large companies is even more expensive.Meanwhile, criminals aren’t standing still. The latest avenue for money laundering is probably over- and under-invoicing of traded goods, but that’s even harder to track. Unlike cash laundering, which involves a relatively small number of casinos and financial businesses, invoice-based laundering can take place between almost any two companies in the world.Austrac’s gradual shift toward a more active stance in recent years is welcome, but it will need to go still further. If you want to hunt rats, it’s no good hanging out in your kitchen. Going down into the sewers may be a thankless task, but it’s the only way to get the job done.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
02 Oct, 2020
Flexi ABS Trust 2020-1 -- Moody's assigns provisional ratings to Australian consumer ABS issued by Flexigroup
Moody's Investors Service has assigned provisional ratings to the notes to be issued by Perpetual Corporate Trust Limited in its capacity as the trustee of the Flexi ABS Trust 2020-1. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
23 Sep, 2020
Australian shares climbed on Wednesday by their most in more than two months as expectations grew that the central bank would cut interest rates in two weeks. Westpac economist Bill Evans said he expects the Reserve Bank of Australia (RBA) to further cut rates from a record low of 0.25%, sending the Australian dollar and three-year bond yields lower. The view follows a speech by RBA Deputy Governor Guy Debelle on Tuesday where he signalled the likelihood of more monetary easing, and after National Australia Bank economists said they see a "significant risk" of a cut to the cash rate.
16 Sep, 2020
Australian shares followed their U.S. peers higher on Wednesday, led by tech stocks, as investors awaited the Federal Reserve's policy statement due later in the day for its view on the U.S. economy. Later in the day, the Fed will conclude its two-day meeting, its first since adopting a more accommodative approach to inflation and pledging to keep interest rates low for longer. James Tao, a market analyst at CommSec, said investors were waiting for the Fed chairman's commentary given expectations that the central bank will keep interest rates on hold.
07 Sep, 2020
Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can...
24 Aug, 2020
(Bloomberg Opinion) -- Rockers Van Halen had an infamous way of spotting problems when they were setting up for live gigs.Tour riders at concerts would request bowls of M&Ms backstage with all the brown candies removed. Rather than a symptom of rock-‘n’-roll excess, the demand was a test for venue managers setting up the band’s elaborate shows, according to vocalist David Lee Roth. If brown M&Ms were present, it was a signal that electrical, audio and safety issues might have been skimped on, too.There’s a lesson in that for David Murray, the veteran Australian banker who resigned Monday as chairman of ailing fund manager AMP Ltd.Murray is a former chief executive officer of Commonwealth Bank of Australia and author of a 2014 official report into the country’s financial system. He was brought in just over two years ago as part of a board clean-out to address scandals arising from a government inquiry by High Court judge Kenneth Hayne, including charging life insurance fees to dead people and lying to the corporate regulator. Murray has been brought down by his insouciant approach to an entirely different outrage: reports in the Australian Financial Review that an executive who’d seen his bonus docked after settling a sexual harassment complaint had been promoted to head AMP’s investment management unit. Director John Fraser will also leave, AMP said Monday, and the company’s Australia boss quit without explanation last month.For several years, Murray has used his position as a lion of the country’s financial industry to oppose regulators seeking to draw links between general misconduct and their core oversight activities.A push by government agencies to more closely scrutinize the internal behavior of companies was overreach that would lessen competition because “you can’t regulate for culture,” he said shortly before starting at AMP. “The distinctive culture of one organization is part of its competitive advantage,” he argued in 2016.Let’s set aside what the current case and resulting internal revolt among employees say about AMP’s “distinctive culture” and the extent to which it’s a competitive advantage. The lasting lesson should be that regulators tasked with ensuring a stable and honest corporate sector are quite right to take a holistic view of the way a company runs itself, by peeking into the metaphorical M&Ms bowl for tell-tale signs of bad behavior. After all, the real test of a company isn’t so much whether sexual harassment occurs in the workplace, but how management handles it. A company that promotes someone whose pay was reportedly docked A$500,000 ($358,000) in settlement of a case involving a subordinate isn’t sending a message that women are valued. Nor is it signaling that credible complaints from lower-ranking employees will provoke any introspection. Instead, it’s telling those with qualms about internal practices that their worries will more likely be quashed and ignored.That’s precisely the cultural problem running through the Australian financial services industry. Quite apart from the practices revealed in the Hayne Royal Commission and the current sexual harassment case, there have been other examples involving breach of money-laundering laws by Commonwealth Bank and Westpac Banking Corp. and attempts to manipulate the country’s lending-rate benchmark.The symptoms of the rot look similar in multiple cases: turning a blind eye to misconduct; giving more credibility to those viewed as “profit centers”; a lack of scrutiny by boards and management; dishonesty and obfuscation when caught out. Regulators are quite right to be keeping more of an eye on these sorts of issues. Murray's fate is a powerful demonstration of his own myopia in opposing that sort of oversight.His replacement as chairman will be Debra Hazelton, who had previously worked in Tokyo to shake up the global corporate culture of Mizuho Financial Group Inc. That’s likely to be key to her success in the years ahead.The dinosaurs who tried to wall off the internal practices of Australia’s financial industry as a private matter that regulators had no business investigating have had their day. Businesses that don’t behave with integrity in the future will quickly lose the trust of both their customers, and their staff.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
12 Aug, 2020
Commonwealth Bank of Australia (CBA) slashed its annual dividend by more than half to the maximum payout allowed by regulators, even as bad loan provisions amid the coronavirus pandemic drove its annual cash profit below market expectations. The payout by Australia's largest lender is expected to set the pace for other banks in the country, where dividends are closely watched as around 8% of the population manage their own retirement income. CBA declared a final dividend of A$0.98 ($0.6988) per share, versus last year's A$2.31, given the regulatory order for banks to pay out less than half their profit.
