Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,626,679 (+0.44%)       Melbourne $992,456 (-0.10%)       Brisbane $968,463 (-0.68%)       Adelaide $889,622 (+1.18%)       Perth $857,092 (+0.57%)       Hobart $754,345 (-0.49%)       Darwin $661,223 (-0.49%)       Canberra $1,005,502 (-0.28%)       National $1,046,021 (+0.17%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $747,713 (-0.42%)       Melbourne $496,441 (+0.20%)       Brisbane $533,621 (+0.58%)       Adelaide $444,970 (-1.69%)       Perth $447,364 (+2.63%)       Hobart $527,592 (+1.28%)       Darwin $348,895 (-0.64%)       Canberra $508,328 (+4.40%)       National $529,453 (+0.63%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,090 (+30)       Melbourne 14,817 (-21)       Brisbane 7,885 (-45)       Adelaide 2,436 (-38)       Perth 6,371 (-16)       Hobart 1,340 (-9)       Darwin 235 (-2)       Canberra 961 (-27)       National 44,135 (-128)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,781 (+13)       Melbourne 8,195 (-49)       Brisbane 1,592 (-18)       Adelaide 423 (-4)       Perth 1,645 (+13)       Hobart 206 (+7)       Darwin 401 (+2)       Canberra 990 (+1)       National 22,233 (-35)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $800 ($0)       Melbourne $600 ($0)       Brisbane $640 ($0)       Adelaide $600 ($0)       Perth $650 ($0)       Hobart $550 ($0)       Darwin $700 ($0)       Canberra $690 (+$10)       National $662 (+$1)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $760 (+$10)       Melbourne $580 (-$5)       Brisbane $630 (-$5)       Adelaide $495 ($0)       Perth $600 ($0)       Hobart $450 ($0)       Darwin $550 ($0)       Canberra $570 ($0)       National $592 (+$1)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,419 (-30)       Melbourne 5,543 (+77)       Brisbane 3,938 (+95)       Adelaide 1,333 (+21)       Perth 2,147 (-8)       Hobart 388 (-10)       Darwin 99 (-3)       Canberra 582 (+3)       National 19,449 (+145)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,008 (+239)       Melbourne 4,950 (+135)       Brisbane 2,133 (+62)       Adelaide 376 (+20)       Perth 650 (+6)       Hobart 133 (-4)       Darwin 171 (-1)       Canberra 579 (+4)       National 17,000 (+461)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.56% (↓)     Melbourne 3.14% (↑)      Brisbane 3.44% (↑)        Adelaide 3.51% (↓)       Perth 3.94% (↓)     Hobart 3.79% (↑)      Darwin 5.50% (↑)      Canberra 3.57% (↑)      National 3.29% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.29% (↑)        Melbourne 6.08% (↓)       Brisbane 6.14% (↓)     Adelaide 5.78% (↑)        Perth 6.97% (↓)       Hobart 4.44% (↓)     Darwin 8.20% (↑)        Canberra 5.83% (↓)       National 5.82% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 31.1 (↑)      Melbourne 33.3 (↑)      Brisbane 32.4 (↑)      Adelaide 26.5 (↑)      Perth 36.1 (↑)      Hobart 32.7 (↑)        Darwin 33.3 (↓)     Canberra 32.4 (↑)      National 32.2 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 31.7 (↑)      Melbourne 32.1 (↑)      Brisbane 31.5 (↑)        Adelaide 23.9 (↓)     Perth 41.0 (↑)        Hobart 34.0 (↓)       Darwin 44.6 (↓)     Canberra 43.1 (↑)      National 35.3 (↑)            
Share Button

Investors Were Burned by European Banks for Years—Until Now

Shares in European banks such as UniCredit have been on a tear

Tue, May 7, 2024 8:00amGrey Clock 4 min

After years in the doldrums, European banks have cleaned up their balance sheets, cut costs and started earning more on loans.

The result: Stock prices have surged and lenders are preparing to hand back some $130 billion to shareholders this year. Even dealmaking within the sector, long a taboo topic, is back, with BBVA of Spain resurrecting an approach for smaller rival Sabadell .

The resurgence is enriching a small group of hedge funds and others who started building contrarian bets on European lenders when they were out of favour. Beneficiaries include hedge-fund firms such as Basswood Capital Management and so-called value investors such as Pzena Investment Management and Smead Capital Management.

It is also bringing in new investors, enticed by still-depressed share prices and promising payouts.

