The second week of the AGM season will be dominated by Telstra, Commonwealth Bank and CSL, picking up where the August reporting season left off.

CBA chief executive Matt Comyn used last year’s annual meeting to discuss the outlook for growth, housing credit, business profitability and lending standards. The response to COVID-19 and the subsequent slashing of its final dividend to 98¢ a share rewrote the investor playbook for the banking sector.
An unexpected rally in bank stocks that began with the federal Treasurer’s decision to repeal responsible lending standards last month, in potentially the most significant reform to credit rules in a decade, enjoyed a second wind with last week’s federal budget.
Added to the incentives for business and support for consumers in the budget papers, as Bell Potter observes, is the survival of Australia’s AAA sovereign rating post-fiscal update. It is linked to that of the major lenders and ensures stability for wholesale funding.
Households are suddenly in a more enviable position, primarily because of the introduction of retrospective tax cuts and other new measures which caused Westpac chief economist Bill Evans late on Friday to lift his 2021 growth forecast to 2.8 per cent from 2.5 per cent.
He also increased his growth forecast for consumer spending to 4.2 per cent from 3.5 per cent.
That is good news for the likes of four-wheel-drive parts and accessories maker ARB, which holds it AGM on Thursday. ARB delivered an impromptu trading update last week and memorably reported its highest monthly sales in July.
ARB has acknowledged that government stimulus (and a new preference for holidaying at home) enabled its September quarter sales growth of 17.7 per cent.
With direct Australian fiscal support as a share of GDP now exceeding 10 per cent on a calendar year measure, that is higher than comparable economies, including the US, Canada, Japan, UK and Germany, according to AMP Capital analysis.
Telstra’s AGM on Tuesday follows it setting 2020-21 expectations for underlying EBITDA of $6.5 billion to $7 billion. It assumes the NBN makes a $700 million hole in earnings this year, which puts the 16¢ a share in annual dividends at risk.
To support that, it “would need EBITDA in the range of $7.5 billion to $8.5 billion”, chief executive Andy Penn warned in August in one of the worst received results of the reporting season.
Finally, CSL’s AGM on Wednesday will expand on the degree its business is still being shaped by COVID-19, and specifically the recovery in US donor visits.
Any commentary on a COVID-19 vaccine (it has two manufacturing heads of agreements the Oxford-AstraZeneca candidate and the University of Queensland’s) will be instrumental to assumptions for the reopening of Australia’s border to the world.
CSL’s 2020-21 guidance is for net profit of $US2.1 billion ($2.9 billion) to $US2.265 billion.
Reserve Bank governor Philip Lowe will give a speech on Thursday at Citi’s annual conference. The RBA’s October meeting was concluded just hours before the 2020-21 federal budget was released.