There's never a dull moment on the Australian Stock Exchange. Let's go over some of the news that will shape the week to come, including overnight news from the US, initial public offerings and economic releases.
1. QBE Insurance (ASX: QBE)
QBE was placed in a trading halt last Friday and shareholders will be bracing for a Monday market update that is expected to reveal a likely downgrade to full year profits due to its North American division.
This has shocked research house Morningstar, which had assumed recovery in its US lender-placed insurance unit, after prior troubles due to both soft growth in new customers and premium declines. This unit provides insurance on troubled mortgages.
Unfortunately, this comes at a time when bullish forecasts were emerging for QBE on the basis of potentially rising US interest rates and a falling Australian dollar.
2. Westpac (ASX: WBC)
Westpac holds its AGM this Friday, 13 December at 10 am AEDT. (The live webinar may be accessed via https://www.media-server.com/m/p/hj86p92u.) The recent $1.45 billion acquisition of Lloyds Banking Group's Australian assets will likely be discussed, as will the recent decision to set up an advisory board to assess ways to match ANZ Banking Group (ASX: ANZ), which has targeted between 25% and 30% of total group revenues be sourced from Asia by 2017.
Despite receiving more than $9 million for the year, CEO Gail Kelly may well escape scrutiny as this is a slight pay cut on last year, despite steering the bank towards a record $7.1 billion profit.
3. Brambles (ASX: BXB) and 4. Amcor (ASX: AMC)
In demerger week, Brambles is spinning out its document storage division Recall into a separately listed company, while on Monday Amcor shareholders will discuss demerging the Amcor Australasia and Packaging Distribution (AAPD) business from the wider Amcor group. The rationale for demergers is that they often result in an undervalued business experiencing a re-rating and management may be more focused in terms of product portfolio and distribution.
Initial public offerings
Another raft of IPOs this week includes the following:
- Monday: Vocation (ASX: VET), a vocational education and training company, with an issue price of $2.10.
- Tuesday: Hotel Property Investments (ASX: HPI), a Real Estate Investment Trust (REIT) that owns 41 pubs that are leased to Wesfarmer's (ASX: WES)-owned Coles, with an issue price of $2.10.
- Wednesday: Affinity Education Group Ltd (ASX: AFJ), a provider of childcare services, with an issue price of $1.00 and DorsaliVi Ltd (ASX: DVL), a supplier of medical, sporting and occupational health and safety products, devices and services, with an issue price of 40 cents.
- Thursday: PM Capital Global Opportunities Fund Ltd (ASX: PGF), which invests in listed domestic and global securities, and sports an issue price of $1.00.
Economic releases
On Monday the ANZ job ads are followed by the NAB (ASX: NAB) business confidence survey on Tuesday along with both investment lending and housing finance. Then on Wednesday, the Westpac consumer confidence survey precedes the following day's job numbers.
Australia is seen in some quarters as highly dependent on the Chinese economy. So this week data releases in China commence with inflation numbers, followed by Tuesday's retail sales, fixed asset investment and industrial production figures.
