NBN Co has directly taken over the construction of the National Broadband Network in the North Territory after its major contractor Syntheo exited the project.
Syntheo, a 50/50 joint venture between Lend Lease and Service Stream said it would concentrate on its construction work in South Australia and Western Australia.
Chief executive of the NBN Co Mike Quigley blamed Syntheo for delays in the rollout of the national broad project during a Senate estimate hearing.
The company said it “can confirm it will take over the design and construction of the fibre rollout in the Northern Territory".
Here's what you need2know this Wednesday evening:
Markets
- ASX200 finished down 0.4%
- AUD flat around $US1.0374
- Nikkei up 1.7%, Hang Seng up 0.7%, Kospi down 0.6%
- Gold at $US1613.48, WTI oil at $US92.41
- Wall Street futures down 0.1%, FTSE100 futures up 0.2%
News
- When Drake's empire came crumbling down
- DJs hoping to emerge from consumer winter
- Blockbuster Tom Waterhouse deal 'not on': suitor
- Super on track for best year since GFC
- Goldman cuts iron-ore forecasts as global demand growth slows
- Uncertainty as Cyprus parliament votes against deposit levy
For the curious mind, here's how blue chips performed:
- BHP: -2.7%
- Rio: -2%
- ANZ: flat
- CBA: flat
- NAB: -0.1%
- Westpac: +0.3%
- Fortescue: -2.3%
- Woolworths: +0.4%
- Wesfarmers: flat
- Telstra: +0.9%
Among the sectors, miners lost 1.8 per cent, energy slide 1 per cent, consumer discretionary dropped 0.5 per cent and financials were off 0.1 per cent.
Telecommunications bucked the trend, jumping 0.9 per cent.
The sharemarket has finished down, but well off the day's lows. The benchmark S&P/ASX200 fell 20.1 points, or 0.4 per cent, to 4967.3, while the broader All Ords lost 21.8 points, or 0.4 per cent, to 4982.6.
The directors of Liquidnet - a global ‘‘dark pool’’ operator which opened its Australian office in 2008 - had lunch with journalists in Sydney today, writes BusinessDay's Gareth Hutchens.
It was good timing - it came a couple of days after the Australian Securities and Investments Commission released its report on the impact that dark pools and high-speed traders were having on local financial markets.
Liquidnet reckons it won’t be affected by ASIC’s proposed changes to the dark pool sector because it doesn’t allow high-speed traders to use its dark pool, and its average trade size is $1.3 million (in contrast, the ASX’s average trade size is $6000).
However, it is predicting that there will be a large pushback from firms such as Goldman Sachs and Credit Suisse, those that internalise a lot of their own trades.
It will be a space worth watching as ASIC's consultation period runs its course.
Fortescue Metals said it expects iron ore prices to average between $120 a tonne to $130 a tonne, although they are likely to remain volatile around that level.
"We see going forward $120 to $130 a tonne to be a sustainable level," Nev Power, chief executive of the world's no.4 iron ore miner, said at the Mines & Money conference in Hong Kong.
Fortescue shares are donw 2.3 per cent to $3.80.
Market darling Sirius Resources has passed another milestone by today releasing its maiden JORC resource estimate for the Nova deposit in WA.
Sirius reported a short time ago that Nova is estimated to contain 242,000 tonnes of Nickel, 100,000 tonnes of copper and 7700 tonnes of cobalt.
Regular followers of Sirius will know that Nova is only half the story now, after Sirius discovered another exciting deposit nearby called Bollinger in recent weeks.
Today's resource numbers do not include Bollinger, meaning the real size of Sirius' resource is likely to be much bigger.
Sirius is the company that was worth just 5 cents last July, but is now trading at $4.21 after a series of exciting discoveries.
The chief economist at AMP Capital, Shane Oliver, has looked at the risks associated with quantitative easing - or money printing - and concluded:
- Concerns that quantitative easing will end in hyperinflation and economic mayhem are way overblown
- Constrained demand for credit along with significant spare capacity suggests the risk of higher inflation [note, not hyperinflation] is still several years away.
