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NEWS - FINANCE
RBA to raise rates; inflation too high
The Reserve bank of Australia, which increased interest rates last week, warned on Monday there will be more rate rises in months ahead as it battles consumer price gains that are "uncomfortably high".
RBA raises rates to 6.50pc
The Reserve Bank of Australia raised interest rates on Wednesday by a quarter of a percentage point to an 11-year high of 6.50 per cent.
RBA leaves rates unchanged at 6.25%
The Reserve Bank of Australia (RBA) has left official interest rates steady at 6.25 per cent.
RBA leaves interest rates at 6.25pc
The Reserve Bank has decided to leave official interest rates at 6.25 per cent, as widely expected by economists.
RBA ups rates for third time this year
Home buyers and businesses will have to tighten their belts another notch after the central bank hiked rates for the third time this year.
Defiant RBA tightens screws
The Reserve Bank of Australia, defying pleas from industry and many nervous federal government politicians, raised official interest rates on Wednesday to a five-year high in its first credit tightening in 14 months.
The new mortgage game
Shopping for a home loan has never been easy, but aggressive discounting and a rush of new products are giving borrowers more bargaining power to seek out the right mortgage.
RBA sounds warning on interest rates
The Reserve Bank of Australia has put the possibility of interest rate rises back on the agenda, warning another rise in oil prices and the "acute" shortage of workers could push inflation into the danger zone.
RBA leaves rates unchanged again
The Reserve Bank of Australia, in a widely anticipated decision, left official interest rates unchanged on Wednesday for a third consecutive month amid continuing signs that the economy has slowed to a sub-par pace.
Mortgage tricks
It sounds incredibly cheap. A mortgage with a home loan rate below 6 per cent, an absolute bargain at a time when financial markets expect the Reserve Bank to increase interest rates again this year.
Defiant RBA raises rates
The Reserve Bank of Australia, defying market and political grumbling, lifted its benchmark interest rate for the first time in 15 months on Wednesday in a bid to head off inflation pressures and gave no indication that this would be a one-off move.
Tame CPI eases interest rate fears
Australia's inflation rate came in at the bottom end of market expectations in the September quarter, further reducing the odds of a rise in official interest rates any time soon.
Net accounts worth a look
High interest-bearing online saving accounts are becoming attractive at-call investments. It is not uncommon to find internet-based accounts delivering an interest rate above 5per cent, and fierce competition for deposits is keeping the pressure on financial institutions.
Accountants can only go so far unlicensed
Accountants recently received some relief from a Financial Services Reform Act requirement that they must be licensed before recommending clients establish or close self-managed superannuation funds.
Twenty ways to stay ahead of the game
Here are twenty rules that should help stop investors losing significant sums of capital.
Be careful with bank accounts
Australians paid almost $8 billion last year in bank fees, so it pays to make sure you're getting the best deal. And there's no better time to shop around: banks and other financial institutions are falling over themselves to offer low fees on transaction accounts and high rates on your savings. Even the mortgage can be finetuned to power up repayments and bring down your household's debt.
Buy or lease, depends if the technology fits
Small-business owners who still believe the technology needs of their business can be met without much expense - by buying outright a clutch of the latest personal computers - should consider the case of a tender for the Australian Electoral Commission.
Alternatives come alive
Twenty to 25 years ago, commodity funds were at the cutting edge for the smart investor. And so was the trading of commodity futures markets.
Business lending up but it could spell trouble
Business lending increased strongly over the past year, but it's too early to say the small business sector is thriving.
Row over fund fees disclosure
A push for greater disclosure of fees charged by the $240 billion retail superannuation and fund management sector has been slammed as inadequate and unenforceable.
The power of gearing
Gearing is one of the strategies most widely used by investors. It's driving the residential property investment boom. It's the foundation of margin loan investing in shares, including the sophisticated investor set's present favourite, protected equity lending.
Index funds: making more for less
As another financial year of substandard returns draws to a close, with many fund managers delivering negative returns over the full year, disillusioned investors are looking around for alternatives.
Independent advisers stage a comeback
Independent investment banking is undergoing a renaissance in Australia.
After a hiatus in the 1990s when the lumbering giants of America and Europe emerged dominant in the Australian landscape, the business of independent advice is back - and it's booming.
Chicken and egg of raising capital for growth
There seems to be a market consensus that capital is hard to come by for small businesses. Funding for fast-growing small- to medium-sized enterprises (SMEs) can be difficult to obtain, and choices can affect who controls a business.
