Tag Archives: Banking Services (TRBC level 3)

UPDATE 2-New Zealand’s central bank to consider the impact of monetary policy on housing | Instant News


* Housing is added to RBNZ authority, but not mandate

* The RBNZ needs to explain its impact on housing on a regular basis

* Mortgage debt-to-income and interest-only ratio considered (Adding background, comments from analysts and opposition leaders)

WELLINGTON / SYDNEY, February 25 (Reuters) – The New Zealand government on Thursday tasked the country’s central bank with considering the impact of its monetary and financial policy decisions on housing prices, a move to help calm the country’s fiery property market.

Finance Minister Grant Robertson said the Reserve Bank of New Zealand (RBNZ) should consider government policies regarding more sustainable housing prices.

“Today’s announcement is just the first step as the government weighs broader suggestions on how to cool the housing market,” Robertson said in a statement. “We know the rapid improvements we’ve seen in recent months are not sustainable, which means many first-time home buyers have a hard time accessing the market.”

The government’s authority ceases to impose new monetary policy objectives in the RBNZ, the first step in the world that RBNZ Governor Adrian Orr warned late last year when the government first pitched the idea.

Orr argued that adding housing to the bank’s mandate could make monetary policy less effective and affect the efficiency of financial markets, adding that monetary policy alone cannot fix the housing problem.

Orr on Thursday welcomed the addition of remits, which take effect March 1, noting that monetary and financial policy is one of the “many influences on house prices.” He also stressed the monetary policy committee’s targets – maintaining price stability and maximizing sustainable employment – remain unchanged.

Prime Minister Jacinda Arden’s government is under pressure to fix the country’s housing crisis, especially after the failure of its flagship public housing program failed. Property prices have skyrocketed in the past six months due to severe housing shortages and low interest rates.

Like many central banks during the coronavirus pandemic, the RBNZ has pushed interest rates to record lows, relaxed mortgage lending restrictions and incorporated NZ $ 100 billion ($ 70.4 billion) into quantitative easing programs.

These measures, while boosting the economy, have sparked an unprecedented housing market boom. In its latest forecast, the RBNZ sees house price inflation rising to 22.4% by the middle of this year, much higher than the November forecast of 7.9% for this year to June.

POLICY REGULATION

The New Zealand dollar touched its highest level since August 2017 following the government’s announcement, as it reinforces the view that monetary policy will be tighter. The ten-year New Zealand government bond yield was 1.82%, the highest since May 2019.

“Paying attention to housing may make the Reserve Bank more inclined towards meeting its inflation and employment targets … that means monetary policy is tighter than expected in the near term,” said Westpac senior economist Michael Gordon.

An immediate impact on the housing market itself is unlikely, said Gordon.

“The thing that is going to lower house prices are higher interest rates,” said Gordon. “It’s still cheaper to borrow now because it’s been going on for decades.”

Under the amendment, the RBNZ will retain autonomy over how its decisions take into account potential housing consequences, but will need to explain regularly how it takes into account the housing market outcomes.

Banks should also consider the government’s goals to support more sustainable housing prices, including by reducing investor demand for existing housing stocks to help increase the affordability of first-home buyers.

The RBNZ said it was investigating government requests for advice on implementation tools such as debt-to-income ratios and interest-specific mortgages. (Reporting by Renju Jose and Praveen Menon; editing by Jonathan Oatis, Rosalba O’Brien and Jane Wardell)

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Italy will continue to advance with sales of Monte dei Paschi under Draghi – sources | Instant News


ROME (Reuters) – Italian Prime Minister Mario Draghi’s new government aims to tackle troubled bank Monte dei Paschi by pushing a plan to re-privatize its losing lenders, said sources close to the matter.

FILE PHOTOS: People seen inside the bank of Monte dei Paschi in Siena in Rome, Italy August 16, 2018. REUTERS / Max Rossi

Rome spent 5.4 billion euros ($ 6.6 billion) in 2017 to rescue Tuscan banks, leaving the state with a 64% stake. MPS now needs another 2.5 billion euros to rebuild its capital reserves.

A sale would stop the MPS from becoming a permanent taxpayer drain and would allow Italy to fulfill its commitments to the European Union made at the time of the bailout.

With Italy’s change of government, there is speculation that Draghi, the former head of the European Central Bank, could use his cachet with European authorities to buy more time and delay the sale of MPS.

But a source briefed on the government’s plans said both Draghi and Economy Minister Daniele Franco intend to continue working to seal a merger deal for MPS with stronger rivals.

The prime minister’s office declined to comment.

Finding MPS buyers has proven difficult despite the ample incentives from the Ministry of Finance to sweeten the deal.

Italy has negotiated the sale of MPS to UniCredit but a change at the helm of Italy’s second-largest bank has halted talks.

New UniCredit CEO Andrea Orcel, who started his job after mid-April, may prefer other options in Italy’s consolidated banking sector, sources said.

With the sales prospect fading in the near future, MPS auditors have expressed concern about the bank’s financial future, said three people with knowledge of the matter.

The MPS is working to ensure auditors sign off on its accounts, a formality required for Thursday’s board meeting, the people said.

MPS declined to comment.

Annual losses at Tuscan banks jumped more than 60% to 1.7 billion euros last year.

Reported by Giuseppe Fonte in Rome and Valentina Za in Milan. Edited by Jane Merriman

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Commodity rally helped Australian stocks close nearly 1% higher | Instant News


* Higher oil prices due to lower production benefit energy stocks

* Copper prices continue to strengthen due to limited supply

* Tech stocks track Wall Street peers lower (Updates to close)

Feb 23 (Reuters) – Australian stocks closed almost 1% stronger on Tuesday, as stronger commodities boosted market expectations of better growth prospects and lifted miners and energy stocks.