Mr Oliver has also taken a well-aimed shot at the term ‘‘currency wars,’’ which he says is "a nonsense."
‘‘All countries when they go through tough times provide monetary stimulus to get their economies on track. This normally involves lower interest rates, but more recently QE,’’ he says.
‘‘Both can have the effect of depressing the country’s exchange rate. But this is nothing new. It should really be called stimulus wars.
The peak farmers’ body is stepping up pressure on the federal government to stop major supermarkets abusing their market power.
The National Farmers’ Federation NFF said it was time for a mandatory code of conduct for supermarkets, as efforts to develop one voluntarily had failed.
After months of discussion with the giants Coles and Woolworths and other retailers, NFF president Jock Laurie says the group has ‘‘lost confidence’’ a voluntary code can deliver what producers need.
Shares in Wesfarmers and Woolworths are marginally higher.
All Nippon Airways, the biggest customer for Boeing Co's 787 Dreamliner, wants the planemaker to compensate it in cash, rather than discounts on future purchases, for losses racked up since the aircraft was grounded worldwide in mid-January, said a person familiar with ANA's intention.
All 50 Dreamliners have been idled for two months after separate incidents with the plane's battery at a US airport and on a domestic flight in Japan. ANA operates 17 of those aircraft and has likely been hardest hit by having the plane out of service. The airline has canceled more than 3,600 flights to the end of May.
A hot and dry summer has hurt the rural services operations of agribusiness Elders.
Consequently, Elders expects to report a small underlying loss in earnings for the first half of its fiscal year.
‘‘Dry and hot weather conditions over the summer have led to a reduction in demand for agricultural chemicals across the cropping and livestock sectors,’’ Elders chief executive Malcolm Jackman said in a statement.
Sales of farm supplies were down 10 per cent compared with the same time last year.
Shares are down 3.9 per cent to 12.5 cents.
The boss of Sims Metal Management’s operations in Europe has left the company, but no reason for his departure has been given.
Graham Davy’s departure has occurred as the company completes its investigation into possible fraud at its British business.
‘‘Effective immediately Graham Davy, CEO Europe and Global Sims Recycling Solutions (SRS), is no longer employed by the company,’’ the world’s biggest scrap metal and electronics recycler said in a short statement on Wednesday.
There has been no suggestion that there is any link between Mr Davy’s departure and the possible fraud at the company’s British operations.
Sims' shares on the ASX are down 2.6 per cent to $10.16.
Here's a cracking yarn from BusinessDay's Michael West that we published earlier:
He was selling to the very end. Even as the life savings of his investors were frozen in his foundering mortgage funds, and even as his staff were fleeing the sinking ship, Gold Coast financier Peter Drake was still traipsing the world trying to raise more money.
As his $3 billion property fund empire was cratering, Drake was enticing financial advisers with three years of commissions upfront. If they placed $1 million of their clients’ savings with LM Investment Management funds, they would get $100,000 cash.
The end came quickly though. Directors of Peter Drake’s LM pulled the pin yesterday afternoon, calling in administrators to sort through a labyrinthine mess of interlocking companies and trusts from here to Hong Kong.
It is estimated that up to $15 billion in savings has been blown up in mortgage funds in Australia, much of it by Gold Coast entrepreneurs such as Drake.
The spiel was simple: invest with us in property. Look at our 8 per cent returns. Can’t go wrong with property – we are talking ‘bricks-and-mortar’. Drake’s salesmen even used words such as ‘bank-like’.
Here's something a little lighter, Australia imported a record 5.4 million bottles of champagne in 2012, to become the world’s 7th biggest market for the French sparkling wine and a bright spot in a year when global sales fell by 4.4 per cent.
Industry body Champagne Bureau said Australia’s annual growth rate of 11.2 per cent was the fastest growth rate of all its import markets, and marked three consecutive years of sales growth down under.
