THE NEWS WRAP: APRA’s bad loan warning

The Australian Prudential Regulation Authority has issued a report warning lenders about a spike in the number of high-risk loans, with the number of borrowers mortgaging more than 90% of a property’s value spiking during the June quarter.

“It is important for [authorised deposit-taking institutions] to ensure that new borrowers are able to service debt and afford higher repayments when interest rates rise from current record low levels,” APRA says in the report.

“While the business non-performing loan ratio has gradually declined over the past few years, it remains elevated relative to pre-crisis levels.

“This reflects weaknesses in a number of industries, particularly the commercial property industry and those industries impacted by a high exchange rate and subdued consumer spending.”

Dick Smith surges towards an IPO

Electronics retailer Dick Smith has appointed Macquarie Bank and Goldman Sachs to explore the possibility of an initial public offering worth around $500 million.

The IPO would see private equity company Anchorage Capital, which purchased the chain from Woolworths in November of last year, sell the company for more than five times the amount it purchased it for.

Apple’s share price dives after iPhone unveiling

Apple’s share price slid by 6% after the company unveiled its new iPhone 5C and 5S smartphones, with leading analysts criticising the lack of new hardware innovation in the devices.

“Investors were put off that Apple’s price point didn’t go low enough to attract a new market. It doesn’t have the same range in price that Apple’s competitors have,” Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters.

“Also, there was nothing transformational announced. It has the fingerprint scan and new colours, but bigger features, like different screen sizes, don’t seem to be at the ready. This was less than expected from a company that has a reputation for surprising with a killer product or strategy.”

Overnight

The Dow Jones Industrial Average is up to 15326.6. The Aussie dollar is down to US 93.26 cents.