ANZ Banking Grp Ltd (ANZ) will go ex dividend on 8/11/2012. The current dividend payment is 0 cents and it is 0% franked. The record date is 14/11/2012 and the dividend will be paid on 19/12/2012. Based on the full year payment the dividend yield is 5.5%.
*Current Yield: 0.0% Franking: 0% DRP Discount: 1.5%
*Yield has been calculated on the closing price on the 24/10/2012. Current yield is based on the current dividend payment only.
ANZ National Bank (ANZ) announced that after almost ten years of operating ANZ and The National Bank in New Zealand, the two brands would be brought together as ANZ. New ANZ will remain in all communities now served by ANZ and National Bank. $100 million will be spent on branches, with branch presence in New Zealand increasing from 75% of where New Zealanders live to 90% – 15 new communities. ANZ will adopt The National Bank’s technology system and the majority of its products.
ANZ National Bank CEO David Hisco said The National Bank brand would progressively be phased out over about two years from around the end of October. The company’s legal name would become ANZ Bank New Zealand Ltd. “ANZ bought The National Bank in 2003 and after almost ten years of reducing duplication, the next logical step is to combine them into one,” Mr Hisco said. “In recent years we’ve made things simpler for customers by creating one management structure across both banks, one customer approvals process and, very soon, we’ll be moving to one set of products and The National Bank’s technology system. “The black horse and green colour branding of The National Bank are licensed from British bank Lloyds TSB, and that licence expires in 2014. So it makes sense to change to ANZ, the brand used in 32 markets around the world.
ANZ Bank (ANZ) announced plans to invest a further Renminbi (RMB) 2 billion (A$300 million) in its locally incorporated subsidiary in China, Australia and New Zealand Bank (China) Company Limited (ANZ China), to support ANZ’s continued growth in China. ANZ became the first Australian bank to be locally incorporated in China in 2010. The additional capital is the first since an initial investment of RMB 2.5 billion (A$395 million) bringing its registered capital to RMB 4.5 billion (A$695 million).
In Beijing, ANZ Chief Executive Officer Mike Smith, said: “Our business in China has grown steadily since we established a presence in 1986 and the additional capital we plan to invest in ANZ China will support further network expansion, growth in customer lending, employee recruitment and product development to better service our customers. “ANZ aims to become a super regional bank in the Asia Pacific region, and China is a strategically important market for us. We are making good progress towards our goal of earning 25% to 30% of Group profit from outside Australia and New Zealand by 2017. “We have a long-term commitment to China and will continue to be an active investor in supporting the nation’s financial services sector,” Mr Smith said.
ANZ China has six outlets in Beijing, Shanghai, Chongqing and Guangzhou, and plans to increase its network to 20 outlets in the next five to 10 years subject to regulatory approval. ANZ also has 20% stakes in Shanghai Rural Commercial Bank and Bank of Tianjin, and a fully-owned rural bank in Liangping county, the Chongqing Liangping ANZ Rural Bank Co Ltd.
SAI Global Limited (SAI) announced that it has been awarded a contract to provide national mortgage settlement services for the Australian and New Zealand Banking Group (ANZ), subject to finalisation of contract terms. SAI is currently providing settlement services to ANZ in Queensland and Western Australia. It is expected that SAI will commence providing services to ANZ under the new contract in additional states in early calendar 2012, with national coverage to be achieved by August 2012. Full incremental annual revenue of circa A$10M per annum will be recognised from financial year 2013 onwards.
Tony Scotton, CEO of SAI said: “I am delighted that ANZ has selected SAI as its national provider of mortgage settlement services. The fact that a leading financial institution such as ANZ has chosen SAI is testament to the dedication, professionalism and capability of the Property team which has positioned the business to achieve this significant outcome for the Company”.
http://www.traderdealer.com.au/fundamentals/sai
GBST (GBT), a global provider of technology services to the financial services industry, announces that it has signed a long term agreement with ANZ for the deployment of GBST’s securities transaction platform, Syn~, for the ANZ Global Markets business. ANZ will use GBST’s Syn~ platform as a complete post trade middle and back office solution. It will enable ANZ to process all types of assets within one system, including fixed income, treasury, equities, and complex OTC derivatives, giving ANZ Global Markets business transparency and control. It will also be used for central reference data management.