And it pushed Australia up one notch of the top 10 importers of champagne, ahead of Switzerland, Spain and Sweden.
Australia’s strong economy and the higher purchasing power of the Australian dollar are believed to be underpinning growth in champagne sales.
Here's a look at how the rest of the region is performing:
- Nikkei(Japan): +2%
- Shanghai: +1%
- Taiwan: -0.2%
- South Korea: -0.3%
- Singapore: -1.5%
- New Zealand: +0.3%
The Australian Government's main commodities forecaster - the Bureau of Resources and Energy Economics - picked a good day to update its pricing expectations, given the fierce debate taking place today over the future of iron ore prices.
BREE have increased their estimates for iron ore prices this year, but before you get too excited, it's important to realise they are raising from a very low base.
BREE now expects the benchmark iron ore price to average $US119 per tonne over 2013, up from the $US106 they predicted in December.
That's still well below the predictions made overnight by the UK arm of Goldman Sachs, who predicted iron ore would average $US139 per tonne in 2013 rather than their previous bet of $US144.
The UK arm of Goldmans promptly downgraded Rio to a ''conviction sell'' rating based on the price revisions.
The Australian arm of Goldmans still has a ''Neutral'' rating on Rio.
Shortly after 1pm Rio shares were still feeling the pain of that downgrade, and were $1.58 lower at $57.08.
Australian superannuation funds are continuing to reach new highs, hitting a median growth of up to 13 per cent for the financial year to date, and are on track to record their best performance since the financial crisis.
The median growth fund rose 2 per cent in February, the ninth consecutive month of positive growth for super funds, industry analysts SuperRatings and Chant West said.
‘‘Four years on from the lowest point of the GFC, it is great to see super funds have rebounded so strongly. Investors shouldn’t expect a return to those bull market days of 2004 to 2007, but the 2012-13 financial year remains on track to provide double digit returns,’’ SuperRatings founder Jeff Bresnahan said.
Super funds have rebounded by 44.2 per cent since the financial crisis lows of February 2009, and were also 8.1 per cent lower than their pre-crisis levels, SuperRatings added.
More on the fallout from Cyprus’ vote. Laurence D. Fink, chief executive officer of BlackRock Inc, the world’s largest asset manager, said Cyprus was not a major economic problem and Europe will come to some resolution over the Mediterranean nation that wants to impose a levy on bank deposits.
The standoff between Cyprus and eurozone policy makers reminds us of the frailty in Europe, whose economic problems will take a "multi-year fix", Mr Fink said in a Bloomberg Television interview today.
Cyprus is the fifth euro-zone country to seek a bailout since 2010 to avoid a collapse of its financial system and exit from the common currency.
Sydney will host the first of two G20 meetings of finance ministers and central bank governors next year when Australia takes over the forum’s presidency.
Cairns will host the second meeting of the G20, which brings together the world’s major economies, later in 2014.
The Sydney gathering on February 21-23 will coincide with a meeting of central bank governors held by the Bank for International Settlements.
‘‘The two Sydney meetings will be an excellent opportunity to showcase Australia’s largest city to more than 2000 international delegates, support staff and international media,’’ Treasurer Wayne Swan said in a statement.
‘‘The events will also provide a boost to local tourism providers and promote Sydney as a great place to do business.’’
Next year’s G20 Leaders Summit will be held in Brisbane in November.
Investors continue to flock to hybrid securities being issued by the big banks, despite the strong performance of shares in recent weeks.
NAB today became the latest bank to dramatically increase the size of its hybrid offer after being rushed by strong demand for its convertible preference shares.
NAB said the offer had raised the bank $1.5 billion, double its initial projection last month that the deal would raise $750 million.
Westpac more than doubled the size of its hybrid offer last month.
Hybrid shares pay a set interest rate, which usually tracks the price of debt, and after a set period convert into ordinary shares.