ASIC boosts protection for investors
Financial planners and stockbrokers face losing their licences under tough new rules if they don't investigate the financial needs of their retail clients before providing advice.
Debt relief lowers bankruptcy figures
Consumers who get into trouble paying their debts are making greater use of low-cost debt agreements rather than opting for bankruptcy.
Card users ditch loyalty for low rates
Many credit card users, faced with increasing fees and high interest rates, are taking revenge on the major banks by turning to the wide range of new cards on the market.
Mortgage lenders embrace partnerships
The limitations of using mobile lenders is forcing mortgage originators to recruit owner operators to run rapidly growing branch networks.
Banks face off on credit cards
Commonwealth Bank and ANZ Banking Group are locked in a bitter battle for co-branded credit card customers, as the major banks scramble for greater market share after the Reserve Bank's reforms to the credit card system.
RBA: household debt risk to economy
Reserve Bank of Australia governor Ian Macfarlane has warned that many Australians were overconfident about their finances and had too much debt for the "inevitable" bad times.
Exports and housing to dent growth
The slowdown in the Australian economy is occurring faster than expected, with global weakness cutting into exports as the housing sector comes off the boil.
Investors hit by 11pc increase in fees
Global fund managers have increased fees by up to 11 per cent over the past three years to offset an unprecedented decline in revenue, reversing a trend that had seen fees fall steadily over the previous decade.
Financial Planners slammed by ACA and ASIC
Big news this week was the Australian Securities and Investments Commission (ASIC) and the Australian Consumers' Association (ACA) releasing their joint survey on the quality of advice provided by financial planners.
It's yield v price in fixed income assets
When it comes to investing in fixed income assets, the relationship between yield and price can be confusing and one of the more difficult things to explain. But if the rental income on a property stays the same and the property price takes a dive, it can be easier to understand that the yield of that property has just gone up.
Reduced charges a bonus for investors
Five of the country's major listed property trusts have cut their management fees, in a big win for investors.
Avoid the debt trap by saving
Put that credit card away, think again if you're about to sign your life away for that gorgeous car, and reconsider taking an overseas holiday. Because if you're like most 20-somethings, two things stand in your path to prosperity - an over-ambitious lifestyle and the borrowing that funds it.
High bank fees turn off small business
When antique dealer Robert Wallace rang up his old bank to sort out finance details for importing antiques for his $1 million-plus-a-year business, all he got was an operator at a call centre.
PM's early warning on budget
A budget strategy for 2003-04 built on no new spending outside the areas of defence and security has been formally endorsed by the federal government's most senior ministers.
Dividends: best payers
Australia's top 200 stocks are delivering dividend yields not seen since the early 1990s. This shift coincides with a renewed focus on dividend yields as investors seek secure returns in a market where capital growth is far from guaranteed.
Advisers are right on the money
Businesses that want to save money on their lending arrangements are turning to advisory services that review their facilities against market benchmarks and renegotiate better terms on their behalf or at least, show them how to do it themselves.
A guide to beating the bears
The big bad bear roaming global sharemarkets appears to be in no great hurry to return to its cave. Over the past week, US and European bourses plunged to fresh multi-year lows, investors turned their attention to selling bank shares and the Australian sharemarket slid to near two-year lows.
Investors bond with safety
Bonds may be boring, but as equity markets continue their downward spiral more and more investors have been attracted to the unsexy but safe appeal of fixed-interest securities.
Secret strategies for managed funds
The best way to harness the power of managed funds is not to chase the strongest performers but to use the same strategies routinely applied by professional investors and the top advisers.
Auditors face tough regime as APRA attacks
The main finance industry regulator yesterday attacked auditors for failing to enforce laws as the Federal Government prepares to announce tough new measures designed to encourage separation of audit services in big accounting firms.
Businesses doubt card reform benefits
The small business community is taking a "wait and see" attitude to the changes in credit card regulation. And while they are hoping they will benefit from lower costs, they have yet to be convinced they are among the winners in this latest show of banking reform.
RBA hits banks on credit card fees
In a boon for Australia's large retailers, hidden fees charged by banks for credit card transactions are expected to fall by around 40 per cent, starting from July 1, 2003, the Reserve Bank of Australia said on Tuesday.