Stephen Lake, chief executive of GBST, says: “We’re very excited about expanding the good relationship we already have with ANZ in Australia to support the growth of their business globally. In addition to the existing GBST clients already live in multiple markets in Asia on Syn~, we have a further three new Syn~ implementations underway in Asia as well as our first Syn~ implementation in Australia, all of which are due to go live within the next twelve months.”
GBST’s Syn~ enables financial services organisations to grow their operations in multiple asset classes, markets and currencies in a controlled and scalable manner. GBST is delivering Syn~ to ANZ in conjunction with its Asian distribution and integration partner, Serisys. GBST is a leading provider of securities transaction and fund administration software for the financial services industry. The group comprises four operating segments GBST Wealth Management; GBST Australia Broker Services; GBST Global Broker Services; and GBST Financial Services.
http://www.traderdealer.com.au/fundamentals/gbt
Hyro Limited (HYO), Australia’s oldest and largest digital agency, is pleased to announce that they have been chosen by ANZ as the implementation partner for a major portal project. ANZ provides a range of banking and financial products and services to more than 5.7 million retail customers. The new digital portal solution will enable ANZ with a go-to-market platform for their marketing strategy, and provide customers with an innovative experience by presenting a one-stop-shop of news, research and information sourced from industry experts as well as pre-eminent business leaders. Drawing on extensive digital services experience, Hyro will deliver a range of services for ANZ from customer experience, business analysis, solution architecture to a range of technical and development services.
“We welcome the opportunity to partner with ANZ to drive their business objectives in the e-commerce and digital arena,” said Mr. Bill Votsaris CEO of Hyro.
Hyro is the most experienced digital services company in the Asia Pacific region. Its focus is the provision of solutions for e-commerce and digital solutions including mobile and IPTV throughout Australia and the Asian region. It is one of very few companies in the world that has the capability of providing an end-to-end solution to complex, dynamic business requirements.
http://www.traderdealer.com.au/fundamentals/hyo
ANZ announced a further investment of RMB832 million (A$126 million) in Bank of Tianjin (BoT) as part of a capital raising to support BoT’s strategic growth agenda.
BoT is seeking to raise a total of RMB4.2 billion (A$629 million) in the capital raising and is inviting a number of existing shareholders and new investors to participate. Shares will be issued at RMB5.20 per share which represents a reported price to 31 December 2009 book of 1.9 times and values BoT at RMB15.6 billion (A$2.3 billion).
The additional investment means ANZ will maintain its current 20% stake in BoT. It follows the announcement last month that ANZ would invest a further RMB1.65 billion (A$250 million) as part of a capital raising by Shanghai Rural Commercial Bank (SRCB). ANZ CEO Asia Pacific, Europe and America Alex Thursby, said: “ANZ’s additional investment in the growth of BoT and SRCB demonstrates the depth of our commitment to China and our strategic partnerships.
“Our partnership with BoT provides access to the mass retail and small-to-medium sized business banking markets in the Bohai Economic Region, which is the economic powerhouse of North China and a priority investment area for the Chinese government. “As we deepen the cooperation between the two banks with this investment, ANZ will continue to support BoT in developing a Trade and Markets business and our banks will establish a new business referrals framework to ensure customers have access to our combined capabilities, expertise and market insight.”
Tianjin is the major port of the Bohai Economic Region and has strong trade and investment links to Korea and Japan as well as ASEAN countries, which are growth markets for ANZ. Integrating the economic development of the Bohai Economic Region cities of Beijing, Tianjin and Shijiazhuang is a priority for the Chinese government.
ANZ established its strategic partnership with BoT in 2006 with an investment of A$159 million. ANZ is the bank’s second largest shareholder after the Tianjin Government. BoT has around 4,000 employees, nearly 8 million customer accounts and provides retail, small-to-medium enterprise and corporate banking services through a network of 196 branches and sub-branches and 153 ATMs. The BoT capital raising is subject to approval from its shareholders and regulator approvals.
http://www.traderdealer.com.au/Fundamentals/anz
Recently the Aussie market hit new highs above 4800 and has since pulled back. Was this pullback expected? Well, for some traders it was. The main reason for expecting a pullback was the fact the market was overbought at this time.
The term overbought is often used by traders when referring to individual shares or markets too far away from what the trader considers to be normal or fair value. Even though few traders will agree on the fair value of a share, there are ways to measure what could be considered fair value from a fundamental and a technical standpoint.