The S & P / ASX 200 index rose 0.9% to 6,839.2 at the close of trading.

Participants also watched for a possible change in the view of the US Federal Reserve from Chairman Jerome Powell in his testimony before the Senate Banking Committee at a later date.

Commodity prices rose as oil prices rose on the prospect of tight global supplies after US production was hit by cold weather and a meeting of leading crude producers is expected to hold back most of the production.

Australia’s energy stockpile rose 4.9% due to stronger oil prices.

Oil and gas explorers Woodside Petroleum and Santos Ltd were up 5.7% and 5.9%, respectively.

Gold stocks surged 2.8%, with spot gold hitting a one-week high as inflation concerns boosted gold’s appeal as a hedge.

Miners gained 2% on the back of continued increases in copper prices, helped by limited supply and strong demand expectations.

Copper-exposed global miners, BHP Group and Rio Tinto, rose 3.1% and 1.8%, respectively.

Leading independent gold miner Newcrest Mining jumped 4.4%, while peer Bellevue Gold gained 5.1%. Finance also rose, with the so-called “Big Four” banks rising in the 1.1% to 1.9% range.

Tech shares followed Wall Street peers lower to fall 4.1%, with buy-now-pay-later Afterpay Ltd tumbling 7.2%, while accounting software maker Xero Ltd lost 2.7%.

SEEK Ltd closed 7.1% lower after the job portal operator said it was in talks to cut its stake in China’s Zhaopin unit by A $ 2.2 billion ($ 1.74 billion).

In New Zealand, the benchmark S & P / NZX 50 index was down 0.3%, pulled down by utilities and health care stocks.

($ 1 = 1.2628 Australian dollars)

Reporting by Soumyajit Saha in Bengaluru, Editing by Sherry Jacob-Phillips

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Australian stocks traded flat as a tech slump offset commodity gains | Instant News


* Tech stocks observe their worst day in nearly a month

* Energy stock is set for the best day in nearly six weeks

* Mining stocks hit their highest level since January 8

* NZ is set for the fourth consecutive losing session

February 23 (Reuters) – Australian stocks traded little changed on Tuesday as gains in miners and energy companies in stronger commodity prices battled losses in technology stocks following weak hints from US peers.

The S & P / ASX 200 index was almost unchanged at 6,779.5 by 0000 GMT, after swinging between positive and negative territory for most of the early part of the session.

Tech stocks were the biggest drag on the benchmarks, following losses to US peers who were under pressure from rising bond yields and concerns over higher inflation impacting the valuation.

“The continued increase in real income should reflect better growth prospects for equities but if it rises suddenly, driven higher by flows of rapid repositioning, then we think the impact of a higher discount rate will attract equities lower,” said analysts at UBS are in a note.

Buy-now-pay-later giant Afterpay slumped 7.8% causing losses among local tech firms set for their worst session since Jan.28.

Investors will be watching for any changes to the US Federal Reserve’s dovish outlook from Chairman Jerome Powell when he speaks before the Senate Banking Committee at a later date.

Energy stocks rose by up to 4.1% and were on track to post their best session since January 13, lifted by a surge in oil prices as investors anticipated a slow recovery in US crude production following cold weather in the state of Texas. Oil Search rose 8.6% after posting a surprise underlying gain.

Newcrest Mining and AngloGold Ashanti led gains among gold miners, which rose 5.6%, as concerns over rising inflation and a weak US dollar pushed the metal higher.

Stronger gold bullion and copper prices supported a more than 1% gain in the heavyweight miner, which hit the highest level since Jan. 8. Copper prices broke the $ 9,000 mark for the first time since 2011 amid indications of limited supplies.

New Zealand’s benchmark S & P / NZX 50 index fell 0.6% to 12,356.68 and is on track for a fourth straight session of decline. (Reporting by Arpit Nayak in Bengaluru; Editing by Subhranshu Sahu)

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Australian stocks slipped on technology and health care losses | Instant News


* Health care stocks fell on the company’s Australian dollar

* Miners benefit from surging copper prices

* Gold stocks rise due to rising bullion prices (Close renewal)

February 22 (Reuters) – Australian stocks closed slightly lower on Monday as losses in healthcare and technology stocks outperformed gains in miners, while Macquarie Group surged after raising its earnings guidance.

The S & P / ASX 200 closed 0.19% lower at 6,780.9, extending its decline from last week, as investors waited for companies such as Oil Search, WoolworthsGroup, Qantas Airways and Lynas Rare Earths to report their earnings results this weekend.

Shares of export-dependent healthcare companies fell 2.2% as the Australian dollar hit its highest level since early 2018 against the US dollar.

A stronger local currency weighs on corporate earnings in US dollars.

Heavy drug developer CSL Ltd and medical device maker Resmed Inc lost 2.4% and 2.2%, respectively.

Technology shares fell 1.7%, with telecom co Telstra Corp and real estate site operator REA Group down 1.5% and 2%, respectively.

Mining stocks rose 3.3% as copper prices spiked to levels not seen in nearly a decade on optimism in demand and a weak US dollar.

BHP Group and Rio Tinto rose 3.3% and 3.6% respectively, while OZ Minerals jumped 7%.

Gold stocks jumped 2% as gold prices rose on the weaker greenback.

Gold explorer De Gray Mining and Emerald Resources jumped 10.1% and 8.2%, respectively.

Macquarie Group Ltd. rose 3.4% after the company said it expects full-year profit to surge due to demand for heating caused by extreme weather in North America.

New Zealand’s benchmark S & P / NZX 50 index fell 1% to 12,426.2, weighed by losses in healthcare and utilities stocks. (Reporting by Soumyajit Saha in Bengaluru; Editing by Subhranshu Sahu)

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