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
Markets
- 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
News
- 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
Overnight
- US jobless claims
- US consumer credit
- France trade balance
- UK trade balance
Tomorrow
- Newcrest Mining (FY); Expected: Net profit: 306m; Div 12c
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.
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.
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.
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.
Into the second half of the trading day, here's how markets around the region are performing:
- Nikkei(Japan): -1%
- Shanghai: -0.8%
- Taiwan: +0.3%
- South Korea: flat
- Singapore: -0.4%
- New Zealand: -0.1%
The largest builder in NSW, Mirvac, has been forced to write down some Queensland and Western Australian residential projects by $273.2 million, reflecting the tough housing markets and bad weather in the past two years.
Investor reaction was swift with the securities down 2.7 per cent to $1.56.
It was the first major action taken by the recently-appointed chief executive Susan Lloyd-Hurwitz as part of the group’s quarterly review of its operations. It comes a week before Mirvac releases its profit for the six months to December 31, 2011.
Ms Lloyd-Hurwitz said today at an investor briefing that while it was disappointing to make the write down it was necessary for transparency purposes.
The receivers of collapsed finance house Banksia Securities expect to accelerate future payments to debenture holders after generating strong interest in lender’s $270 million lending book.
Receiver McGrathNicol is also examining its legal options to determine whether further funds can be recovered for debenture holders from third parties.
This includes questioning ‘‘a number of individuals’’ in the Victorian Supreme Court to gauge whether recovery action should be commenced. McGrathNicol did not name the people it planned to interview.
Banksia, a rural lender which operated mostly in Victoria, collapsed in October taking with it hundreds of millions of dollars.
The dollar is oscillating nearly as much as the sharemarket: after initially rising on the jobs report the currency then fell as low as $US1.0296 before heading back to about where it was before the data was published - to $US1.0309.
CMC foreign exchange dealer Tim Waterer says markets were disappointed to see full-time employment fall by 9800 in the month, with the rise in total employment entirely due to an increase in part-time jobs.
‘‘What happened in the currency market was the immediate move was higher but once traders had an opportunity to look a bit deeper into the numbers we saw the Australian dollar fall to its session lows,’’ Waterer says.
He thinks the dollar is likely to remain under pressure for the remainder of the local session.
‘‘We’re seeing a bit of an indifferent performance by equity markets across Asia so I would expect the Aussie could drift a bit lower this afternoon."
Most analysts still suspect the jobless rate will continue to creep higher given sluggish domestic demand and the competitive pressures of a historically high currency.
"The headline numbers weren't too bad, but we would argue that the underlying details are rather soft," says Su-Lin Ong, a senior economist at RBC Capital Markets.
"The numbers are probably consistent with the Reserve Bank's view that the labour market will deteriorate further, though at face value the pace of deterioration is not all that significant. It's consistent with their bias to ease but possibly waiting for some more data and not a huge urgency."
After cutting rates in October and December, the Reserve Bank held steady at 3 per cent this week, citing signs past cuts were slowly working their magic on the economy.
But investors still expect at least one more easing.
Interbank futures imply a 50-50 chance of a cut at the RBA's next policy meeting in March, while swap rates show some risk of an eventual move to 2.5 per cent.
There is something for everyone in the latest jobs data, says CommSec economist Savanth Sebastian:
- The optimists could focus on the rise in overall employment and conclude all is fine. The pessimists would look at the third consecutive fall in full-time jobs coupled with the fall in hours worked and conclude something more concerning.
- What is clear is the job market isn’t shooting the lights out but by no means is unemployment soaring.
- In a big picture sense the job market is in a holding pattern with a modest degree of softening.
- Yes, it was encouraging that employment grew but more forward looking indicators like job advertisements have suggested that further labour market gains may be more circumspect. In fact internet and newspaper job advertisements have fallen for 11 consecutive months, suggesting job growth is likely to flat line in coming months.
The ANZ says the unempoyment rate would have risen if it hadn't been for a fall in the participation rate. In a note, ANZ economists said:
Today’s labour force data provided further evidence that Australian labour market conditions remain relatively subdued. Employment growth was not enough to keep up with population growth and further weakness in the participation rate – in part due to discouraged jobseekers giving up job search – helped to prevent a rise in the unemployment rate in the month. Full-time employment growth is weak and average hours worked continued to decline in trend terms.
More weakness ahead? Perhaps, but it won't be drastic, says HSBC. HSBC Australia chief economist Paul Bloxham said figures showed the labour market was more resilient than many believed.
