If you already own Hybrids you’ll be familiar with some of their benefits: attractive yields, access to franking credits and lower volatility relative to equities. However, as terms and conditions differ from security to security, Hybrids can be a complex and admin intensive asset class for investors. Show More
In The AFR I argue that even after CBA and NAB hiked rates by 0.15 to 0.17 percentage points in the last two days, they are going to need to raise them again---or not fully pass-on any future RBA cuts. The majors have accumulated $31bn of common equity tier one... Show More
In The AFR I argue the Turnbull government has (correctly) paved the way for up to 0.40 percentage points of total out-of-cycle bank home loan rate hikes by both firmly backing the Financial System Inquiry's capital/leverage recommendations, and giving APRA discretion to implement them. One silver lining is that Standard... Show More
In The Australian Financial Review I consider what the new Prime Minister, Malcolm Turnbull, really means for Aussie financial markets and the quality of the next generation of political leaders Turnbull will promote. I also reflect on how Turnbull will react to the two hard-hitting speeches delivered during the week... Show More
In this AFR column I note that my 22 July analysis headlined "Westpac's hybrid deal a dud" annoyed both the bank and the many folks spruiking the overpriced Westpac Capital Notes III (WBCPF) security to naive investors in exchange for 100 basis point commissions. Yet, based on the searing 3... Show More
In The AFR I evaluate one of the greatest long-term threats to conventional banks: the post-GFC revival of "non-banks" and "marketplace" funding, where the latter is also known as "peer-to-peer" (P2P) lending. Ironically, the 1997 Wallis Inquiry into Australia's financial system forecast that banks and their balance-sheets would be largely... Show More
In The AFR I present one of my more important analyses of the major banks---a must read for anyone with equities exposure---that tears apart leading analyst forecasts to find an essential Achilles heel at the heart of current valuation models. In short, even the more gloomy analysts like UBS's No.... Show More
Apparently Westpac was compelled to improve the skinny margin on its new ~$1bn perpetual non-voting equity hybrid following my AFR critique last week. "As a result of the AFR's analysis there was clearly investor resistance and Westpac was forced to push up the margin a solid 20 basis points to... Show More
In The AFR today I address the uncertainty swirling around APRA's finding that the major banks are short 200 basis points of "capital" and speak to a large institutional investor who thinks CBA should take the cheapest equity in history off the table via a $10 billion rights issue. The... Show More
In The AFR today I report S&P will likely upgrade the major banks' stand-alone credit profiles from single "A" to "A+" if, as expected, they boost their Common Equity Tier 1 (CET1) capital by more than 120bps. The widely-accepted new-normal for the major banks' core equity is 10% of risk-weighted... Show More
In The AFR I interrogate one of the craziest claims to ever emerge from the RBA's Martin Place headquarters: the proposition that Aussie house prices are now "30% undervalued" having been "fair value" 12 months ago. With careful analysis I show that according to the RBA's own modelling the "fair... Show More