Women's business
Attention female investors: financial institutions have rediscovered women as a target market, and they are ready to woo you with products, services and seminars tailored to the needs, and the minds, of women.
New code to lift standards
The launch of a new code of banking practice this morning will raise the bar of self-regulation by placing greater emphasis on banks to provide more information to customers about fees and charges.
Tax bonanza on home loans
Investors will be able to make their mortgage tax effective and pay it off faster while building wealth through an investment, under a watershed court ruling.
Choosing a broker
Choosing a broker is like choosing a new suit. They come in different styles, vary in quality and some fit better than others.
Online trading costs are showing net rise
For years, investors have enjoyed attractive fees for online share trading, but depressed trading volumes and weak equity markets may prompt more internet brokers to raise fees, if the latest move by Westpac Broking is anything to go by.
Share investing: back to basics
Stockmarkets have been well and truly gouged by the bearish sentiment sweeping global markets, and investors are watching the value of their portfolios diminish day by day.
RBA links credit card, Eftpos reform
The Reserve Bank of Australia has opted for a "big bang" approach to reforming the payments system by deregulating credit cards and Eftpos at the same time, rather than initially focusing on credit cards.
RBA opens door to private paper
The Reserve Bank will drop its historical aversion to holding private bank securities in an attempt to ensure there is enough liquidity in the payments system to meet new foreign exchange settlement rules.
Private equity
Savvy investors who know that stockmarket turbulence is a fact of life are looking at more attractive "alternative" areas of investment. One of these is private equity - interesting because of its diversification, different perspective and returns.
RBA in new attack on bank fees
The Australian banking industry faces a fresh squeeze on lucrative revenues, with a push led by the Reserve Bank of Australia to radically shake up the fee structure of the Eftpos debit card system.
Debt can increase your wealth
Interest rates are on the way up, making now the ideal time for investors to assess their level of debt. In particular, they should be looking for ways to replace inefficient debt with efficient, tax- deductible debt that can help them build wealth more quickly. Official interest rates went up by 0.25 percentage points in May and the same again in June, and another rate rise is on the cards next week, causing big repayment problems for those highly geared with their home loans.
What's a good investment?
One of the most successful managers over the past decade, Colonial First State, loves the infrastructure sector. It owns 30 per cent of the issued capital of Hills Motorway, 20 per cent of Transurban Group, 16 of Macquarie Infrastructure Group and 15 per cent of Auckland International Airport.
How to navigate the pension money streams
The investment industry has lobbied hard for the introduction of growth pensions to help retirees qualify for social security and tax concessions without jeopardising the quality of their investments.
How to make money when shares go down
Anyone can try to make money by picking a share and hoping that it will increase in price. Savvy investors try to make money even when they expect certain shares to remain static or even decline in price, through an increasingly popular market strategy known as "buy and write".
Banks revamp loyalty programs
The collapse of Ansett, looming interventions by regulators and a saturated market are driving the most profound restructuring of the Australian payment card industry in a decade.
Planners must now show licence
The laws dictating the way in which financial planners are required to deal with their clients underwent an important change recently with the introduction of the Financial Services Reform Act.
Tips and traps about options
One of the biggest mistakes that most executives make about share option plans is failing to pay tax upfront where the likely outcome is a clear tax benefit. The reason they do this - apart, perhaps, from not having the money to pay the tax - is that many don't place an appropriate value on the benefit or consider the options to be worth anything until they are exercised. Others just don't like the idea of paying tax upfront.
Cash-flow finance best option for SMEs
The demand for cash-flow financing among small businesses is growing at more than 25 per cent a year as the small and medium enterprise sector goes through a funding transformation.
To sell or hold shares?
Australia has quietly tiptoed to the top of the world rankings, slipping past the heavyweights of Europe, North America and Asia. But a quiet revolution is something to be prized, because the last word you want to hear is "bubble".
Bond investments change as criticism grows
Last month, the biggest and most influential asset consultant, William M Mercer, sent a statement to the press which must have sent cold shivers down the spine of every active bond manager in the country.
Limit your exposure with long term strategy
Don't speculate with emerging markets; treat them as a strategic investment. This means allocating a proportion of your long-term investment funds to the sector and keeping it there.
Tips for managing bad debt
The first and most important thing about managing bad debts is not to get them in the first instance. There is a view that prevails that the availability of credit today is a right. It is not.