‘‘This certainly suggests that the labour market might be a bit tighter than many commentators have been touting and have been concerned about,’’ he said.
‘‘We remain of the view that policy setting and global conditions are conducive for a pick up in local growth, so the steady jobs market is consistent with that view.’’
Here are the state by state number for the jobless rate.
Unemployment in New South Wales remained steady at 5.1 per cent. Victoria, however, experienced a big rise in joblessness, from 5.6 per cent to 6.1 per cent, while Queensland fell from 6.1 per cent in December to 5.5 per cent in January.
Elsewhere, South Australia's jobless rate climbed from 5.8 per cent to 6.1 per cent, WA fell from 4.3 per cent to 4 per cent and Tasmania rose from 7.4 per cent to 7.8 per cent.
For every good set of economic data there seems to be a setback: businesses have recorded their toughest three months of trading since the Australian economy was emerging from the depths of the global financial crisis (GFC), a survey shows.
The National Australia Bank’s quarterly business survey shows both conditions and confidence deteriorated to levels not seen since the first half of 2009.
Business confidence fell to an index level of minus five in the December quarter, the weakest result since the three months to March 2009, while conditions slumped to minus six, a level not seen since the June quarter of 2009.
The negative index readings indicate the number of businesses that believe conditions worsened during the quarter outnumber those that believe conditions improved, and that pessimists outnumber optimists about the outlook for early 2013.
NAB said it appeared concerns about the state of the economy had outweighed any positive effect from recent interest rate cuts.
Downside to the employment data: the new jobs are mainly part time - 20,200 new part-time jobs, as 9800 full-time jobs are lost.
The dollar has risen on the better than expected jobs figures to touch the day's high of $US1.0332.
And here are the numbers: the unemployment rate stays out at 5.4 per cent, with 10,400 new jobs created.
Jobs numbers coming up: the unemployment rate is expected to rise to 5.5 per cent, from 5.4 per cent, but 6000 new jobs are tipped.
The dollar is currently buying $US1.0322.
In case you missed an earnings report this season, here's our special index.
NAB is still one of the strongest blue chips on the market today, rising 1.1 per cent to two-year highs after the bank reported a rise in cash earnings on the back of lower bad debts.
‘‘The strong start to the year supports our positive view on NAB and the bank is on track to a fiscal year 2013 profit of around $6 billion,’’ Morningstar analyst David Ellis says.
In all the reams and reams of numbers released by Telstra today with its December half earnings, shareholders only need to focus on just one: earnings a share.
For the half, it came in at 12.8c - less than the 14c a share interim payout.
All of the hyperventilating by some analysts about a big pay-off for Telstra shareholders thanks to the deal with the Federal government paving the way for the roll-over of Telstra's copper wire network to the national broadband remains just that for the time being, especially since it faces some big bills bidding for more spectrum from Canberra.
Until the dividend is covered by earnings, then shareholders should treat all of the talk of one-off capital returns or share buy-backs as just that - talk.
Shares in Whitehaven have now fallen 14 per cent this year, after a substantial earnings downgrade for 2012-13, wiping off much of the gain surrounding speculation that Chinese miner Shenhua could be interested in mounting a takeover bid for the company, or could acquire the 19.4 per cent stake held by the largest shareholder Nathan Tinkler.
At today’s prices Mr Tinkler’s stake is worth $598 million. As Fairfax Media reported last December, Mr Tinkler is believed to have total debts to hedge fund Farallon Capital, including principal and interest, of about $700 million.
Investors don't like the Australand result. The company's shares are now 2.1 per cent lower to $3.42.
Australand Property Group has announced its results for the full year ended 31 December 2012, which show the the Group recorded an operating profit after tax of $142.1 million, a 5 per cent increase on the prior corresponding period.
In a release to the ASX, the company announced a net profit after tax of $180.0 million, and distributions per security of 21.5 cents.
Australand’s Managing Director, Bob Johnston said:
“Our office and industrial investment portfolio continued to deliver growth in recurrent earnings for the Group underpinned by comparable rental growth and income from new developments.
“Despite the generally cautious market sentiment, our Residential earnings increased 16% and contracts on hand at year end were up by 24%, providing good momentum into 2013.
“Overall, the Group is pleased to be able to report an increase in operating earnings for the full year demonstrating the resilience of the Group’s business model and the quality of its operating platform.”
