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Financial Services Roundup: Market Talk

10 Oct 2017 8:20 am

The latest Market Talks covering Financial Services. Exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0819 GMT - An afternoon rally sent Hong Kong stocks to fresh 10-year closing highs, with the Hang Seng finishing up 0.6% at 28490.83. Banks led the way late, with HSBC rising 1.4% to a 2-month best and most Chinese majors rising less than 1%. The H-share index gained 0.3%. Meanwhile, Hong Kong property stocks rallied ahead of CEO Carrie Lam's policy speech--in which farmland conversion is expected to be a topic. And Chinese developers rebounded some after yesterday's retreat. (john.wu@wsj.com)

0724 GMT - Angel Broking recommends investors subscribe to General Insurance's IPO, poised to the year's biggest debut in India. The state-run firm, seeking to raise as much as INR113.7 billion ($1.7 billion), dominates the country's reinsurer market, with 60% of gross premium accepted. For the industry, that metric is seen growing 20% annually the next 5-10 years on the back of government initiatives, distribution growth and increased awareness, notes Angel. But the broker cautions that GIC's financials may get hit by a bad monsoon, drought or flooding; the firm's total premiums last FY were 29% from the agriculture sector. The IPO opens Wednesday and will close on Friday. (debiprasad.nayak@wsj.com)

0643 GMT - OCBC's 3Q earnings may benefit from a mild rise in loans and net interest margin from a year ago, UOB KayHian says. Growth in loans will potentially be driven by the trade finance segment mainly as the exchange rate for the Chinese yuan stabilized, spurring the return in demand for US dollar-denominated trade loan facilities from Chinese companies. Residential mortgages and investment loans are also seen partly lifting OCBC's overall loans. Still, total provisions are expected to rise as non-performing loans in the oil and gas space may edge higher. OCBC is due to announce its 3Q results on Oct 26. (saurabh.chaturvedi@wsj.com; @journosaurabh)

0526 GMT - A midafternoon fade resulted in Australian stocks finishing down slightly even with a late recovery. The S&P/ASX 200 fell 1.2 points to 5738.10 after spending most of the day in a narrow 15-point range, consolidating the advance of Friday and Monday. That as most major indexes in the region logged further gains today. Energy companies and a mixed performance by the major banks capped the index today. Despite overnight strength in crude, Oil Search declined 1.8% yesterday after outperforming yesterday while Woodside slipped another 0.6%. Meanwhile, AMP rallied 3.6% on a Credit Suisse upgrade. (robb.stewart@wsj.com; @RobbMStewart)

0222 GMT - Trading volumes on the Singapore Exchange log a modest gain in September, a consolation for the lackluster fundraising activities on the bourse. The average daily value of securities traded on the Singapore Exchange platform rose 11% on year in September. The volume of derivatives contracts gained 19%, the exchange operator said late Monday. However, shares of Singapore Exchange have gained just 6.6% this year, underperforming the local benchmark index's over 14% increase. That as fundraising has been tepid and several IPOs have been pulled, including the recent cancellation of Cromwell European REIT's IPO. (gaurav.raghuvanshi@wsj.com)

0138 GMT - After pulling back from a 10-year high yesterday, Hong Kong's stock benchmark starts little changed amid scant moves in most Asian equities markets this morning. Hong Kong's Hang Seng is up 0.1% after moving back-and-forth across Monday's finishing level. Carmaker Geely falls 0.2% despite record September sales and heavyweight Tencent gains 0.6%. Meanwhile, Macau stocks remain under pressure and Chinese property developers stabilize after yesterday's slide. Expecting a change in investment preference, Morgan Stanley believes the big-4 Chinese banks, major insurers and brokerages will be the biggest beneficiaries. (john.wu@wsj.com)

0124 GMT - Portfolio-administration services provider Hub24 is headed for a FY beat if it can sustain strong inflows, reckons Ord Minnett. For the just-ended quarter, they averaged A$178 million/month, 19% more than the broker has been expecting for the year as a whole. It was also expecting net inflows to rise as the year progressed amid "the natural growth in the business and maturation of adviser relationships." The strong start to the year may underpin solid year-end funds under administration of more than A$8 billion ($6.2 billion); Ord Minnett was forecasting A$7.8 billion. Hub24 shares rise 1.2%, putting the year's pop at 59%. (david.winning@wsj.com; @dwinningWSJ)

2359 GMT - While Australian banks should reveal reasonable revenue growth this coming earnings season, Credit Suisse says some margin expansion likely to come from several rounds of increases to home-loan rates. But Canberra's new tax on big banks' liabilities may offset some of that. The investment bank anticipates results to also reflect a continuation of low, and stable, bad-debt charges and generally stronger capital ratios. (robb.stewart@wsj.com; @RobbMStewart)

2341 GMT - AMP's roughly 10% underperformance of the wider market the past 2 months since 1H's report has lifted the valuation appeal for Credit Suisse, which upgrades the wealth manager to outperform. The investment bank supports AMP's strategy to invest for future growth and believes investors are ascribing little value to success. While there's been disappointment about share buybacks being suspended, Credit Suisse pegs shares at a 15% discount to listed peers. AMP climbs 2.8%, cutting the year's drop to 2.3%. (robb.stewart@wsj.com; @RobbMStewart)

2324 GMT - Morgan Stanley can see another headwind for Australian mortgage growth next year. Its survey of such borrowers suggests the average loan-to-income ratio is about 5, with ANZ's customers at the high end. Morgan Stanley sees reason for concern given regulators are increasingly worried about growth in household debt and have indicated LTI ratios should become part of underwriting criteria. The investment bank also notes NAB recently capped LTI at 8 for new Australian mortgages. (robb.stewart@wsj.com; @RobbMStewart)

2319 GMT - Investors appear to be anticipating premium insurance rates will firm, but Deutsche Bank is waiting for evidence of wide-scale improvement before dropping its bearish call on QBE Insurance. Its analysis since 1970 suggests limited correlation between large natural disasters and subsequent widespread repricing. Hurricanes and earthquakes this year position 2017 as one of the costliest years for insurers. That will weigh on QBE's earnings, and Deutsche Bank anticipates that will cap 2H's dividend. (robb.stewart@wsj.com; @RobbMStewart)

2235 GMT [Dow Jones] -- Australia's government is considering a new "last resort" power to address worries about foreign investment in infrastructure assets such as energy, ports and communications. Attorney-General George Brandis says the government is seeking views on a legislative package to manage national security risks from foreign involvement in critical infrastructure, such as sabotage, espionage and coercion. New powers would allow government to issue a direction to an owner or operator of a critical infrastructure asset to address and mitigate a significant national security risk. The government will also set up a register to list who owns, controls and has access to, critical infrastructure assets. (rob.taylor@wsj.com)

(END) Dow Jones Newswires

October 10, 2017 04:20 ET (08:20 GMT)

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