RBA warns of commercial property risks: Aus shares 0.1% lower at noon

Market Reports

by Katrina Bullock

The Australian share market opened slightly higher and is off to a rocky start, rising and falling below the line in early trade. The S&P/ASX 200 index is 7 points down or 0.1 per cent lower at 6,095. On the futures market the SPI is pointing to a 5 point fall.

Local economic news

The Reserve Bank of Australia has released the Financial Stability Review. It found that despite the sharp decline in output and employment in the first half, overall household income, and savings have increased thanks to the large fiscal stimulus payments. It confirmed that Australian businesses generally had low levels of debt going into the crisis and that income support measures, rent relief and loan repayment deferrals have helped maintain cash flow despite the sharp reduction in revenue. It also warned that business failures are set to rise substantially when loan repayment deferrals and income support come to an end and that this will have flow-on effects to their creditors and their employees. It highlighted the significant risks faced by lenders and investors who hold commercial real estate, as Covid continues to cause structural changes which are driving vacancy rates higher and valuations lower.

The Australian Bureau of Statistics has released data on lending indicators for the month of August. In August, new loan commitments in seasonally adjusted terms rose 12.6 per cent month on month. Both owner occupiers and investors displayed the third consecutive month of growth in August, following historically large falls in May. The number of owner occupier first home buyer entering the market has increased. With loan commitments for first home buyers up 37.3 per cent compared to the same period last year.

Company news

The Board of QANTM Intellectual Property (ASX:QIP) has announced the resignation of Hasaka Martin as a Company Secretary effective immediately. Martin Cleaver will continue to serve as Company Secretary of QANTM in addition to his role as Chief Financial Officer. Shares in QANTM Intellectual Property (ASX:QIP) are trading almost 1 per cent higher at $1.04.

Myfiziq (ASX:MYQ) has engaged Ladenburg Thalmann & Co as lead underwriter for its NASDAQ initial public offering. Ladenburg is a US-based investment bank and has been a member of the New York Stock Exchange for more than 135 years. MyFiziq has developed body measurement software. It uses pictures taken on your smart phone to create a representation of an you in the form of a 3D avatar with accurate circumference measurements. The software has a number of applications across the health & fitness, online clothing, insurance, and medical industries. Shares in Myfiziq (ASX:MYQ) are trading almost 2 per cent higher at $1.29.

Best and worst performers

The best-performing sector is Energy, adding 0.4 per cent, while the worst performing sector is Healthcare, shedding 1 per cent.

The best performing stock in the S&P/ASX 200 is Janus Henderson Group (ASX:JHG), rising 6.6 per cent to $37.50, followed by shares in Cimic Group (ASX:CIM) and ARB Corporation (ASX:ARB).

The worst performing stock in the S&P/ASX 200 is Zip Co (ASX:Z1P), dropping 5.8 per cent to $7.47, followed by shares in Harvey Norman Holdings (ASX:HVN) and Nanosonics (ASX:NAN).

Commodities and the dollar

Gold is trading at US$1,903 an ounce.
One Australian dollar is buying 71.76 US cents.