Imagine that a share is attached to its fair value by a rubber band. As the share moves further away from its fair value the rubber band stretches, and the further away from fair value the more the rubber band is stretched. The more stretched the rubber band gets the more likely it is to snap back and pull the price back towards the fair value. So let’s look at a couple of ways to look at fair value, then overbought signals. For these examples we’ll be using The Bourse charting software.
A moving average is an average of the price over a period of time. The longer the time period is the smoother the average will be. In The Bourse you can choose from a simple moving average, an exponential moving average or a weighted moving average. The choice of average is not important, with the exponential and weighted moving averages providing more weight to the recent data. The time periods you use will depend on how often you are trading. As a guide I prefer to use a timeframe of around 20 days (approximately one month’s trading).
In the chart below you can clearly see that BHP moves above and below its average, or “fair value”, stretching out and then contracting the imaginary rubber band. We now have a visible reference for overbought or oversold in relation to the moving average. In a similar way you can use a trend line as a measure of fair value and visibly see the deviation from the line to determine whether the share is overbought or oversold.
Now we have determined fair value using a moving average, we can actually put boundaries around the moving average to show overbought or oversold conditions, rather than just measuring it visually. The Bollinger Bands are arranged around a moving average and are 2 standard deviations away from the average. The outer bands include 95% of the price movement. If the price is near, or outside the top band, then the share is overbought, if it is near or below the bottom band it is oversold. A reversal is likely to be close at hand when either of these conditions occur. Looking at the chart below we can see CSL Limited has bounced back and forward between the two outer bands for months.
There is another way to measure oversold objectively, and that is by using oscillators such as RSI, Stochastic or Williams %R. An oscillator “normalises” price action and plots it on a fixed scale, often between 0 and 100. Reference lines are then drawn on the oscillator to mark extreme movements which could be considered overbought or oversold. The level of these references do vary, but The Bourse will plot the default reference levels for you.
When you look at the chart of ANZ Bank below, the overbought areas are marked by the vertical line which is drawn where the RSI indicator touches or breaks above the 70 level. When this level is reached, start looking for a reversal.
If you review these three charts, and others as well in The Bourse, you will see how the market was clearly overbought recently and that a pullback in the market was imminent. As of today the chart of CSL is still overbought, so keep an eye on CSL for signs of a reversal.
By Jeff Cartridge
Education Manager
In last week’s Analyst’s Eye article we considered the standardisation of options. This standardisation is important so that it is easy to understand exactly what it is that you are trading. Every option has an underlying share, is a call or a put, has an exercise price and an expiry date and the price you pay for the option is the premium.
With these five pieces of information in mind let’s consider a trade on ANZ below. We will consider trading a put option in this example, however the process of trading a call is identical if you believe a share is going up, instead of down.
You would buy a put if you believe the share is going down. Buying a put gives you the right to sell 1000 of the underlying share at an agreed price on, or before, an agreed date.
We have chosen the share we wish to trade which in our example is ANZ Bank. We believe from our analysis that ANZ is likely to fall from its current price. ANZ was trading at $23.34 on 2 September 2010. We could therefore buy a put option on ANZ.
So we now look up the put options available for ANZ. As an example through The Bourse charting software, on the toolbar and click the red O toolbar icon, for Exchange Traded Options. We have a choice of expiry dates and exercise prices to make before we can determine the premium (cost) of the option.
Type in the code of the share, which in our case is ANZ, and then select Put to display a list of Put options that are available on ANZ. You will see a list with different expiry dates in the month column, and different exercise prices in the Strike column. The most actively traded options will be near the current price, which is around $23.34.
For any option position you must choose the expiry date you wish to trade. At any given exercise price there is a range of expiry dates. The expiry dates start on Oct 2010 which is about three weeks away, and go all the way out to 2014. The more time an option has until the expiry, the more expensive it will be.
As a guideline option traders would normally take options with between six weeks and three months until the expiry. So on the 21st of July 2010 an options trader would normally consider an expiry date of September the same year. Remember you must allow the share time for the expected move to occur. Most of the time decay for an option occurs during the last month so let’s take a look at the November expiry dates.
Now we can select the exercise price we wish to trade.
With ANZ trading at $23.34 the closest exercise price is $23.50. This would be regarded as the at-the-money option. The $23.00 option is out-of-the-money and the $24.00 option is in-the-money.
