Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
Kiwibank will be dropping fixed rates on Monday. Their 2 yr rate will go down -16 bps, their 3 years rate will go down -14 bps, their four year rate will drip -46 bps and their five year rate will drop -30 bps.
TERM DEPOSIT RATE CHANGES
Nothing to report here today.
AMP ADVICE CHANGES
AMP has today apologised unreservedly for the misconduct and failures in regulatory disclosures in their advice business following revelation at the Royal Commission into Financial Services in Australia. The CEO, Craig Meller, will step down from his role immediately. Mike Wilkins, a board member and former CEO of IAG, has been appointed to replace him. They have agreed to an independent audit and review inside the business. And firms internal legal leadership has been dumped. Many expect Catherine Brenner, the chairman, to go soon too. No changes in their New Zealand business were announced.
NEW BIG PENALTIES (?)
The shocking revelations at these Royal Commission hearings has forced the Aussie Government to beef up penalties. For the most serious criminal offences under the Corporations Act the new maximums will be: For individuals: (i) 10 years' imprisonment; and/or (ii) the larger of AU$945,000, or three times the benefits; For corporations: (i) the larger of AU$9.45 mln OR (ii) three times benefits, or 10% of annual turnover. If you are CBA, 10% of annual 2017 revenue amounts to only $4.4 bln because bank revenue does not include lending amounts. CBA has shareholder funds of AU$63.7 bln so that maximum penalty would only amount to 6.8% of that equity, and less than half of its annual tax-paid profit.
CHINA MARKETS WOBBLE
Equity prices in Shanghai are down almost -1% today and their bond yields are sinking, both indicators of a struggling market. This shift down is specific to China; Tokyo is up, and Hong Kong is level pegging.
SKYCITY CAN"T SELL
SkyCity Entertainment wants to sell its Darwin casino business in Australia's Northern Territory for at least A$200 mln. However it hasn't yet attracted a buyer because the asking price is seen as "a little too high".
CONSOLIDATION
T&G Global will sell its Kerikeri-based kiwifruit orchards, packhouse facilities and assets to Seeka, New Zealand's biggest kiwifruit grower, in a deal worth around $40 million, the two said in a joint press release.
BENCHMARK INTEREST RATES STEEPEN
Local swap rates steepened today. The two year rate fell -1 bp, the five year rose +1 bp, and the ten year rate rose +3 bps. The UST 10yr yield is now at 2.92%, (+6 bps). The Aussie Govt 10 yr is now at 2.82% (up +5 bps). The China 10 yr is down sharply again, this time by another -4 bps to 3.52%. Remember, the China 10yr was 3.85% at the beginning of March and 3.78% at the beginning of April. The NZ Govt 10 yr is up +3 bp at 2.88%. And the 90 day bank bill rate is up another +1 bp to 2.06% today and steadily rising still.
BITCOIN RISES
The bitcoin price is now at US$8,330 which is +1.8% higher today.
NZ DOLLAR STILL MOVING LOWER
The NZD is still in its softening trend. It is now at 72.5 USc. Ditto on the cross rates where we at 93.9 AUc and at 58.7 euro cents. That puts the TWI-5 at 73.7 and again just lower than this time yesterday.
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5 Comments
Here's what AMP NZ has to say; "In New Zealand, we operate within a different regulatory and governance framework, with different operating and distribution models. We do not have the same Buyer of Last Resort (BOLR) contractual model in New Zealand - which is a core focus of many of the current issues being examined. We continue to maintain an open and transparent relationship with New Zealand regulators – the FMA and RBNZ."
Doesn't really what AMP NZ says, the brand has pretty much been soiled. To many of their customers, it probably won't resonate too much, but it will definitely rise should a customer experience negative sentiment. AMP will be scouring the internet to monitor negative sentiment.
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