30 Jul, 2020
By Bryan Wong
23 Jul, 2020
(Bloomberg Opinion) -- It’s not only gold that glitters. Since touching its weakest level in more than a decade in March, silver has doubled to a seven-year high of almost $23 an ounce. Partly, it’s a rally fueled by the same low-yield, weak-dollar haven dynamic that has pushed bullion to within spitting distance of a record. Investor demand is booming and silver — which is the best conductor of electricity — has industrial uses, too. Short-term supply, meanwhile, has been dented by pandemic-related closures. The metal can keep shining.Silver tends to loosely track gold. Like the yellow metal, it is benefiting from investors’ jangled nerves, with the global economic recovery looking slow and further coronavirus outbreaks almost certain. Rock-bottom borrowing rates have also reduced the opportunity cost of holding a non-interest-bearing asset, and there’s no sign of a change. Investor demand is responsible for much of this accelerated rally. This year alone, exchange-traded funds have increased their gold holdings by more than a quarter to surpass 106 million ounces, according to data compiled by Bloomberg, taking the total value to almost $200 billion. Silver holdings have climbed 40%, to more than 850 million ounces. In the futures market, net managed money long positions are climbing back toward levels seen at the end of 2019. The Silver Institute, meanwhile, estimates retail bullion coin sales jumped by an estimated 60% in the first half from a year earlier. Speculative interest in China, which helped drive silver to all-time highs in 2011, is also showing signs of life.Demand from other quarters is less dramatic, though still encouraging. It helps that silver has a range of applications, unlike gold, which is generally too expensive for industrial uses. Not all are growing: Appetite from photography has ebbed since the advent of the digital camera, while the consumer electronics and automotive sectors have suffered from the squeeze the pandemic has put on households. Yet silver jewelry is expected to drop less than gold, given its relative affordability. Solar panels, meanwhile, should benefit from green-tinged recovery efforts — photovoltaic cells account for about a fifth of silver’s industrial demand. China is the world’s biggest solar power market, and will increase installations this year, despite the slow start to 2020. The country’s silver imports have been running above average. Longer term, the advent of next-generation telecoms technology will help, too.All the while, supply has been severely disrupted by coronavirus closures and other containment measures, particularly in Peru and Mexico. The Silver Institute earlier this month put the expected drop in mine production at 7% for 2020, even after recent restarts. The issues go beyond the pandemic. Output has been trending lower in recent years, with large primary-silver mines aging and new ones holding less of what is one of the world’s rarest metals. Silver is usually a byproduct, meaning most production comes from mines that primarily dig out zinc, lead, copper or gold. That’s good news for miners like Mexico’s Fresnillo Plc, with large primary silver operations. Despite marginal increases expected from 2021, rivals can’t simply crank up production in response to higher prices. At a time of tight exploration budgets, a little shiny silver can’t make up for plenty of lackluster zinc.Comparing silver with gold suggests the rally has further to run. The silver-gold price ratio, currently around 1.2%, is edging closer to its long-term average of around 1.5%, according to analyst Vivek Dhar at Commonwealth Bank of Australia. He points out previous sharp run-ups in silver have seen the ratio climb to 2.2% or 2.4 before retreating%. That leaves room for silver to keep shining. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
21 Jul, 2020
Commonwealth Bank of Australia, Hong Kong -- Moody's announces completion of a periodic review of ratings of Commonwealth Bank of Australia
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Commonwealth Bank of Australia and other ratings that are associated with the same analytical unit. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
ASB Bank Limited -- Moody's announces completion of a periodic review of ratings of ASB Bank Limited
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of ASB Bank Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
30 Jun, 2020
By Bryan Wong
11 Jun, 2020
Earlier this week investment bank Goldman Sachs (NYSE:GS) predicted gold climbing to $1,800 per ounce on a 12-month basis. That would be a new high for the year, above the $1,788.80 reached at the beginning of April, which was also the highest since 2012.