That's all for today. Here's our evening wrap of today's session.
Credit Suisse, the second- biggest Swiss bank, reported a profit for the fourth quarter that missed estimates and increased its cost-cutting goal.
Net income amounted to 397 million Swiss francs ($420 million), compared with a loss of 637 million francs a year earlier. Earnings missed the 647.6 million-franc mean estimate of 11 analysts surveyed by Bloomberg.
Chief executive Brady Dougan today increased the bank’s cost-cutting program by 400 million francs by the end of 2015, on top of 4 billion francs in reductions already announced since 2011. A rebound in financial markets would help the company boost earnings this year, Morgan Stanley analysts said.
Here's what you need2know this Thursday afternoon
- The ASX200 adds 0.3%, continuing yesterday's rally
- The dollar slides a near four-month low, at $US1.0324
- The Nikkei is down 0.9%, Hang Seng down 0.3%, Shanghai down 1.4%
- Wall Street futures are about 0.1% higher; FTSE100 futures are flat
- Gold flat at $US1680.10, while WTI oil flat at $US96.74
- NAB hits two-year high on brighter outlook
- Jump in mobiles drives Telstra profit
- Top end tax utopia all right for Rinehart
- Next blow for Tinkler as Maules Creek delayed
- Jobless rate holds steady as part-time jobs slump
- Watchdog's 'reservations' on Virgin's Tiger deal
- US jobless claims
- US consumer credit
- France trade balance
- UK trade balance
- Newcrest Mining (FY); Expected: Net profit: 306m; Div 12c
Here's a look at the best and worst performers on the ASX200 today:
Among the sectors, materials jumped 0.5 per cent, financials rose 0.3 per cent and telecommunications gained 1.2 per cent. Consumers discretionary and energy bucked the trend, down 0.5 per cent and 0.1 per cent respectively.Back to top
Despite a weak start, the market has finished higher, with the benchmark S&P/ASX200 adding 14.7 points, or 0.3 per cent, to 4935.7, while the broader All Ords gained 15.3 points, or 0.3 per cent, to 4955.8.
The Australian dollar is expected to be well supported in the months ahead thanks in part to a lack of high yielding alternatives, even as the RBA could resume easing this year.
A Reuters poll of 52 analysts put the dollar at $US1.0400 until August, before edging slightly lower to $US1.020 by this time next year. It last traded at $US1.0316.
But the forecasts ranged from a low of $US0.85 to a high of $US1.1200 for the 12-month view, suggesting the usual uncertainty in the outlook.
The Aussie's strength is one reason why economist expect the RBA to cut its cash rate by 25 basis points to a historical low of 2.75 per cent later this year, while swap rates show some risk of a move to 2.5 per cent.
Tony Abbott might be trying to downplay a bombshell "discussion paper" aimed at creating a tax utopia at the top end of Australia but mining magnate Gina Rinehart won't be, writes BusinessDay's Adele Ferguson.
The proposals detailed in the 30-page document sing from the same songsheet that Rinehart and her father Lang Hancock have been playing for decades.
The fact that the coalition has gone to such lengths to create a discussion paper speaks volumes about the growing political influence of Rinehart and her lobby group Australians for Northern Development and Economic Vision (ANDEV), which she formed in 2010, around the time the mining tax was about to be hijacked.
The notion of a special economic zone with special tax and regulatory concessions dates back to the 1950s when Hancock was trying to overturn legislation that banned exports on iron ore. It took him almost a decade to get the ban lifted and pegging rights granted.
After reporting strong growth in its earnings earlier today, Telstra is up 1.4 per cent. Over the last 12 months, Telstra has continued to climb, reaching its highest levels since 2008.
Xero's gain is Reckon's pain, earlier this week, Reckon's 2012 profit growth failed to inspire, even though earnings a share rose to 13.4 cents from 12.1 cents, with analysts warning of a step change in technological delivery resulting in clients shifting away from the Australian accounting software group.
Xero, a Kiwi start up which has made its founders tens of millions of dollars already, has an online product offering which is rewriting the rules of engagement in what has been a fairly profitable market for accounting software groups.
Xero earlier today said its revenues are now running at $NZ4 million a month, putting it on track to double revenue in the year to March.
Already, customer numbers have hit 135,000, with the big growth coming in Australia, where it now boasts 40,000 customers, up from 16,000 last March, as it takes a bite out of the client base of both Reckon and MYOB.
Analysts are advising clients to hold back from committing fresh funds to Reckon given the changing industry dynamics, while Xero, which listed on the Australian stock exchange late last year, remains difficult to recommend since it is still effectively in start-up mode.
In afternoon trading, Reckon was down 2 cents at $2.38 with Xero easing 11 cents to $5.63.Back to top
Here's an interesting graphic seen in tweet from Matt Cowgill of the Australian Council of Trade Unions.
Is this the biggest disconnect between consumers' expectations and the actual state of the economy? twitter.com/MattCowgill/st…— Matt Cowgill (@MattCowgill) February 7, 2013
On the face of it, today's labour force statistics are more of the same, writes BusinessDay's Michael Pascoe.
The unemployment rate steady at 5.4 per cent, employment and unemployment up a bit, participation rate down a notch, hours worked off a little – but there's more happening under the surface as our labour market absorbs increased population growth and cuts interest rates.
With demand for labour remaining soft, the impact of our increasing population growth means the Reserve Bank's forecast of unemployment edging higher remains on track.
