Date: May 02 2012
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
--The Reserve Bank of Australia's decision to cut interest rates by 50 basis points led to a surge on the Australian stockmarket, with the S&P/ASX 200 closing at 4429.5 points, its highest level in more than nine months. Malcolm Wood, head of investment strategy at wealth management firm Morgan Stanley Smith Barney, suggested that investors wait before buying into companies that are sensitive to interest rates. "The Federal Government is tightening fiscal policy, so that may hurt construction which will hurt some companies like Boral," he added. Page 15.
--Malaysian oil and gas producer Petronas has sold its 17.3 per cent holding in Australian firm APA Group for $540 million, solidifying the view of observers that the company now prefers Australian resource ventures to infrastructure projects. Petronas had held the stake for over a decade and was the original cornerstone investor in one of the gasline operator's founding assets, the Moomba to Sydney pipeline. Page 15.
--Oil and gas producer Woodside Petroleum is preparing for a battle among its venture partners on the $30 billion Browse liquefied natural gas (LNG) project. The Mitsubishi-Mitsui MIMI consortium, whose acquisition of a 14.7 per cent stake in Browse was revealed yesterday, indicated that it might prefer to process gas at the North-West Shelf LNG project rather than at a proposed facility on Western Australia's Kimberley coast. Page 17.
--Energy retailer TRUenergy has appointed Graham Bradley, a former chairman of the Business Council of Australia, as a director ahead of its planned float. Hong Kong-based firm CLP Group, the parent company of TRUenergy, is expecting to raise up to $4 billion with the partial listing. The group is also holding further talks regarding the appointment of a fifth Australian independent director. Page 17.
THE AUSTRALIAN (www.theaustralian.news.com.au)
--The Reserve Bank of Australia (RBA) yesterday moved to boost consumer confidence by announcing a 50 basis point reduction in the official interest rate to 3.75 per cent. "If the RBA was confident the banks would have passed on all of a 25-basis-point move I think they would have done two cuts of 25 basis points, but they weren't confident of that happening," Graham Bradley, chairman of developer Stockland and investment bank HSBC Australia, said. Page 31.
--Ian Narev, chief executive of Commonwealth Bank of Australia, yesterday said that more political certainty was required to lift confidence in the local economy. "Anyone running a business ideally wants political stability ... everybody knows it has been rougher here than it has been in the past," Mr Narev told a Trans Tasman Business Circle event in Sydney. Page 31.
--Paint supplier DuluxGroup could be forced to increase its $188 million takeover bid for concrete and roller-door manufacturer Alesco after some shareholders failed to warm to the surprise play. Dulux earlier this week acquired 19.96 per cent of Alesco at $2 a share, pledging yesterday to make the same all-cash offer to the rest of the company's investors. The head of equities at fund manager Perpetual, Matt Williams, however, queried the relationship between "paints and garage doors". Page 31.
--Management consultant firm McKinsey has been appointed by Westpac Banking Corporation to advise the bank on obtaining efficiency gains in areas such as information technology and outsourcing. A spokesman for the bank declined to confirm speculation that McKinsey had been asked to find a specific level of savings, however, but stated that lifting productivity had been an objective for Westpac. Page 31.
THE SYDNEY MORNING HERALD (www.smh.com.au)
--Global miners BHP Billiton and Rio Tinto yesterday raised concerns that the Federal Government will abolish tax incentives for diesel fuel in the upcoming federal budget. Tom Albanese, chief executive of Rio Tinto, and Alberto Calderon, group executive of BHP, warned that capital costs had risen for new ventures and any additional fees would not improve the investment prospects for greenfield projects. Page B1.
--Investors responded to the Reserve Bank of Australia's decision to cut interest rates by 50 basis points to 3.75 per cent by taking the view that the central bank will lower the cash rate further at its next monthly meeting. Futures markets last night were operating on in a 75 per cent chance of another cut and expecting an additional reduction to 3 per cent before the end of the year. Page B1.
--The Federal Government's Future Fund yesterday announced in its latest portfolio report a 5.4 per cent return for the three months to March, following a rebound in European markets. The investment fund, which has a 2.2 per cent return for the 2011-12 financial year so far, held $77 billion in assets on March 31. "The market falls of the first half have been reversed as central banks took steps to provide greater monetary accommodation and investor sentiment improved," Mark Burgess, general manager of the fund, said. Page B3.
--Lobby groups representing free-to-air television networks have warned that a proposal before the Federal Government to increase quotas for local children's programs, documentaries and drama will result in higher programming costs. Geoff Brown, executive director of the Screen Producers Association of Australia, said while the increased number of hours for specific genres would cost networks around $60 million, the amount was inconsequential given that they would no longer have to pay hundreds of millions of dollars in licence fees in the future. Page B4.
THE AGE (www.theage.com.au)
--Developer Stockland yesterday announced that it will be forced to write down $48 million on five of its residential community projects across Australia as a result of pressure from the housing sector's high end. Matthew Quinn, chief executive of Stockland, said the company was on schedule to settle approximately 5000 lots for this year. He added that the Reserve Bank of Australia's recent decision to reduce interest rates by 50 basis points would "make a real difference to buyer sentiment". Page B5.
--Federal Treasury has stated in a economic research paper that China's demand for Australian agricultural and resources products would continue to increase "until the early 2020s". "A growing population and rising incomes in China will sustain strong demand for agricultural commodities in future decades ... demand will continue shifting from staple foods, such as grains, towards meat and horticultural products," the paper said. Page B5.
--A former project manager of a Leighton Holdings subsidiary has been asked to give his former employer access to his private email accounts and four bank accounts in Isle of Man. Gavin Hodge was fired from Leighton International after he allegedly conspired to damage company interests while also diverting $520,000 worth of steel from the Leighton Eclipse pipe-laying ship to another vessel owned by Indian conglomerate Adani. Mr Hodge denied all claims and sued the company over his sacking last year. Page B6.
--Wotif saw its shares plunge 6 per cent yesterday to close at $4.17 after the online travel agency's profit guidance failed to meet the market's expectations. Wotif's projected after-tax profit of $55.5 million to $57.5 million was only marginally below analysts' predicted target of $58 million, but the figure is still expected to spark downgrades from market observers. Page B8.
This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.
[ Canberra Times | Text-only index]