AustralianSuper to Manage Equity In-house

The Australian has reported that AustralianSuper, Australia's largest industry superfund, is planning to manage some of its $15 billion of Australian equity investments, which are currently managed externally.

AustralianSuper head of equities, Innes McKeand told The Australian that the fund was 'in the process of putting a platform in place' to oversee some of its Australian equity investments.
The move would be a blow to the funds management industry which is already struggling with low volumes, soft equity markets and fund outflows.

The moves come as active equities managers face pressure to perform in the face of a shrinking number of investment mandates, driven by super fund mergers and a shift to other asset classes.
Mr McKeand told The Australian that while AustralianSuper would continue to award mandates to external managers, its internal platform was being built 'to cope with a significant amount of funds' to be run by fewer than 10 fund managers.

It is thought that other funds such as UniSuper and Telstra Super are considering a similar move due to their build-up of an in-house stock-picking team.

Internet Australia: Costs 'Could Rise' With NBN Plan Switch - Internet Australia

The chairman of NBN Co, Harrison Young, hopes to broaden the debate about the merits and cost of the government's National Broadband Network in a public speech today.

Mr Young will argue that changing the network design to the Coalition's preferred "mix of technologies" could increase the long-term costs of the network and fail to deliver key policy targets, at a forum about “Australia's Digital Future" and hosted by the Committee for Economic Development of Australia (CEDA) in Sydney.

Mr Young's speech outlines three "interwoven" aspects of the NBN – a super-fast broadband network that will cost about $40 billion to construct - the telecommunications market structure, infrastructure and future applications and benefits of the network, according to a draft copy obtained by Business Day.

While saying he wants to stay out of the debate about whether fibre to the premises is needed when fibre to the node technology exists, Mr Young says that “if you retain Telstra infrastructure as part of the national broadband network, even just the last bit, you will not have accomplished the separation of [Telstra] wholesale from retail that was a major objective of Project NBN”.
A fibre-to-the-premise model runs fibre optic cables all the way from an exchange into households, while fibre-to-the-node only runs fibre cable from the exchange to an air-conditioned street side cabinet – the node - serving dozens of premises but keeping the copper wire between the node and households.

Mr Young also says fibre-to-the-node is more expensive over the long term than NBN Co's current design.

“The apparent cost advantage of fibre to the node decreases as you lengthen the time frame you look at. In the long run, as Keynes famously said, we are all dead. Estimating costs is an engineering problem. Deciding on the relevant time frame is a policy question.”

Opposition communications spokesman Malcolm Turnbull has promised a Coalition government would deliver “very fast broadband sooner, cheaper and more affordably” using a mix of technologies, including fibre-to-the-node.

A future Coalition government would also keep the pay-television and internet cable owned by Telstra and Optus, which is connected to about 1.2 million households in wealthy inner-city areas.

NBN Co has struck commercial deals with Telstra and Optus to buy their cable customers and decommission the cable, a move that is heavily criticised by the Opposition.

But Mr Young will today tell the CEDA audience that since the cable networks were only built in suburbs containing Australia's wealthiest households, forcing NBN Co to keep to cables and not build fibre would create the “ironic situation that the wealthiest suburbs have the lowest-quality broadband in the country”.

NBN Co's super-fast fibre network will start operating at 100 megabits per second, but can be upgraded to 1 gigabit per second and faster speeds in coming years. The existing cable network does not have the same upgrade capacities.

Mr Young, who is a director at the Commonwealth Bank, former director at the Bank of England and former chair of Morgan Stanley Australia, lays out the policy and market reforms the current Labor government wants to achieve and says natural monopolies can be the most most efficient use of society's resources.

Using the example of bridges, he says building two toll bridges right next to each other would halve the flow of traffic on each bridge and push tolls to cover the owner's construction costs higher than a single bridge-owner would have to.

Further, NBN Co will not become another Telstra because it is not allowed to sell services at the retail level, he says.