“There’s still a lot of juice left to squeeze,” said Bennett Lindenbaum, co-founder of Basswood, a hedge-fund firm based in New York that focuses on the financial sector.

Basswood began accumulating positions around 2018. European banks were plagued by issues including political turmoil in Italy and money-laundering scandals . Meanwhile, negative interest rates had hammered profits.

Still, Basswood’s team figured valuations were cheap, lenders had shored up capital and interest rates wouldn’t stay negative forever. The firm set up a European office and scooped up stock in banks such as Deutsche Bank , UniCredit and BNP Paribas .

Fast forward to 2024, and European banking stocks are largely beating big U.S. banks this year. Shares in many, such as Germany’s largest lender Deutsche Bank , have hit multiyear highs .

A long-only version of Basswood’s European banks and financials strategy—which doesn’t bet on stocks falling—has returned approximately 18% on an annualised basis since it was launched in 2021, before fees and expenses, Lindenbaum said.

The industry’s turnaround reflects years spent cutting costs and jettisoning bad loans, plus tougher operating rules that lifted capital levels. That meant banks were primed to profit when benchmark interest rates turned positive in 2022.

On a key measure of profitability, return on equity, the continent’s 20 largest banks overtook U.S. counterparts last year for the first time in more than a decade, Deutsche Bank analysts say.

Reflecting their improved health, European banks could spend almost as much as 120 billion euros, or nearly $130 billion, on dividends and share buybacks this year, according to Bank of America analysts.

If bank mergers pick up, that could mean takeover offers at big premiums for investors in smaller lenders. European banks were so weak for so long, dealmaking stalled. Acquisitive larger banks like BBVA could reap the rewards of greater scale and cost efficiencies, assuming they don’t overpay.

“European banks, in general, are cheaper, better capitalised, more profitable and more shareholder friendly than they have been in many years. It’s not surprising there’s a lot of new investor interest in identifying the winners in the sector,” said Gustav Moss, a partner at the activist investor Cevian Capital, which has backed institutions including UBS .

As central banks move to cut interest rates, bumper profits could recede, but policy rates aren’t likely to return to the negative levels banks endured for almost a decade. Stock prices remain modest too, with most far below the book value of their assets.

Among the biggest winners are investors in UniCredit . Shares in the Italian lender have more than quadrupled since Andrea Orcel became chief executive in 2021, reaching their highest levels in more than a decade.

Under the former UBS banker, UniCredit has boosted earnings and started handing large sums back to shareholders , after convincing the European Central Bank the business was strong enough to make large payouts.

Orcel said European banks are increasingly attracting investors like hedge funds with a long-term view, and with more varied portfolios, like pension funds.

He said that investor-relations staff initially advised him that visiting U.S. investors was important to build relationships—but wasn’t likely to bear fruit, given how they viewed European banks. “Now Americans ask you for meetings,” Orcel said.

UniCredit is the second-largest position in Phoenix-based Smead Capital’s $126 million international value fund. It started investing in August 2022, when UniCredit shares traded around €10. They now trade at about €35.

Cole Smead , the firm’s chief executive, said the stock has further to run, partly because UniCredit can now consider buying rivals on the cheap.

Sentiment has shifted so much that for some investors, who figure the biggest profits are to be made betting against the consensus, it might even be time to pull back. A recent Bank of America survey found regional investors had warmed to European banks, with 52% of respondents judging the sector attractive.

And while bets on banks are now paying off, trying to bottom-fish in European banking stocks has burned plenty of investors over the past decade. Investments have tied up money that could have made far greater returns elsewhere.

Deutsche Bank, for instance, underwent years of scandals and big losses before stabilising under Chief Executive Christian Sewing . Rewarding shareholders, he said, is now the bank’s priority.

U.S. private-equity firm Cerberus Capital Management built stakes in Deutsche Bank and domestic rival Commerzbank in 2017, only to sell a chunk when shares were down in 2022. The investor struggled to make changes at Commerzbank.

A Cerberus spokesman said it remains “bullish and committed to the sector,” with bank investments in Poland and France. It retains shares in both Deutsche and Commerzbank, and is an investor in another German lender, the unlisted Hamburg Commercial Bank.

Similarly, Capital Group also invested in both Deutsche Bank and Commerzbank, only to sell roughly 5% stakes in both banks in 2022—at far below where they now trade. Last month, Capital Group disclosed buying shares again in Deutsche Bank, lifting its holding above 3%. A spokeswoman declined to comment.

