Stocks’ Details

Suncorp Group Limited (ASX:SUN)

Strong reinsurance protections - Suncorp Group Limited provides general insurance, banking and life insurance and superannuation products and related services to the retail, corporate and commercial sectors.Recently, Suncorp welcomed Brisbane City Council’s Flood Resilient Homes Program to help homeowners better to protect themselves and their properties from flooding. The Group has confirmed that it will reward mitigation methods, through its award-winning Cyclone Resilience Benefit and will evaluate home improvements under the Flood Resilient Homes Program and adjust insurance premiums accordingly after consultation with the homeowners. Suncorp has a long-term partnership and is an active member of the Queensland Flood Community of Practice, which has produced Water Futures, a shared vision for a more flood and drought resilient South East Queensland.


Trend of Gross Impaired loans in segment-wise manner (Source: Company Reports)

The Group will release its financials for the year ended 30 June 2018 on the 9th of August 2018. The Group continues to focus on making it easier, simpler, and faster for customers so that their financial needs are met. The Group has continued to build stronger relationships with its intermediary network. These positive reforms, coupled with the marketplace initiatives being launched and Banking & Wealth’s frequent interaction with customers, places the Group in a position to help its customers and communities achieve their financial goals. Meanwhile, the stock price has been up since the start of the year by 5.63 per cent as on 04 July 2018. The stock was up by 1.16 per cent as on 05 July 2018 due to positive sentiments in the market.We maintain our “Hold” recommendation on the stock at the current market price of $14.80.
 

Westpac Banking Corporation (ASX:WBC)

Redemption of Westpac Subordinated Notes II- Westpac is Australia's first financial entity to start a service revolution and is the first bank and oldest amongst the big four major banking organisations in Australia. WBC has reviewed more than 300 products and has made over 150 changes to its products, policies, and business practices, including introducing a low rate credit card, removing sales incentives for tellers, and providing an independent advocate for its customers. The Group declared a dividend of 94 cents, per ordinary share, fully franked and represents a pay-out of 75 per cent with a dividend yield of 6.4 per cent. Recently, it announced that it will redeem all of its Westpac Subordinated Notes II (WSN II) (representing 9,252,850 WSN II at $100 each) on their first optional redemption date of 22 August 2018, in accordance with the WSN II Conditions and the last date of trading in WSN II on ASX will be 10 August 2018.


Net Interest Margin Movement (Source: Company Reports)

On 22 August 2018, each holder of WSN II will be paid the face value of $100 with a final interest payment of $1.07002 for each WSN II held on 14 August 2018. It is expected that the Reserve Bank is likely to keep rates on hold for some time. For Australian economy, momentum will weigh on commodity prices and for banks, mortgage scenario will play a key role. WBC expects to benefit from the scenario in the long-run. It has launched a number of new digital initiatives that make it easier for customers to manage their money. The stock has risen about 5% in last one month and was up by 1 per cent on 5 July 2018. We give a “Buy” recommendation at the current market price of $29.53 as the Group is targeting similar productivity savings as it witnessed in 1HFY18.
 

Qantas Airways Limited (ASX:QAN)

Improvement in Volume Growth- Qantas Airways is Australia’s largest airline, providing domestic and regional flights in Australia and New Zealand, and it manages international passenger and freight services to and from Australia. Lately, one of its Directors, Belinda Jane Hutchinson acquired 16,200 ordinary shares at an issue price of $6.1700 per ordinary share from the market. The Group’s Chairman Leigh Clifford will step down from the national carrier in October 2018, after 11 years in the role. Further, the Group recently cancelled 91,17,409 shares under the buy-back event. In addition, the company focuses on to increasing its Sydney-Noumea service from three to four times weekly which will be effective from 12 December 2018 by using its Boeing 737-800 aircraft. These recent additions will boost the number of flyers resulting in top-line growth in years to come.


Disciplined Allocation of Capital to Increase Shareholder value (Source: Company Reports)

It was worth noting that Total Revenue Per Available Seat Mile (ASM) improved by 3.4 per centto AUD0.180 in 1HFY18 as compared to the prior corresponding period (pcp). The Current Ratio improved from 0.44x to 0.47x and Debt-Equity Ratio improved from 1.37x to 1.31x in 1HFY18 as compared to previous six months. The company seems to be benefitting from rising demand of passengers across the globe coupled with a healthy balance sheet, high return ratio, and a strong footprint in the domestic and international market, renewed codeshare deal with Air France and synergistic deal with Air New Zealand. In the last five days, the stock was up by 1.30 per cent as on 4 July 2018 and was up by 2 per cent on 5 July 2018. We give a “Buy” recommendation at the current market price of $6.37 by looking at the revenue growth and the recent additions which the Company has made that have resulted in volume growth.

 
Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.