“The problem with Telstra is not that it is a regulated monopoly supplier of wholesale services but that it has been able to behave like a monopolist in the provision of retail services, which is not a natural monopoly.”

Mr Young will be speaking alongside the chair of Regional Development Australia, Dave Abrahams, managing director of IBM in Australia and New Zealand, Andrew Stevens, head of customer relationship management and Medibank, Dermot Roche and head of telecommunications research at Ovum, David Kennedy.

Australian Capital Cities: Where's Hot, Where's Not

DARWIN was Australia's best-performing capital city for property values during the past quarter - up 5.2 per cent - and showing year-on-year growth of 4.2 per cent, according to the latest figures from RP Data.

The RP Data-Rismark August Hedonic index shows Adelaide is the weakest performing capital city, with the change in dwelling values sliding 2.2 per cent during the past three months.

The monthly figures were more optimistic though for Adelaide, showing 1.4 per cent growth for August.

Sydney and Melbourne both recorded only 0.1 per cent growth for the month, but are performing better for the quarter, at 2.4 per cent and 2.5 per cent respectively.

RP Data research director Tim Lawless, said the figures showed a flat winter season that could be the foundation of a strengthening Spring.

Combined with the lowest transaction levels since the late 1990s, prices could also soon be expected to drift upwards after years in the doldrums.

"Spring is going to be better than last year,” Mr Lawless said.

"This is the first time that we have seen total listings across the capital cities the same as they were last year.”

Mr Lawless said lower listing levels were good news for vendors because it meant there was not as much choice in the market which could improve prices.

"In November last year, the listings were 30 per cent higher than they are now,” Mr Lawless said.
"They are currently only 0.5 per cent higher than last year, which means that we have a good benchmark level."

From a supply perspective, it’s a sign that there aren’t as many homes on the market at the moment and that means homes are selling a bit faster and vendors discounting a little less but transaction numbers stabilising.”

Mr Lawless said transaction volumes were at their lowest since 1998 - and were currently lower than during the Global Financial Crisis.

"At the moment based on June data, transaction volumes are 7 per cent lower than the same time last year,” Mr Lawless said.

"We’re averaging 30,000 sales each month and that’s fairly steady across 2012.”

But the lack of stock was being treated calmly by potential buyers who are showing patience about finding exactly the right home.

"A lot more people are attending local houses and showing interest in the market place but there is still not a level of urgency that will push buyers into making a purchase decision rapidly,” Mr Lawless said.

“Purchase decisions won’t be rushed, buyers are playing vendors off against each other and are negotiating pretty hard.”

Figures from the data showed:

- Hobart prices grew 3.9 per cent for the year to date
- Sydney prices grew 1.9 per cent for the year to date
- Darwin prices grew 8.4 per cent for the year to date
- Brisbane prices grew 0.6 per cent for the quarter
- Perth prices lifted just 0.2 per cent for the quarter

Australia Mortgage: House Prices Flat in August

 

AUSTRALIAN house prices were flat in August, although Adelaide and Canberra experienced some growth.

House prices in Perth and Hobart fell more than one per cent in the month and there was little price movement in Sydney, Melbourne and Brisbane, the RP Data-Rismark August Index showed.
Adelaide and Canberra prices increased more than one per cent, while Darwin home values fell half a per cent.

The index posted a 1.6 per cent increase in Australian home values over the past three months but a fall of 2.4 per cent over the year to August.
During the quarter to August, Darwin was the best performing capital city, registering 5.2 per cent growth.

This was followed by Melbourne at 2.5 per cent, and Sydney at 2.4 per cent.
Perth and Brisbane recorded marginal growth of 0.2 per cent and 0.6 per cent respectively over the three-month period.

RP Data research director Tim Lawless said Sydney dwelling values increased in five of the past eight months, helping to provide a cumulative capital gain of 1.9 per cent over the year to date.
"Sydney is proving to be one of the most consistent performing capitals this year," he said.