They can be appealing to investors in times of volatile markets because of their predictable yield. However, the corporate regulator has warned people that the products are often complex and riskier than corporate bonds.
A super-injunction obtained by coal baron Nathan Tinkler has been lifted by the Victorian Supreme Court.
Mr Tinkler had obtained orders preventing Fairfax Media from revealing details of a loan of approximately $700 million or the existence of the lawsuit.
This morning Justice David Beach lifted the super-injunction, allowing the existence of the lawsuit to be revealed.
The ruling followed a settlement between Fairfax Media and Mr Tinkler.
Fairfax lawyer, Peter Bartlett, said the super injunction issued by Justice John Digby went further than Mr Tinkler's own barrister was asking for and even prevented Fairfax Media from publishing material it and other media had previously published.
It is understood the loan plus accumulated interest were now around $700 million, and that the interest rate was above 10 per cent.
The loan has also been attracting interest at more than 10 per cent.
However, key details remain suppressed under an agreement between Mr Tinkler's Aston Resources and Fairfax Media.
British bookmaker Ladbrokes has hosed down reports it is about to buy into the online betting business owned by Tom Waterhouse at a price that values it in the hundreds of millions of dollars, writes BusinessDay's Colin Kruger.
A spokesman for Ladbrokes told the Wall Street Journal: "I can confirm we have had no contact with Tom Waterhouse."
Mr Waterhouse was not available for comment. He has been at the centre of controversy over the advertising and promotion of sports betting which has saturated coverage of Australia’s major sporting codes in recent years.
Mr Waterhouse has been at the forefront of a gold rush as online betting operators spend tens of millions of dollars to acquire customers and in turn are being acquired by the UK’s leading gambling operators which see strong potential for growth here.
Last year Mr Waterhouse signed sponsorships with the Sydney Swans and rugby union, but he really hit the headlines with a deal with the NRL where he managed to kick out Tabcorp as an official NRL partner.
The 20 per cent rise seen in Northern Star Resources shares over the past fortnight may have been explained by today's filing of a new substantial shareholder.
The BlackRock group now owns more than 5 per cent of the company - more than 21 million shares - after building its stake in recent times.
NST shares were 88 cents on March 6, but have touched $1.06 in recent days.
They were fetching $1.05 shortly before midday.
There was no sign of BlackRock in the Top 20 Northern Star shareholders as recently as September, but now they are firmly entrenched in the top five.
While Northern Star shareholders will appreciate the bump over the past fortnight, there is a still a long way to go before the stock returns to the $1.57 it was fetching in November, shortly before non-executive director Michael Fotios sold done a portion of his shareholdings.
BlackRock is one the world's biggest fund managers, and it appears that among the various BlackRock funds with exposure to Northern Star is Evy Hambro's world mining fund.
In case you missed it, here's the profile of Hambro we published on Monday:
Famous for controlling the biggest shareholding in big multinational miners like BHP Billiton and Anglo American, BlackRock also has exposure to small and mid-tier Australian gold miners like Evolution Mining and Indochine Mining.
CBRE and Colliers International have been appointed to conduct the much-anticipated sale campaign for the Fairfax Media printing facilities in New South Wales and Victoria.
Fairfax Media, which publishers Businessday plans to close the two newspaper printing plants by mid-2014 as part of a restructure unveiled last June.
The group intends to sell both facilities with vacant possession followed by a delayed settlement in a move tipped to generate significant buyer interest.
Treasury Wine Estates Limited $TWE up 4.07% - on no news - But Retailers are leading the mkts today $WES up 0.5% $WOW up 0.5% $DJS up 3%^JR — CommSec (@CommSec) March 20, 2013
Australia’s dollar remained lower after its biggest drop in more than a week versus the greenback as Cyprus’s parliament rejected a bank-deposit levy needed to secure a bailout, sapping demand for high-yielding assets.