Australia’s construction sector contracted further in January, marking the industry’s 32nd consecutive month in decline.
The Australian Industry Group (Ai Group) and Housing Industry Association’s (HIA) performance of construction index (PCI) fell 2.6 points to an index level of 36.2 in January.
An index level below 50 indicates the sector contracted during the month.Ai Group director of public policy Peter Burn said weakness in residential construction meant the sector was likely to remain in a slump.
‘‘The impacts are being felt not only by the businesses and employees directly involved in the industry but also across the broader economy as industries in both the services and manufacturing sectors feel the pinch for the prolonged sluggishness in house, apartment and commercial building,’’ he said.
An insight on sharemarket sentiment from AMP's Shane Oliver:
"Bull mkts r born on pessimism, grow on scepticism, mature on optimism and die of euphoria". Sir John Templeton. I suspect we r between 2 & 3
— Shane Oliver (@ShaneOliverAMP) February 6, 2013
Looking at the early gainers on the ASX200:
- Mesoblast: +6.11%
- Northern Star: +2%
- Henderson-CDI: +1.88%
- Amcor: +1.62%
- NAB: +1.39%
- Billabong: +1%
Sector by sector on the ASX200:
- Telecoms: +0.72%
- Health: +0.49%
- Financials: +0.14
- Consumer disc.: -1.04%
- Energy: -0.99%
- Industrials: -0.51%
- Consumer staples: -0.46%
Whitehaven shares are the worst performed on the ASX200 in early trade - down 5.96 per cent - after the federal government deferred a decision on Whitehaven Coal’s controversial Maules Creek mine, in the NSW Gunnedah Basin, until the end of April.
The proposed open cut mine, one of three coal projects within the Leard State Forest, was approved after a two year process by the NSW Government last August but awaits federal approval under the Environment Protection and Biodiversity Conservation Act. A decision on expansion of its adjacent Boggabri mine, a joint venture with Japan’s Idemitsu, was also deferred.
A statement on the reasons for the deferral is expected shortly.
NAB shares are 1.4 per cent higher in early trade and Telstra shares are 0.8 per cent higher.
The market has opened relatively flat, the benchmark S&P/ASX200 is down just 2.4 points to 49.18.6, while the broader All Ords is down 1.9 points to 4938.6.
Property developer and owner Australand’s full-year profit has risen by 28 per cent and the company expects further earnings growth in 2013.
Australand has $2.3 billion in investments in residential, commercial and industrial properties, and also develops large-scale residential projects.Its net profit in the year to December 31 was $180 million, up from $140.6 million in the previous corresponding period.
Earnings from its investment properties were up eight per cent, and the value of its portfolio rose by $51.3 million.
In the US, Dell unveiled more details of founder Michael Dell's proposed $US24.4 billion buyout overnight, confirming that the billionaire chief executive will pony up $US500 million of his own cash in return for a larger share of the company he created.
The world's No. 3 personal computer maker broke down details of the debt financing secured for the buyout, including $US4 billion in senior secured term loans from Bank of America , Barclays, Credit Suisse and RBC.
On Tuesday, the company announced that Michael Dell had struck a deal to take the company private in the biggest leveraged buyout since the financial crisis, partnering with the Silver Lake private equity firm and Microsoft Corp to try to turn around the struggling computer company without Wall Street scrutiny.
Whitehaven says it is "extremely disappointed" with the federal government's decision to defer the decision on Whitehaven's Maules Creek open-cut coal mine near Boggabri for another three months.
"We have spent many months working with SEWPAC and Minister Burke's office to promptly and thoroughly address any questions they have had in relation to the project, as well as providing full details of the benefits to the region," Whitehaven managing director Tony Haggarty said in a statement this morning.
"Whitehaven is not aware of any substantive issues with the environmental evaluations or process which has been followed," Mr Haggarty added.
"We look forward to understanding the reasons for Minister Burke’s decision to extend the process and will address, as a matter of urgency, any questions or input from Minister Burke or SEWPAC."
The ACCC has indicated it has serious reservations about approving Virgin Australia’s bid to take control of Tiger Australia because it will effectively return the country to an airline duopoly.
Releasing a so-called ‘‘statement of issues’’ today, the competition tsar, Rod Sims, said the regulator’s preliminary view was that the proposed acquisition ‘‘may raise competition concerns in the market for Australian domestic air passenger transport services’’.