A rebound in Melbourne was also encouraging, given more worrying signals earlier in the year.
"Improved affordability since June has helped dwelling values rise across every capital city over the three months ending August 2012, apart from Adelaide," Mr Lawless said.

"The big question is, can this growth be sustained?"

Mr Lawless said the spring selling season would be a good litmus test.

The highest rental yields for houses in the quarter were in Darwin at 5.8 per cent and the lowest yield were in Melbourne at 3.6 per cent.

No Grounds To Give Up Coffee - Coffee Price Comparison Australia

HOBART coffee lovers are paying up to $1 more per cup of takeaway cappuccino than those in Sydney.

Local prices are also on par with Perth, which has taken the mantle of the most expensive major city interstate, new statistics reveal.

But local barristas say their customers base their decisions on their tastebuds not their wallets.

A recent survey by Gilkatho, a coffee machine retail company, has found the average price for a takeaway cappuccino in Australia's major capital cities varies from $3.36 in Melbourne to $3.87 in Perth.

A Mercury survey of Hobart coffee shops yesterday showed prices were all generally above the $3.47 national average.

Prices for a regular takeaway cappuccino in Hobart varied from $3.50 to $4.35.

Doctor Coffee owner Craig Gibson said yesterday there was a number of reasons why coffee can be more expensive in Tasmania.

Transport costs were a big reason, he said.

"A lot of our coffee comes from Melbourne, where a lot of the good speciality roasters are based," he said.

Mr Gibson said most of his customers were not shopping on price.

"Ninety nine per cent of our customers come here because of the quality," he said.

Di Bella coffee managing director Phillip Di Bella said yesterday it costs about $1 in ingredients to make a cup of coffee and $2 including labour.

"As labour is the main cost in making a coffee and pay rates vary from state to state, this can change the cost to make a coffee considerably," he said.

"Rents also vary depending on the location of the cafe, city and space."

Australia - Broadband Market - Overview, Statistics and Forecasts - 2012

(http://www.researchandmarkets.com/research/nf2r64/australia_broadb) has announced the addition of the "Australia - Broadband Market - Overview, Statistics and Forecasts" report to their offering.

In this report we provide an overview and analysis of the fixed and mobile broadband market including infrastructure statistics, major internet service provider statistics and information on the key providers. BuddeComm's 2012 Australia Broadband Market - Overview and Statistics annual publication profiles key sectors in Australia's broadband market.

This report also provides a statistical overview of the broadband market in Australia and includes an overview of the major network operators, wholesalers and retail service providers. The report also examines the developments in HFC networks, while the statistical sections of the report provide historical data as well as forecasts relating to fixed and mobile broadband usage, internet service providers and the business broadband market/sector.

Market highlights:

- The internet-connected home is nearly ubiquitous across Australia, with over 80% penetration rate predicted by end-2012;
- Total value of the broadband markets is now more than $4 billion;
- Cloud-based usage by business increasing as backups and shared data come from faster connections;
- Online businesses are sustaining higher financial returns into 2012;
- Data usage by users increases by 80% year-on-year in 2011 and is set to double as more broadband-enabled devices are used;
- Connected or smartTVs will see a very rapid uptake over the 2013-2015 period;
- An overview of new trends and existing technologies is provided;
- Penetration rate of HFC broadband subscribers is under 10% of the total broadband market in Australia;
- Key usage trends for the fixed broadband market.

Key Topics Covered:

1. Statistical Overview
2. The National Broadband Network (brief overview)
3. Business Market Statistics
4. Residential Market Statistics
5. DSL Market, Overview, Statistics and Providers
6. HFC Cable Networks
7. Mobile Broadband - Statistical Overview and Forecasts
8. Market Forecasts

For more information visit http://www.researchandmarkets.com/research/nf2r64/australia_broadb

Superannuation Australia: Transparency Needed on Fees - Members Charged Too Much By Managers (Superannuation Australia)

While the Australian super industry has grown in scale, this has not translated into lower fees for members.