‘‘The US dollar is bid at the moment because of the uncertainty in Europe, and that’s putting other currencies on the back foot, including the Aussie and Kiwi,’’ said Richard Grace, the Sydney-based chief foreign-exchange strategist and head of international economics at Commonwealth Bank.
‘‘The Cypriots have to go back to the drawing board. The danger is they’re forced to implement these bank levies, and the issue of a tax on deposits spreads to other areas of Europe.’’
The Australian dollar was little changed at $US1.0362 from $US1.0370 yesterday, when it dropped 0.3 per cent, the biggest decline since March 8. It weakened 0.2 per cent to 98.48 yen.
All Ordinaries Index (XAO) trading below key 5000pt mark for the 1st time since 26 Feb. March is worst month for mkts since May 2012. ^SD — CommSec (@CommSec) March 20, 2013
Early losses on the ASX200 have now moderated to about 0.5 per cent after dipping as much as 1 per cent.
Evan Lucas at IG Markets has taken a look at the David Jones result and says "the figures are broadly in-line with expectations":
... [B]ut unlike Myer, which beat expectations and had in-line earnings with the corresponding period, DJs have missed this metric.
NPAT fell 13.5% compared to the corresponding period to $73.5 million, as its Future Strategic Direction Plan bit into profits. Earnings per share were also weak, down 15% to 13.9 cents, with cash flows the biggest disappointment, lower by 36% to $104 million, adding pressure to the balance sheet.
However, it’s not all bad news for investors. The dividend was ahead of expectations at ten cents and is very much in-line with the first half 2012. Sales were only 0.7% off the year before, at a tick over $1 billion dollars.
Australia’s economy has improved since the commodity price falls last year and is expected to improve further, according to new data.
The Westpac-Melbourne Institute Leading Index shows economic growth has bounced back, after virtually stalling in the first half of 2012.
Westpac senior economist Matthew Hassan said the surge in commodity prices and the rally in share markets has helped the economy.
However he added that the looming peak in mining investment will be a challenge.
‘‘That pace may be difficult to sustain over the course of 2013,’’ he said.The Leading Index, which indicates the likely pace of economic activity three to nine months in the future, was 3.4 per cent, above its long-term trend of 2.7 per cent.
Resources writer Peter Ker reports that last night's sell call on Rio Tinto by the London office of Goldman Sachs is interesting in the context of what Australian analysts have been saying in recent days.
The Australian arm of Goldman Sachs noted last night that they still had a neutral rating on the stock. On Friday JP Morgan's Australian analysts released a report saying that they prefer Rio over BHP Billiton over the next 12 months.
While they acknowledged there was no near-term catalyst to push shares higher, JP Morgan analysts - led by Lyndon Fagan - opined that fears over a slow-down in China and other factors were already priced into Rio's share price, to the extent it had become a ''buying opportunity''.
Based on the $61.30 that Rio shares were fetching late last week, the JP Morgan team calculated that investors were implying an iron ore price of $US102 per tonne.
That's well below the region of $US134 per tonne, where the benchmark price has been hovering over the past three or four days.
It's also below the $US120 per tonne region that most pundits see as the average price for iron ore this year.
BHP shares were also implying a discount to current iron ore prices ($US121 per tonne) but not as severely as Rio.
The JP Morgan team said they held a ''firm view'' the big miners would eventually trade back to their intrinsic value and that would imply greater upside for Rio shares right now.
''BHP has greater diversification of earnings than RIO offering investors a buffer against commodity price volatility.
"In our view, BHP’s more expensive valuation already reflects this advantage. Further, we argue investors can have exposure to a diversified portfolio on cheaper multiples through owning a range of companies with different commodity exposures. Finally, in our view RIO has a superior iron ore business than BHP.
"Investing in this business makes sense to us due to the best in class IRR’s available, despite the lack of earnings diversification,'' said the JP Morgan report.
