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Markets Live: Shares close at 2012 high

That's all for today, folks - thanks everyone for reading this blog and posting your comments.

Here's our evening wrap of today's session.

The financial regulator has cautioned banks about keeping customers’ financial data overseas, as the sector eyes cost savings in a bid to bolster slowing profits.

Westpac, NAB and ANZ Bank all carry out some of their back-office functions overseas, sparking concerns from unions and politicians over the privacy risk to consumers.

Now the Australian Prudential Regulation Authority has identified ‘‘offshoring’’ as a key area of weakness in banks' data management policies.

Some noteable movers today:

  • Lend Lease shares rose 2.2 per cent after the company said it was selected as preferred bidder for a $1 billion revamp of Sydney's Darling Harbour convention centre and entertainment centres.
  • Shares in engineering firm Downer EDI jumped 5.2 per cent to $3.65 after the company reached a negotiated settlement on a Singapore tunnel dispute and agreed to pay $S50 million.
  • Linc Energy told the ASX in response to a query it had no explanation for the 17.5 per cent surge in its shares today. Linc said it has provided updates on its Carmichael coal project and clean energy technology in recent days.
  • Investors shied away from recent strong gains for high-yielding stocks, sending Telstra down 0.7 per cent. It was the most actively traded stock.


Back to the mixed messages - sharemarket strong, economy weak: Australia’s hiring pace is expected to remain at its lowest level in over three years, research shows.

The Manpower Employment Outlook Survey for first quarter 2013 shows that employer hiring intentions are at their lowest level since third quarter 2009.

AMP Investments chief economist Shane Oliver says the results of the survey are not surprising given other economic data also suggest the economy is softening.

‘‘It’s consistent with what we’ve seen with other indicators,’’ he says. ‘‘The National Australia business confidence survey out today was at its lowest level since April 2009, job advertisements measured by the ANZ and skilled jobs measured by the government have been falling for last eight or nine months.

‘‘The Reserve Bank hasn’t done enough yet,’’ he notes.

Back to the local market. Here's how some of the blue chips performed today:

  • BHP: +1.3%
  • Rio: +0.8%
  • ANZ: +0.2%
  • CBA: +0.6%
  • NAB: +0.5%
  • Westpac: +0.4%
  • Fortescue: +4%
  • Woolies: +0.5%
  • Wesfarmers: +0.1%
  • Telstra: -0.7%

The miners have been on a roll in recent days, buoyed by stronger commodity prices, and are fuelling the market's rise.

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As the local market embarks on what can cautiously be called a Christmas rally, there are a number of potential spoilsports around. The Federal Reserve meeting that starts overnight is one. Another is the Italian political situation, which is shaking some confidence at the open of the fixed-income market as 10-year yields approach 5 per cent, IG Markets analyst Chris Weston notes:

  • It is an interesting and perhaps testing time to hold Italian paper, not to mention with its planned auction of €6.5 billion of one-year bills tomorrow and €3.5 billion in three-year bonds on Thursday, at a time when traditionally liquidity is thin.
  • In the short term though, the budget is scheduled for debate in the senate next week and potentially will be approved prior to Christmas, and most expect this to cause a few problems.

The materials sector led the charge today, rising 0.9 per cent, while energy gained 0.4 per cent and financials added 0.3 per cent. Telcos were the biggest loser, falling 0.7 per cent.

The sharemarket has closed at the highest point of the year. The benchmark S&P/ASX200 rose 18.1 points, or 0.4 per cent, to 4576, while the broader All Ords gained 18.9 points, or 0.4 per cent, to 4581.3.

Australia is falling behind other nations in terms of women in corporate and political leadership positions, a new study by the ABS shows.

ABS director Jane Griffin-Warwicke said while women made up just over half of Australia’s population, only 3.5 per cent of ASX 200 companies had a female CEO, and only 12.3 per cent of corporate board directors were women.

Australia faces a slowing economy that will require some fine-tuning of its labour market framework after producing one of the highest rates of employment growth in the industrialised world, a global agency says.

The Organisation of Economic Co-operation and Development report released today says labour market reforms over the past 15 years have boosted employment and cut welfare dependency.

But more effort is needed to help disadvantaged jobseekers get back to work and address the high number of people in part-time work who want full-time jobs.

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Neither renewed concerns over Italy or problematic Chinese trade data in the last few days could stop the market taking commodity prices higher, CMC Markets trader Ben Taylor says:

  • The main reason for the buying is the FOMC meeting where traders are desperately trying to predict the Fed’s next course of action.
  • Another reason for buying commodity based markets is the belief that early next year we could see a new round of Chinese stimulus.
  • Any further stimulus is positive for commodity’s which moves have manifest themselves into a higher materials sector of late.
  • It seems the Christmas rally is about getting ahead of the FOMC meeting and staying ahead of any potential Chinese stimulus early next year.

Investors will be starting to turn their attention towards the two-day Federal Reserve meeting, which begins in Washington overnight.