Despite the amazing growth of scale in Australia's superannuation industry, fees have grown instead of dropping in recent years and members should demand transparency from funds, a financial adviser has said.

Custom Wealth Solutions chief analyst Chris Appleyard said "typically, when a company increases its production or its supply of services, it achieves an economy of scale and can reduce the costs of doing business".

"Superannuation funds do not seem to have passed on these savings to fund members," Appleyard said.

"Although nobody likes to pay superannuation management fees, one may think they are just the price of doing business; a necessary evil one cannot avoid. Many super managers count on that attitude and are overcharging super members."

The local superannuation market has the fastest-growing pension sector in the world, having grown 17 per cent in the past 10 years. The $1.3-trillion business was more than triple the United States retirement market.

"However, despite this amazing growth in productivity, members and assets invested, super fees have grown instead of dropped in recent years. Consumers may think that paying fees is unavoidable if they want the benefits of a managed superannuation fund. They may also conclude that 1 per cent here or there won't make much of a difference in the long run. Unfortunately, they would be completely wrong," Appleyard said.

Not all super funds charged the same management fees, with the average charge being 1.3 per cent, according to super industry researcher SuperRatings.

"However, some funds will charge up to 4 per cent of the fund's assets in fees," Appleyard said.
"That's a huge difference. When it comes to super funds, just half of a point difference can mean $50,000 less at retirement."

The Australian Taxation Office's self-managed superannuation fund (SMSF) overview for 2009/10 said the estimated average operating expense ratio of SMSFs fell from 0.69 per cent to 0.59 per cent and 0.54 per cent over the years ended 30 June 2008, 2009 and 2010 respectively.

Most SMSFs had an estimated operating expense ratio of less than 1 per cent (64.7 per cent of SMSFs in 2010). The highest proportion (almost 38 per cent in 2010) had an estimated operating expense ratio of 0.25 per cent or less.

"Nevertheless, self-managed super funds do require a substantial investment in time and resources that could make them prohibitively expensive for members with small super fund balances," Appleyard said.

Often managers would charge fees for services that clients either did not need or did not know about. "It is crucial that super investors understand what services they are receiving and what it costs them or else you can end up paying for services you are not aware of and don't use," Appleyard said.

People should consider the cost and availability of insurance, the fees super funds charged, and their expected retirement age before choosing a super fund. For some people, a competitive industry or government super fund was a good fit, while others benefited from more flexible instruments, such as master trusts and SMSFs.

Rhonda and Ketut from AAMI's Car Insurance Commercial are a Facebook Hit

WE'VE all seen the ad and now Rhonda and Ketut are Facebook celebrities in their own right.
The stars of AAMI's car insurance ad, in which a sunburnt Australian woman and a Balinese bar attendant converse on a beach has spawned a fan page which has attracted over 52,000 likes in less than 48 hours.

The page, which has been named "The sexual tension between Katut and Rhonda," (sic) suggests that there is something more to Ketut and Rhonda's conversation than first meets the eye.
The creator of the page has reposted phrases from the ad such as "You look so hot today Rhonda. Like a sunrise" and "You're naughty" to back up his assumptions.

And users agree that there might be something going on between the flirty pair.
"You two are 'doing it', I know you are, everyone can tell..." wrote Daniel Taite.
Others have praised the ad for being the "best on TV".

"My kids are OBSESSED wth this ad, they run around playing 'the brakefoot game' and yelling rhonda is mine rhonda is mine. whoeva creatd this ad is a clever person very catchy," wrote Amber Lefevre.

While Jan D'orival added: "love the ad katut, when are you going to do another one?"
However, Rhonda isn't just making waves on Facebook.

Tribute t-shirts are already being sold in the Indonesian holiday destination and fans have posted photos of them wearing the souveniers on the page.

"Bali is actually full of singlets now that say "rhonda is mine" "I love rhonda" etc! They're so quick!" wrote Arlene Baverstock

Several other fan pages dedicated to Rhonda have also been created, including one that accuses the ad of being racist and reeking of "cultural and economic imperialism."