1. What are the implications of ‘Open Banking’ for the big 4 banks?Obviously a good thing for consumers but does it have the potential to make drastic changes to their bottom line?
There are some, mainly the Fintech promoters, who argue that ‘Open Banking’ will have a huge impact on the industry. Others, like me who have been around a little longer and know just how difficult it is to stir consumers out of their slumber and the inertia to change, think it will have little impact.
It can’t be a bad thing for either consumers or new banking/Fintech aspirants, But I just can’t see it being the “make or break” when it comes to consumers being prepared to consider financial services from other providers.
Despite the hype, I don’t think the major banks are that concerned. As an investor in the major banks, I would rate “open banking” right down the bottom of the list in terms of risks to consider.
2. What do you think about the Macquarie Bank Capital Notes 2 Securityholder Offer?
The Macquarie Bank Capital 2 Notes offer was very well received in the professional market, with institutions/financial planners bidding for more than $500m. The margin has been set at 4.7%.
However, this issue came after a huge rally in hybrid securities in April. There were bargains galore to be had on the ASX – margins over 6% were available.
Chris Joye from Coolabah Capital Investments, one of the smartest guys in the fixed interest market, likes the issue and is investing. I think the rate is attractive but I am not overly excited. given the historic relationship between bank hybrid securities and bank ordinary shares.
Hybrid securities are complex. As the old adage goes: never invest in something you do not understand. The securityholder offer closes next Friday, 29 May.
3. What about theIncitec Pivot’s (IPL) share purchase plan (SPP)?
Incitec Pivot’s SPP doesn’t close until 9 June, three weeks away! Think I might reserve judgement. However, with the shares trading on the ASX at a price less than the institutions paid, I would be inclined to be a little cautious.
4. Do you have a view of QBE at current prices? Is it cheap?
I have difficulty understanding why insurance companies are so much on the nose. QBE certainly is, with its price below the capital raising price of $8.25. I guess I am more inclined to be a buyer but I am not seeing any signs of sentiment turning around. According to FN Arena, the broker consensus target price is $11.37, 47% higher than where it closed yesterday.
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