The Fed is expected to announce it will buy $US45 billion per month of longer-dated Treasuries beginning in January to replace the current Operation Twist program, which expires at the end of December.

Under the program, it sells shorter-dated US government debt and buys longer-dated Treasuries to extend the duration of its balance sheet.

Small businesses in Western Australia's Pilbara region such as shops and pubs are so desperate for workers, that a local council has declared it needs to employ foreign staff.

The council has written to federal Immigration Minister Chris Bowen, flagging its intention to apply for a Regional Migration Agreement.

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Central banks should be prepared to take the heat out of asset price booms, rather than relying on lower interest rates to "clean up" the mess after bubbles burst, Reserve Bank governor Glenn Stevens says.

Over the past two decades, economists have debated the merits of central banks "pricking" asset price bubbles by raising interest rates.

While some argued central banks should "lean" on bubbles in the interest of financial stability, others countered that doing so raises greater risks for an economy.

In closed-door remarks from August that were only publicly released today, Mr Stevens said the debate had moved on "some way towards doing a bit more leaning."

"I would have thought that by this point we have to conclude that simply expecting to clean up after the credit boom is not sufficient any more; the mess might be so large that monetary policy ends up not being able to do the job when the time comes," Mr Stevens said.

In a sign the Reserve remains wary the long-term dangers of very low interest rates, Mr Stevens also said that slashing rates to aid other parts of the economy "might leave its own toxic consequences."

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Linc Energy has been slapped with a 'please explain' by the ASX for its recent share surge, which has taken the stock from 81 cents on Friday to $1.05 today.

Linc said it wasn't aware of any reason for its rise in popularity.


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China’s banks lent more slowly than markets expected in November while the pace of total financing eased, but analysts said the economy remains on track for a modest recovery.

Chinese banks extended 522.9 billion yuan ($A79.3 billion) of new local currency loans in November, the central bank said, missing market expectations of 550 billion yuan.

‘‘We think the monetary policy is still loose, and [authorities] will maintain the current loose stance for the next several months. That is strong enough to keep the economic recovery on track,’’ said Zhang Zhiwei, China economist at Nomura in Hong Kong.

‘‘We don’t think the government needs to cut interest rates. Most likely they will just keep the ongoing credit loosening.’’

There's possibly bad news on the way for the prices of Australian staples bread and beer, with Abares predicting a 20 per cent hike in the price of wheat.

The free-on-board Gulf price of US hard-red winter wheat - the "world indicator price" - may average $360 a tonne in the year to June 30 from $299 a tonne a year earlier, the Canberra-based Australian Bureau of Agricultural and Resource Economics and Sciences said today.

World trade may drop 9.7 per cent to 131 million tons on reduced supply, it said. Prices in Chicago have climbed 30 per cent this year.


Singapore has topped Hong Kong as the most desired place in Asia for ‘‘mobile millionaires’’ to live with quality of life cited as the main attraction, a RBC Wealth Management survey says.

Almost a third of the millionaires in Asia who live, work or spend more than half their time outside their counties of origin prefer Singapore, while 24 per cent pick Hong Kong.

“Singapore always has this quality as a safe haven, not just for your money, but also for your family,” said Wai Ho Leong, a senior regional economist at Barclays in Singapore.

In August BusinessDay reported that Gina Rinehart had spent $S57 million ($A43.8 million) on two units, off the plan, in the Seven Palms Sentosa Cove condominium project. It was also thought that Nathan Tinkler was a budding Sentoa Cove resident too.

Bill Shorten has joined the debate kicked off by media reports about a memo from Leighton Contractors to staff on Chevron’s $US52 billion Gorgon project telling them that they could not sit down.

The Workplace Relations Minister said that in his experience of Australian workplaces most people work hard, and ‘‘don’t need advice about whether they should sit down or stand up".

‘‘Presumably the person that typed up that communications document was sitting down when they [wrote] it,’’ Mr Shorten said.

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Some more on the confusion over just how gloomy the business outlook actually is:

While the NAB business confidence index fell from minus 0.9 points to minus 9.2 points in November, hitting its lowest since the peaks of the global financial crisis, the Roy Morgan business confidence survey is more positive. It showed a lift from 114.0 to 116.8 in November.

The $64 million question is whether the NAB survey is accurately describing conditions across Australia, CommSec chief economist Craig James says:

  • The Roy Morgan business survey covers 2800 firms, rather than just 600, and it showed a lift in business confidence in the latest month. But a problem for analysts is that few would have the $18,500 necessary to review the results of the Roy Morgan survey over a 12-month period.
  • The mixed survey results are confusing for analysts and policymakers alike. On the one hand we have a survey suggesting business confidence is back at the GFC levels, and another survey suggests that confidence is not far off the best levels in a year.
  • The Roy Morgan survey seems to better line up with macroeconomic indicators and consumer confidence readings, but it has been in operation for only 2½ years, while NAB’s goes back to 1997.
  • Simply, the Reserve Bank will need more information before deciding on another rate cut. And the February meeting is some time away.
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