U.S.-based Pzena, which manages some $64 billion in assets, has backed banks such as UBS and U.K.-listed HSBC , NatWest and Barclays .

Pzena reckoned balance sheets, capital positions and profitability would all eventually improve, either through higher interest rates or as business models shifted. Still, some changes took longer than expected. “I don’t think anyone would have thought the ECB would keep rates negative for eight or nine years,” said portfolio manager Miklos Vasarhelyi.

Some Pzena investments date as far back as 2009 and 2010, Vasarhelyi said. “We’ve been waiting for this to turn for a long time.”


This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
How cost of living pressures are impacting the health of Australians
By Bronwyn Allen 09/05/2024
Duolingo Shares Swoon Despite Strong Earnings
By ERIC J. SAVITZ 09/05/2024
Why It Pays to Start Companies in Recessions
By LISA WARD 06/05/2024
How cost of living pressures are impacting the health of Australians

Money worries are having a cascading effect on stress levels, conflict and even the rate of ageing

By Bronwyn Allen
Thu, May 9, 2024 3 min

Worrying about the cost of living is causing accelerated ageing, household arguments and creating significant stress, according to new research. More than half of Australians say they have experienced personal setbacks due to financial strain over the past year. Almost 20 percent say that have suffered a stress-related illness, 33 percent have lost sleep and almost one in five are seeing signs of early ageing.

Household hostility is also rising, with 19 percent of Australians admitting they have argued with their partners about money, and a further one in 10 have argued with family and friends.

The Finder survey of 1,070 Australians reveals women are bearing the brunt of financial stress, with 62 percent reporting they have worried about money compared to 42 percent of men.

Younger Australians are struggling the most, with almost 7 in 10 Gen Z respondents reporting financial strain compared to 58 percent of Gen Xers and 24 percent of baby boomers.

The impact of cost-of-living pressures among different age groups and income levels is reflected in new data from the Australian Bureau of Statistics (ABS). The selected living cost indexes show employee households are under more strain from inflation, with the CPI measure for this population group at 6.5 percent today compared to the official overall CPI figure of just 3.6 percent.

The discrepancy is due to higher mortgage interest payments – which make up a higher proportion of expenditure for employee households — as well as an increase in primary and secondary school fees, and the indexation of tertiary education fees at the start of the year. The official CPI does not include mortgage payments, so the living cost indexes provide a more accurate picture of how rising interest rates are impacting households with mortgages today.

The inflation rate is much lower for older Australians, who have often paid off their mortgages. The inflation rate on living expenses for age pensioner households is below the official CPI level at 3.3 percent, and it’s only slightly higher at 3.4 percent for self-funded retirees.

Graham Cooke, head of consumer research at Finder, said that despite cooling inflation, Australians were still under significant financial pressure.

This can be seen in Finders Cost of Living Pressure Gauge, which has been hovering in the extreme range for the past year and a half, Mr Cooke said. The gauge returned a reading of 78 percent in March this year compared to 47 percent in March 2021, when inflation was 1.1 percent and the Reserve Bank’s official cash rate was 0.1 percent.

Interestingly, Australians’ cash savings are higher today than they were in 2021, likely reflecting stimulus payments received and saved during the pandemic. The Reserve Bank has cited pandemic savings as a factor in keeping mortgage arrears low despite much higher interest rates. The Finder research shows Australians have an average of $37,206 in cash savings today, up from $24,928 two years ago.

Money concerns can cause problems in your everyday life and snowball quickly if you don’t get them under control,” Mr Cooke said. Building financial resilience is as vital as ever as costs continue to rise. Pay close attention to where your money is going so you keep impulse spending to a minimum, and don’t overspend.

Australians appear to be heeding this advice, with the latest ABS retail figures showing seven straight quarters of declining per capita spending. “Per capita volumes show retail turnover after the effects of inflation and population growth have been accounted for,” explained Ben Dorber, ABS head of retail statistics. “Following an unprecedented seven straight falls, it is very clear how much consumers have pulled back on spending in response to cost of living pressures over the past two years.

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Related Stories
Less Is More: The Case for ‘Slow Productivity’ at Work
The Great Wealth Transfer: How rich millennials will invest the billions coming their way
By Bronwyn Allen 01/03/2024
Build Your Own Rolls-Royce: Inside the Arcadia Droptail Roadster, the Latest From the Company’s Coachbuild Operation
By Jim Motavalli 06/03/2024
    Your Cart
    Your cart is emptyReturn to Shop