Australia can keep adding a few more jobs each month – a few more than the market tipsters expected in this month's tipping competition – but the explicit guidance from governor Stevens on Tuesday was that increasing unemployment will keep inflation tame over the next couple of years even as the impact of our strong dollar wanes.
Queensland flood victims will be given free advice on how to deal with insurance companies.
Attorney-General Jarrod Bleijie says they’ll also be able to replace legal documents, such as birth certificates, free of charge.
‘‘We are really wanting to make it as easy as possible because once people start going into their homes, and realising exactly what they’ve lost and what can’t salvaged, they need a little help,’’ he told ABC radio.
‘‘They have legal rights and sometimes they need someone else fighting their battle in this regard.’’
Another one on the jobs data, this time regarding the ever falling participation rate, which in January slipped from 65.1 per cent to 65 per cent:
CommSec chief economist Craig James says the fall in the participation rate could also suggest that "a lot more of the younger workforce are opting for higher education given the sluggish labour market".
"And as activity levels pick up and employers are keener to hire, the participation rate is likely to also to rise," James said.
"Overall the job market has softened somewhat given caution about the global economy, but not dramatically so. The smart employers are not shedding staff, rather showing greater flexibility in hiring of staff and the number of hours worked by existing staff."
And some more on the participation rate:
If the Aust participation was still at its 2011 average of 65.5% rather than 65%,the unemployment rate would have been 6.1% in Jan, not 5.4%— Shane Oliver (@ShaneOliverAMP) February 7, 2013
Gambling advertising during sports will be subject to a federal parliamentary inquiry.
Anti-gambling campaigners Greens senator Richard Di Natale and independent senator Nick Xenophon secured Senate support for the Joint Select Committee on Gambling reform to hold an inquiry on the issue.
The committee will report back to parliament on May 16.
The inquiry will examine in-ground and broadcast advertising, sponsorship, in-game promotion and will consider the harm to children.
It will also look at spot betting, promotion of odds and the impact on problem gambling.Back to top
The Australian economy continues to be patchy but small to medium businesses appear to have turned the corner, Telstra chief executive David Thodey says.
Telstra, which added more than 600,000 new local mobile customers in the last six months of 2012, said it had experienced an improvement in sentiment in January as businesses made more investments.
‘‘The general sense of the economy is it’s still patchy,’’ Mr Thodey said today. ‘‘We’re seeing a little bit more life in small to medium business.’’ Telstra’s own surveys revealed more confidence appearing in that sector.
‘‘Consumer confidence was a little bit slower going into Christmas, but January was strong and in the enterprise market you’ve still got companies making big investments.’’
It may be a minnow who's share price has already had a strong run over the past month, but UBS reckons K2 Asset Management shares could run to as high as 90 cents given its leverage to a rising sharemarket and as it continues to benefit from a strong investment performance.
We pointed yesterday to the big profit upswing the fund manager enjoyed in the December half, thanks to a big lift in performance fees which more than offset a decline in management fees.
Good news includes a rise in funds under management in January, the first since last March amid expectations that all of the fund managers funds are now back at their previous high water marks.
"The return of performance fees gives us greater confidence that the second half of FY13 provides a significant revenue opportunity that, if the recent market improvement can be maintained, will see KAM in a strong position to recover lost earnings," the broker told clients this morning.
"KAM provides the greatest leverage in the sector to improving market conditions given all KAM’s funds attract performance fees in addition to management fees.
"As a result of the sooner than expected re-emergence of performance fees ... along with the recent strong FUM update we have upgraded our earnings forecasts by 50.3 per cent in FY13, and 9.2% in FY14. We retain our Buy recommendation with a revised price target of $0.90 (previously 70 cents).
Its shares are up another 12 per cent at 65 cents.
We all know that money doesn't buy happiness, don't we? That's what economists have been saying for decades.
Turns out that once again the economics establishment got it spectacularly wrong. Economic growth – and the higher gross domestic product (GDP) per person and improved wages that usually accompany it – does actually improve happiness and well-being, according to several recent papers by top economists,
One especially brilliant piece of research – by Daniel Sacks, Betsey Stevenson and Justin Wolfers, all US academics – demonstrates that happiness improves as incomes rise.
The paper shows that richer citizens report higher well-being than their poorer compatriots, at any given point as well as over time; that people in richer countries are happier than those in poorer countries; and that GDP growth boosts well-being.
Most remarkably of all, there is no maximum wealth threshold at which point higher incomes cease to boost well-being: quite simply, the richer, the better, with no upper limit.
Here's the whole article, including a lot of sceptical comments
Leighton Holdings subsidiary John Holland has won a $186 million contract extension for work on an iron ore port being built for Rio Tinto.
John Holland is currently building the Cape Lambert Port B wharf in the Western Australia’s Pilbara region, and under the new contract will extend the wharf to include an additional two berths.
The work is being carried out as part of Rio Tinto’s iron ore operations expansion.
Shares in Leighton Holdings are down 0.6 per cent to $20.24.
Nikon, Japan’s third-biggest camera-maker, plunged the most since 1985 in Tokyo trading after cutting its profit forecast because of slowing demand in Europe and falling prices.
The company dropped as much as 19 per cent to 2,139 yen, headed for the lowest since November. 21. The stock now trading 18.6 per cent lower at 2,156 yen, the biggest decline among members of the Nikkei 225 Stock Average.
Net income will probably be 38 billion yen in the year ending March, compared with a previous forecast of 60 billion yen, the company said.Back to top