Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Australia: Banks stocks supported by housing finance growth

Australian market holds the line as bank stocks are supported by growth in housing finance

By Ric Spooner (Chief Market Analyst, CMC Markets)
12.55 AEDT, 12 November 2012

China’s October export performance and Australia’s housing finance growth both serve to remind investors that there are plenty of “green shoots” for world economies at present and that the US “Fiscal Cliff” represents a risk in both directions. Improved consumer sentiment, signs of life in housing markets and a levelling out in China’s economy all potentially form a decent base for improved markets in 2013 if US politicians are able to negotiate a confidence building solution to the fiscal problem.

The Australian stock market has outperformed the US markets since the Presidential election and this may continue under present conditions. While a major fiscal drag on the US economy would reverberate through all world economies, the recent decline in US markets also reflects positioning for the risk to US investors posed by the potential for removal of tax concessions on dividends and capital gains as part of any US fiscal agreement.

Today’s housing finance figures are encouraging for those investors seeking refuge in bank dividend yields in recent months. Loan growth follows an uptick in building approvals over the past couple of months and increases the probability that bank stocks can continue to provide investors with an attractive yield while at the same time achieving moderate earnings growth.

The August peak at 4403 remains a key support level for the S&P/ASX 200 index. While the market remains above this level, the chances are that the current correction will be relatively shallow and the impact of fiscal cliff nerves relatively contained. A break below that level would indicate more serious investor pessimism and a correction of the whole rally from the June low at 3985. That could see a test the 200 day moving average at around 4280.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news