Afterpay's algorithm better than the banks' - but will it save them from regulation? Credit cards are losing favour with Australian consumers, and a Californian energy firm goes into bankruptcy with US$30 billion in liabilities. Here's what's happening in markets today.

What I'm reading this morning

Afterpay rejects calls for regulation

Afterpay's Craig Emerson says their internal algorithms are better than a bank's credit check, with as much as 50% of first time customers being rejected. Despite this, competitors and consumer groups are calling for "Buy Now, Pay Later" to be brought under the National Credit Protection Act.

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Credit cards losing their appeal with Australian consumers

There are less than 16 million credit cards now on issue in Australia, the lowest number in nearly four years. Balances are heading south too, with the outstanding balances dropping 3.1 percent last year. 

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Californian wild fires send energy firm into bankrupty owing $30 billion+

US energy firm, PG&E could face up to $30 billion in liabilities resulting from last year's devastating fires. Some reports are suggesting their equipment may have lit the fires. Separately, retail bond holders could be on the hook, as half of the firm's US$920 million of outstanding bonds are owned by Vanguard. 

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Stocks to watch

  • The market correction has started to bite for Praemium (PPS), whose recently released December 2018 quarterly update shows that funds under administration (FUA) fell in the December quarter, despite significant inflows. 
  • Hub24 (HUB) also released its December 2018 quarterly update, but a record $1.5 billion inflow managed to offset the effects of the falling market, as their FUA topped $10 billion for the first time. 
  • Navitas (NVT) received an updated bid from BGH Consortium today. After the board previously rejected the offer of $5.50 cash per shares. The board has stated they intend to recommend the improved offer of $5.825 cash per share. NVT last traded at $4.90, and at the time of writing, the indicative crossing price is $5.11. 

Market data

  • ASX Futures: 5725 (+0.16%)
  • AUD/USD: 0.7195 (-0.03%)
  • ASX200: 5773.4 (-0.02%)
  • S&P 500: 2582.61 (-0.53%)
  • China A50: 10595.62 (-0.98%)
  • Australia 2-yr bond: 1.871 (+0.16%)
  • Australia 10-yr bond: 2.284 (+0.44%)
  • US 2-yr bond: 2.539 (-0.24%)
  • US 10-yr bond: 2.706 (+0.28%)
  • Gold (USD/oz): 1291.85 (+0.18%)
  • Copper (USD/lb): 2.63 (-1.2%)
  • Brent Oil (USD/bbl): 59.27 (+0.05%)
  • 62% Iron Ore (USD/t): 74.85 (+0.54%)

Upcoming events and data

  • UK Parliament will vote on Theresa May's Brexit deal overnight tonight local time. 
  • British CPI released on Wednesday evening local time
  • No major Australian data due this week. 


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