An in-the-money option costs more than an out-of-the-money option and is lower risk. The in-the-money option already has some intrinsic value, while the out-of-the-money option is all made up of time value. The different options will behave differently based on the movement in the share.
Premium
It will depend on which option you choose as to the premium that you pay for the option. Assuming that you chose the $23.00 November Put option and you bought the option at market price, you would pay a premium of $1.12 per share. Remember that each option contract is for 1000 shares so the cost of 1 option contract would be $1.12 x 1000 = $1120.
The success of the trade will be determined by the movement of the underlying share, but will also be affected by your choice of option. We will consider three different options and how they perform in different scenarios.
Possible Outcomes
There are three possible outcomes: the share is higher, lower or goes sideways. The change in the price will be determined not only by the direction of the move, but also by how quickly the move occurs. The option is a wasting asset, and the time value decreases as time passes.
All put options will increase in value, with the out-of-the-money option increasing the most. The out-of-the-money option could move into-the-money which would result in a sharp increase in value. Call options would decrease in value as the share moves down.
All put options will drop in value with the sharpest drop shown in the out-of-the-money options. The chance of the out-of-the-money option having value on, or before the expiry date, has become much less, and consequently the value of the option will drop dramatically. Call options behave in the reverse, with prices rising.
All options drop in value as time passes, regardless of whether they are puts or calls. Options are decaying assets and lose time value every day they are owned.
The out-of-the-money option will normally provide the biggest return coupled with the biggest downside if the trade does not go in the direction the trader expected.
There are two main reasons that a trader would trade put options. The first is if the trader wanted to profit from a fall in value in the share. A put option increases in value as the underlying share falls, allowing a trader to buy the options and sell it at a higher price.
Put options, like call options, are wasting assets. The trader must pick both the direction and timing to enter the trade. Strong returns can be made trading put options when shares fall away rapidly, as they did in January 2008. It is important that the expiry date that is chosen provides the trader with enough time for the move to play out, so they can benefit from it. A share moving sideways or upwards is going to cost the trader money.
Investors may want to employ put options as a protection mechanism for their portfolio. The put option increases in value as the share drops, but it also gives an investor the right to sell their shares at the exercise price. If you owned WBC shares and were concerned that the shares might drop, you could purchase put options as protection.
If you were correct and WBC did drop you now have the right to sell WBC at the exercise price of the put option. Alternatively you could sell the put option for a profit and continue to own the shares. This is known as hedging.
Adding put options to your trading toolkit offers you the flexibility to profit in different market conditions. Share traders are limited to making money from a rising share price, but options traders just want the share price to move.
By Jeff Cartridge
Education Manager
Sign up for a FREE trial of The Bourse today
The information provided within this blog is general advice only and you should consult the services of a financial professional in order to ascertain whether the information is applicable to your investment strategies and risk profile.
Morning Market Wrap
China sparks recovery as the ASX looks to finish a positive week strongly. Look to Miners, Energy and Banks for action.
The SPI Futures is above the key level of 4400 the ASX is set to open sharply higher as the SPI closed up 65 points (or 1.5%) at 4,447. Volatility shrinks from the highs of 48 last week to close at 29 overnight, indicating investors are stepping in to the market. Key levels for the SPI today are 4300 and 4550.
US stocks were a sea of green overnight, as China officially confirmed its support for the buying of Euro bonds, describing reports that they were considering dumping its holdings of euro debt as “baseless”. Most actives included: BP up 7%; Apple up 3.8%; Google up 3.2%and Financials were strong with the Bank of America up 4.6%; Citi up 4.2% and Goldmans up 3.3%.
The Dow Jones Industrial Average saw buying from the open, up 284.5 points or 2.9% rising strongly above the key 10,000 level at 10,259. In the broader market the Standard & Poor’s 500 closed up 3.3 per cent, at 1,103. The Nasdaq composite closed up 3.7 per cent, at 2,277. Economic reports helped investor sentiment, with the OECD raising global growth forecasts to 4.75% and April Durable Manufactured orders beating expectations.
European stock markets closed higher, many closing around key support levels, Germany’s Angela Merkel confirmed yesterday that they would be pushing for a strong Euro and China’s news that they will not be dumping their Euro bond holdings. However the euro recovered to around $US1.235, off its 4 year lows.