The issue of iron ore price direction will no doubt be central to today's AJM iron ore conference in Perth, where today's speakers include Roy Hill Holdings chief executive Barry Fitzgerald, Gindalbie Metals managing director Tim Netscher, Atlas Iron boss Ken Brinsden, departing BC Iron managing director Mike Young, Mt Gibson chief executive Jim Beyer, Brockman Mining chief executive Russell Tipper and Christian Johnstone from Kerry Stokes' Iron Ore Holdings.
Something from offshore that’s not Cyprus related.
US government-owned Freddie Mac has sued Bank of America, UBS, JPMorgan Chase & Co and at least 12 other banks over alleged manipulation of the London interbank offered rate, saying the companies’ conduct caused the mortgage financier substantial losses.
Freddie Mac accuses the banks of acting collectively to suppress US dollar Libor to "hide their institutions’ financial problems and boost their profits", according to a complaint filed in federal court in Alexandria, Virginia.
"Defendants’ fraudulent and collusive conduct caused USD LIBOR to be published at rates that were false, dishonest, and artificially low," Richard Leveridge, a lawyer for Freddie Mac, said in the complaint, which was made public today.
Manipulation of interest rates by some of the world’s biggest banks has spawned probes by half a dozen agencies on three continents in what has become the industry’s largest and longest-running scandal. More than $US300 trillion ($289 trillion) of loans, mortgages, financial products and contracts are linked to Libor.
The big banks also had a rough start to the day, with all of the big four opening more than 1 per cent down. The losses have moderated now:
- CBA is 0.62% lower to $68.75
- ANZ is 0.68% lower to $27.64
- NAB is 0.98% lower to $30.24
- Westpac is 0.7% lower to $29.65
Investors liked the David Jones profit result, despite the retailer posting a 13.5 per cent dip on first half profits. The company's shares climbed as much as 5.74 per cent in early trade, but have settled back to a 3.38 per cent gain, at $3.06.
But there are some companies holding up in early trade. Here are the early gainers on the ASX50:
- Newcrest: +1.29%
- Amcor: +1.18%
- Sydney Airport: +0.95%
- Asciano: +0.67%
- Brambles: +0.6%
The worst performed companies on the ASX50 in early trade include:
- Rio: -3.1%
- FMG: -2.83%
- AMP: -2.56%
- BHP: -2.52%
- WorleyParsons: -2.12%
- QBE: -1.59%
Looking now at the sector-by-sector performance on the ASX200:
- Materials: -1.6%
- Energy: -0.93%
- Financials: -0.64%
- Consumer disc: -0.48%
- Consumer staples: -0.34%
- Industrials: -0.34%
The Australian share market has opened more than three-quarters of a per cent down.
The benchmark S&P/ASX200 index was down 42.1 points, or 0.84 per cent, at 4,945.3, while the broader All Ordinaries index was down 40.1 points, or 0.80 per cent, at 4,964.3.
On the ASX 24, the March share price index futures contract was down 47 points at 4,956, with 30,357 contracts traded.
The big miners are taking a battering early on the Goldman Sach iron ore predictions:
- BHP is 2.75% lower to $33.60
- Rio is 2.83% lower to $57.00 - lowest since November
- Fortescue is 3.86% lower to $3.74
The uncertainty stemming from the Cyprus vote is set to push investors back into safe haven assets, BBY institutional dealer Anson Rosewall said.
‘‘What’s been taking place in Europe has destabilised sentiments towards risk assets, and you are seeing that in the rotation back into safe haven assets like the US dollar and gold," Mr Rosewall said.
"Bond yields are coming back down as investors sell some of their stock holdings and rotate back into safe haven debt."
At the same time, Goldman Sachs' downgrading of iron ore price estimates was set to hit miners' stocks today.
"There’s definitely going to be a lot of attention focused towards that space. With Rio Tinto down 5 per cent in the US and BHP down 2 or 3 per cent, that’s likely to be where most of the damage will come from today."