How to choose the best credit card
Credit cards are big business for Australian financial institutions. The four major Australian banks alone make roughly $380 million in profit each year by allowing customers the convenience of purchase by plastic.
How to rate the credit rating
Various features need to be considered when assessing higher-yielding income investments. An important one is whether an investment has a credit rating. As the table on page 32 shows, a significant proportion of high-yielding income investments are unrated. What does this say about them?
Investors need to analyse new floats carefully
Aided by a national advertising campaign featuring the motor racing identity, Dick Johnson, Australian Magnesium Corp recently managed to attract more than 22,000 new investors to support its ambition of becoming the world's largest magnesium producer.
Tailor your own portfolio
The concepts of long-term investing and the strategies to implement them are relatively straightforward in theory but while some may appear obvious, other factors come into play - such as being disciplined and having the courage to pursue a strategy when things may not favour it. Here are 10 of the more important concepts and strategies to keep in mind.
Credit card reforms to hit profits
Banking analysts are looking at downgrading their profit forecasts for the major banks, saying the overhaul of pricing practices in the credit card market will eat into earnings from 2003.
How to choose the right car finance
Even a casual glance through the motoring sections of the weekend newspapers reveals a vast array of financing options, ranging from interest-free periods to equal, annual interest-free instalments.
New rules strengthen analysts impartiality
The barriers between research and trading activities within broking firms and investment banks will be heightened by increased industry self-regulation under guidelines, which were announced yesterday.
How to invest overseas
With the turmoil in the financial markets world wide, there are certain facts you need to appreciate about investing in international shares and why the smart money is sticking with a global strategy. First, while it may be difficult to accept right now, risk diversification and management should still be a major reason for investing globally.
Caution: note tax on foreign investments
If you are a direct investor or if you choose the managed-funds route, international investments are susceptible to certain tax rules that need to be carefully considered before any decisions are made. For example, the negative gearing allowed by the relaxation since July 1 of the foreign income rules relating to borrowed funds used to buy international investments doesn't apply if the investments pay little or no income, as is the case with many major American companies.
Does your fund manager have it right?
Your superannuation fund or unit trust sends out an annual statement telling you it has returned 8.5 per cent a year for the past five years. It's hard to tell, from this number alone, whether that's a return you should be satisfied with.
St George offers online funds
St George Bank yesterday announced it would expand its internet-based banking business, dragondirect, to include managed funds. Customers of dragondirect will now have a choice of two funds, with no entry or exit fees.
Leasing can still pay off
Small- to medium-sized businesses have many options when it comes to buying company assets. But paying up front is rarely one of the better choices as it ties up business capital unnecessarily. The options are leasing, commercial hire purchase or rentals.
ASIC ruling hits dual listings
Australian corporations seeking global mergers through dual-listed company (DLC) structures could be forced to slash billions of dollars from their future profits under guidelines revealed yesterday by the corporate regulator.
Fund managers tighten belts
The falls on global share markets are taking their toll on the local funds management industry, with several high-profile companies now slashing costs.
Protection for the Landlord
It's every landlord's worst nightmare: a property left in such a state by tenants that it can't be let out again without substantial and costly repairs.
Do your homework to save time and money
If you're the kind of consumer who likes to shop around for the right product at the best price, you'll need to do your homework before settling on a financial adviser.
What to do when you're not happy with a paid adviser
Financial planners are there to help you sort out your finances - not to clean them out. But sometimes you may think your financial planner is not delivering the goods. If you have a complaint against your financial planner there is a standard course of action you can take.
Less than full disclosure
Mr Joe Hockey, the Minister for Financial Services recently negotiated the final amendments to the Financial Services Reform Bill.
Before accepting company share plans
Share plans are growing in popularity as more employers look for innovative and meaningful ways to provide employees with more than just cash-in-hand, or a laptop computer, or a car.
Salary packaging
It comes as no surprise that the fringe benefits tax and the goods and services tax have conspired to kill the practice of salary packing. It would appear that reports of the death of this particular employee benefit have been exaggerated.
Insurers asked to explain rises
The national competition watchdog has given insurance companies two weeks to explain substantial increases in premiums in the wake of the collapse of HIH Insurance.
Some pointers for choosing a managed fund
When you've set your investment objectives - provided you've done so realistically - and you have an understanding of who the well-structured, well-resourced and competent fund managers are and how they go about the task of managing money, then you're all set to go out and choose a managed fund.
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