Inquiry recommends 4 pillars stay, life insurance caps to be zero: ASX gains 0.5% Monday

Market Reports

by Jessica Amir

It has been a positive start to the week for the Australian share market, gaining 0.5 per cent as the market awaited the Financial Services Royal Commission final report from Hon Kenneth Hayne, which was handed down after the stock market settled. 

So far, what we do know is there will be a crackdown on commissions, with no borrower or the lender to pay a fee for home loans. For life insurance, the reports says ASIC should consider reducing the cap on commissions and ultimately reducing the commission cap to zero (page 26 of the report). In terms of the regulators of the sectors, the ‘twin peaks’ model of financial regulation should be retained (page 26). There are 17 banking recommendations and a lot of other recommendations. Hayne’s 951-page final report also kept the four pillars of the Australian banking system unchanged.

Financials gained 1 per cent today, and week-on-week the sector is 2.6 per cent lower, but longer term - over the month, it’s gained 1.3 per cent.

At the closing bell the S&P/ASX 200 index closed 28 points higher, or 0.5 per cent higher, to finish at 5,891 points. 

Futures

Dow futures are suggesting a gain of 10 points.
S&P 500 futures are eyeing a rise of 0.25 points.
The Nasdaq futures are eyeing a gain of 6 points.
And the ASX200 futures are eyeing a 28 point rise tomorrow morning

Local economic news

Building approvals fell 8.4 per cent in December 2018 in seasonally terms, on the back of a 18.8 per cent slump in private dwellings (excluding houses). It came as surprise to the market, as consensus expected approvals to rise 1.8 per cent.

Company news 

Goldman Sachs says it maintained its neutral position on Netwealth Group (ASX:NWL) with Goldman saying although the financial services company’s inflow missed its forecasts, it is temporary. The company will release its results on 18 February 2018. Shares in Netwealth Group (ASX:NWL) closed 1 per cent lower at $6.97.

Boral (ASX:BLD) released a statement today showing its first-half profit in Australia has taken a hit. For the first half of FY2019 it expects net profit after tax to be approximately $200 million and EBITDA to be about $485 million.

Litigation funding provider, IMF Bentham (ASX:IMF) etched gross revenue of $9.1 million in the December 2018 quarter, with 11 new unconditionally funded investments being added to the portfolio, with a total enterprise value (EPV) of $672 million. As at the end of the quarter IMF’s approved investments totalled 91, with a total EPV of $7.6 billion.

Propel Funeral Partners (ASX:PFP) has executed purchase agreements in New Zealand, which includes the purchase of the Waikanae Funeral Home and the Kaitawa Crematorium north of Wellington, as well as Howard & Gannon Funerals, which is in the coastal city of Napier. In its last financial year, the businesses conducted around 300 funerals, generating NZ$2.7 million in revenue.

Shipbuilder Austal (ASX:ASB) has increased its expected revenue to $1.9 billion, up from $1.3 to $1.4 billion, for FY2019.

Best and worst performers of the day

The best performing sector was Utilities adding 1.6 per cent while the worst performing sector was Materials, shedding 0.3 per cent.

The best performing stock in the S&P/ASX 200 was Western Areas (ASX:WSA), rising 5.7 per cent to close at $2.41. Shares in Steadfast Group (ASX:SDF) and Syrah Resources (ASX:SYR) followed higher.

The worst performing stock in the S&P/ASX 200 was Boral (ASX:BLD), dropping 7.9 per cent to close at $4.55. Shares in IOOF Holdings (ASX:IFL) and Domain Holdings Australia (ASX:DHG) followed lower.

Asian markets

Japan’s Nikkei has added 0.4 per cent, Hong Kong’s Hang Seng has added 0.2 per cent and the Shanghai Composite has gained 1.3 per cent.

Commodities and the dollar

Gold is trading at US$1,313 an ounce.
Iron ore price rose 0.2 per cent to US$85.53.
Iron ore futures are eyeing a rise of 6.3 per cent.
Light crude is $1.47 up at US$55.26 barrel.
One Australian dollar is buying 72.29 US cents.