In the U.K. the FTSE 100 index ended up 157 points, or up 3.1 percent, at 5,937 points, and across in the German DAX 30 ended up 179 points, or up 3.1 percent, at 5,937 points and in France the CAC 40 ended up 3.4 percent, at 3,525.
Oil prices bounced sharply overnight up 4.7%. It had its biggest one day gain since 30 Sep’09. New York Light sweet crude for delivery in July, settled up $US3.04 to settle at $US74.55 a barrel.
Gold for June delivery fell $US1.50 to settle at $US1212 an ounce. Silver for July delivery rose 16.2 US cents to settle at $US18.468 an ounce. July copper settled up 7.80 US cents at $US3.1585 a pound.
Locally Ken Henry spoke to the Senate yesterday, giving a considered approach to the case for supporting the proposed new resources rent tax and rebuking much of the opposition from the big miners.
Our markets are expected to trade sharply higher today. Miners, energy and banking stocks are likely to see buying.
ASX
The SPI Futures is below key level of 4400 the ASX is set to open lower as the SPI closed down 6 points at 4,294; U.S. late selloff. Volatility continues, key levels today are 4200 and 4450.
US Markets
U.S. Markets Surge!
SP500: up 3.3% at 1,103 Miners & Financials Lead Surge
DOW up 2.9% at 10,259
Bounces strongly Above 10,000
NASDAQ: up 3.7% at 2,277
Dollar Index: Lower as Euro Finds SUpport
A$ up 84.95 (strongly off 10-month Lows)
FTSE: up 3.1% at 5,195 – Miners Recover
DAX up 3.1% – Europe Recovers on Chinese saying it will not sell its Euro Bond Holdings
Germany Pushing for Strong Euro
CHINA: up 1.2% at 2,655 – Finding Suport?
HSI up 1.2%
Oil: up % 4.7% ($74.88)
Recovers from – oil spill in Gulf of Mexico is “Top Killed”
Gold: down 0.2% at ($1,21)
Commodities Higher
SPI: Above Key 4400 ASX
SPI up 1.5% at 4,447
ASX News
The SPI Futures is above the key level of 4400 the ASX is set to open sharply higher as the SPI closed up 65 points (or 1.5%) at 4,447. Volatility contracts form highs of 48 last week to close at 29 overnight, indicating investors are stepping back in to the market. Key levels for the SPI today are 4300 and 4550.
AUD – bounces strongly off 10 months lows as China eases investor concerns.
AAX – Ausenco plummeted 18 percent after reporting 1H net loss of $9-$13 million
BXB – is bullish about the Australian economy and the company’s outlook in the U.K. and U.S. was not as bad previously thought.
JHX – FY10 net loss $102.9 million, but they expect to deliver good returns in current market conditions.
LEI – extends 3-year $229m contract by the mine’s owner BHP Mitsui Coal (BMC), at South Walker Creek in Qld.
GNC – 1H10 net profit rises 63 percent and says there may be further opportunities to expand its malt business. Shares up 8.1%
LLC – has confirmed its earnings guidance and says it’s well placed for growth. Shares up 1.6%.
MAP – reports the recovery of passenger traffic at its portfolio of airports is well established and near term growth prospects are strong.
NUF – JPMorgan upgrades to Neutral (from oveweight) but cuts target to $6.13 (from $7.10), saying NUF is trading at discount to global peers, at level
where risks around it appropriately priced
TAL – 1H10 Net Profit up 5% ad expects FY results inline. Shares down 9.7%.
Locally Ken Henry spoke to the senate yesterday, giving a considered approach to the case for supporting the proposed new resources rent tax and rebuking much of the opposition stories from the big miners.
Market volatility will continue near term, but investors will take heart form China’s support of Europe.
We the suggest trading strategy is to accumulate.
Market Summary
ASX – to open sharply higher
US & UK/Europe – US and Europe Surge Higher
US ADRs – Broadly Higher!!!…
BHP up 7.7% & RIO up 9.2%; AWC up 12.1%
ANZ up 8.1% & NAB up 6.5%
NEM up 3.3%, JHX up 3.9%, NWS up 4.3%
Commodities Stock Index up 4.3%
Gold Stocks Index up 2.6%
Oil Stocks Index up 5.1%
By Michael Hevern
Head of Research