Good comment from 'Geoff, Burraneer' to start the day:
Good one Goldman Sachs. Downgrade RIO after it has fallen from $72 to $58. Thanks for the tip. Where can I get one of these highly paid, expert, analysts jobs?
Something for the Yoga buffs among our readers.
Shares of Lululemon Athletica slid on the Toronto stocks exchange after the trendy retailer said it was recalling batches of pants it called too transparent, an embarrassment that raised fresh questions about whether it could sustain its stellar growth.
Late on Monday, Lululemon said it was pulling from its store shelves about 17 percent of the women's black pants made with its signature stretchy "Luon" fabric because the products fell short of technical specifications.
It warned that the recall of the see-through pants would have a significant impact on financial results.
The episode, the second quality issue disclosed in less than a year, could undermine Lululemon's reputation, said analysts who noted that competition from lower-priced brands is heating up. Last July, the company acknowledged problems with dye-bleeding in some of its apparel.
A quick note on the likely market action from Stan Shamu at IG Markets:
Before yesterday, the local market had not traded below 5000 since February 26. Many will be now questioning whether this is the beginning of a deep near-term correction.
However, the believers out there will be using this as an opportunity to get involved in equities they missed out on.
One of the key issues to keep an eye on today will be the performance of the iron ore names. Rio Tinto (RIO) fell 5.2% in London despite the iron ore price holding firm at $134.4 per tonne, with Goldman Sachs putting the stock on its conviction sell list.
The big news from overnight obviously focuses on Cyprus, and the parliamentary vote against the bank deposits tax.
The rejection, with 36 votes against, 19 abstentions and one absence, brought the east Mediterranean island, one of the smallest European states, to the brink of financial meltdown.
EU countries said before the vote that they would withhold 10 billion euros ($US12.89 billion) in bailout loans unless depositors in Cyprus shared the cost of the rescue, and the European Central Bank has threatened to end emergency lending assistance for teetering Cypriot banks.
But jubilant crowds outside parliament broke into applause, chanting: "Cyprus belongs to its people."
The main local news around this morning is further weakness at David Jones, with the retailer reporting first half profit has fallen 14 per cent to $73.5 million due to fewer sales and spending to improve its business.
David Jones made sales of $1.003 billion in the six months to January 26, down from $1.011 billion in same period the previous year.
Chief executive Paul Zahra said the company’s financial performance had been impacted by challenging retail conditions and spending on its business transformation plan.
Mr Zahra said the company was focused on improving our sales, profit margins and staff productivity.
It is also looking at ways to make the most of the value of the buildings that house its flagship stores in the Sydney and Melbourne CBDs, while retaining ownership of its retail space.
As we reported in this mornings need2know, iron ore stocks are likely to come under pressure today after Goldman Sachs cut its estimate for iron-ore prices this year on expectations demand will moderate and steel production will slow in China, the world’s largest buyer.
Iron ore may average $US139 a metric ton, compared with a previous estimate of $US144, analysts Christian Lelong and Jeffrey Currie wrote in a report today. The bank has a neutral outlook on the commodity and prices may be supported at about $US140 by the need for high-cost Chinese mine production to balance the market in 2013, the report showed.
Rio Tinto Group, the world’s second-largest iron-ore exporter, fell the most in 16 months in London trading after Goldman cut the stock to conviction sell from neutral.
For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key markets numbers:
- SPI futures are 25 points lower at 4965
- The $A is lower at $US1.0366
- In New York, the S&P500 was 0.2% lower at 1548.34
- In Europe, the FTSE100 lost 0.26% to 6441.32
- China iron ore lost 20 US cents to $US134.40 a metric tonne
- Gold added 0.4% to $1,611.30 an ounce
- WTI crude oil slid $1.58 to settle at $92.16 a barrel
- Reuters/Jefferies CRB index lost 0.45% at 293.43
Hi everyone. Welcome to the Markets Live blog for Wednesday.
Contributors: Thomas Hunter, Max Mason
This blog is not intended as investment advice
BusinessDay with agencies
