CCP credit corp group limited

2.25%

$13.20

Actually I probably should point out that the 6.8% figure is...

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JoeGambler

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17/09/20

22:03

Post #: 47432843
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Originally posted by JoeGambler: ↑

Unemployment numbers were a upside surprise today, Pioupiou.

https://www.theage.com.au/business/markets/asx-set-to-slide-us-tech-dives-after-fed-meeting-20200917-p55wer.html

"Today’s jobs data for August delivered a big upside surprise with an 111,000 or 0.9 per cent lift in employment for the month. The consensus was for a 35,000 fall in employment." Kristina Clifton, CBA senior economist: "The lift in hours worked suggests a decent recovery in the labour market is underway despite the difficult situation in Victoria. We expect to see Victoria join the recovery once the process of winding back restrictions in Metropolitan Melbourne is well underway. At this stage this is looking likely towards the end of the year. For the rest of Australia the recovery in the labour market will slow. An initial bounce in jobs was always going to happen with an easing in restrictions. But further gains in employment from here will be harder to achieve"

Callam Pickering, APAC economist at global job site Indeed: "The road to recovery still has a long way to go. Employment is still 3.2 per cent below its peak and hours worked is 5.4 per cent below its level in March. The progress made thus far has primarily reflected the opening up of the Australian economy, with the next step towards complete recovery more difficult"

Dr Sarah Hunter, Chief Economist for BIS Oxford Economics: "The fall in the unemployment rate suggests that the peak at the end of the year may be lower than current estimates. But this outcome would understate the impact of the pandemic, given the fall in the participation rate and the increase in the underutilisation rate (which remained above 11 per cent in August) – both of these shifts will need to be reversed through the recovery period. And this much spare capacity in the labour market will weigh heavily on wages growth for at least the next year"

Westpac senior economist Justin Smirk: "Without a doubt, the recovery in the rest of the country has been more robust (so far) than we thought while the hit to the Victorian labour market has not as bad as expected. However, with the rolling off or adjustment of many of support packages (in particular JobKeeper) between now and the end of the year there is meaningful risk to employment" Bit of a mixed bag in terms of the moving parts, however given CCP is now budgeting for 10% unemployment and the headline number is now down to 6.8% from 7.5% this is good news. Granted participation is still weaker, but this should theoretically bode well for returns on any purchasing or lending that has been done to date. The existing stock of PDLs and debt, especially with large scale stimulus still flowing through the system to at least March next year, should also perform better.

"PDL pricing models and consumer lending criteria have been adjusted to account for persistently high levels of unemployment, in excess of 10 per cent, and a reduction in government support, stimulus measures and private sector forbearance (temporary support) over time. Credit Corp is now pricing PDLs and issuing consumer loans at these adjusted settings."

"These settings have been applied to the carrying value of the Group’s financial assets and the net economic benefit of its ongoing purchasing commitments. This has given rise to charges for impairment and provisions in Credit Corp’s FY2020 results, reducing reported NPAT by $64.1 million"

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Actually I probably should point out that the 6.8% figure is being held down by jobkeeper, the effective unemployment rate is likely still over 10%. However, there has not been an income recession as yet which is probably what counts for CCP. Jobkeeper remains at a reduced level for another 6 months, although the continued economic recovery will hopefully offset that run off of stimulus.

Last edited by JoeGambler: 17/09/20

CCP Price at posting: $17.76 Sentiment: None Disclosure: Held
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