Mr Sims said the watchdog's concerns related to ‘‘the risk of muted competition following the reduction in the number of airline groups within Australia from three to two ... and the loss of Tiger Australia as an independently owned discount operator’’.
‘‘This potential reduction in competition arises as a result of the increased ability on the part of Qantas-Jetstar and Virgin Australia-Tiger Australia to coordinate their activities once Tiger Australia is no longer operating as an independent low-cost carrier,’’ he said.
However, Mr Sims said the competition regulator would take into serious consideration the impact of Tiger exiting the domestic market if the deal was not approved.
The lack of new buildings in Sydney and too many in Melbourne has led to a dramatic difference in office vacancy rates since July last year.
For Sydney the level has dropped to its lowest level in four year to 7.2 per cent from 8.1 per cent. In contrast, Melbourne has increased from 5.6 per cent to 6.9 per cent, its highest level in six years.
According to the Property Council of Australia’s Office Market Report for the six months to January, the prime and A-grade offices are in hot demand, but anything of lesser grade is being passed over.
Nationally central business district, vacancy increased from 7.3 per cent in July 2012 to 8.1 per cent as at January 2013, with the six monthly net absorption number [net leasing] of 27,000 square metres being well below the historical (2000s) average of closer to 150,000sqm per half year.
Earnings from Tabcorp’s wagering business fell 28 per cent from the previous corresponding period but, it said, it grew in all key markets in what is a highly-competitive environment.
Retail TAB turnover fell in NSW and Victoria, reflecting the transfer to online betting and a soft retail environment, Tabcorp said.
But turnover in digital wagering grew by 16 per cent to $1.2 billion, reflecting the growing popularity of the company’s website and smartphone apps, Tabcorp said.
Earnings from the company’s media business, which owns Sky Racing, were up 0.4 per cent from the previous corresponding period to $27.5 million.
Higher costs in the Keno business offset most of its revenue gains in the first half of the financial year, resulting in earnings of $25.6 million, up 1.2 per cent from the previous corresponding period.
Melco Crown Entertainment, the casino venture of billionaire James Packer and a son of mogul Stanley Ho, said profit was little changed in the fourth quarter, hurt by costs for a Philippines project.
An article in the British newspaper The Times yesterday said the Chinese government was planning a crackdown on junket operators who bring high-rollers to Macau casinos and may also be linked to money-laundering. Gambling stocks, including Melco, fell on the report.
“We haven’t heard anything like that,” Lawrence Ho, Melco’s co-chairman and chief executive officer, said on a conference call today. “We continue to be very positive about this year. I think this year is definitely going to be better than last year.”
Melco Crown American depositary receipts fell 6.6 percent to $19.28 at 1:07 p.m. in New York after losing as much as 9.2 percent intraday. The stock has risen 20 percent this year in Hong Kong, outperforming Sands China’s 6.9 percent and Galaxy’s 8.7 percent gains. The benchmark Hang Seng Index climbed 2.7 percent in the period.
TabCorp has reported a net profit after tax of $72.9 million for the six months to December 31, with an interim dividend of 11 cents per share, down 2 cents per share.
The waging and gaming firm reported EBIT of $160.4 million, a 9.8 per cent fall.
‘‘Our key focus during the first half has been on successfully transitioning to the new gambling industry structure in
Victoria, and investing in those markets and products that can deliver growth,’’ Tabcorp chief executive David Attenborough.
‘‘Despite the challenges associated with significant change and soft external consumer trading conditions, TabCorp again demonstrated its capacity to grow. The revenue growth in the first half shows that customers continue to respond to the investments we are making in our products and channels, including ongoing innovation in digital.’’
Some more on NAB.
Cash earnings rose due to a three per cent increase in revenue, thanks to an improved performance in wholesale banking, NAB said.
‘‘This is a pleasing result, especially given operating conditions remain challenging both in Australia and the UK, notwithstanding recent improvements in financial markets,’’ chief executive Cameron Clyne said in a statement.
NAB’s profit in the year to September 30, 2012, fell by 22 per cent to $4.08 billion, due to massive costs associated with bad debts and restructure costs in its troubled UK businesses.
National Australia Bank’s first-quarter profit has fallen by 20 per cent due to lower values on some of its assets.
NAB’s unaudited net profit in the three months to December 31 was approximately $1.26 billion, it said on Thursday, down from $1.6 billion in the same period in the previous year.
The bank’s unaudited cash earnings in the three months to December were about $1.45 billion, up from $1.4 billion in the same period the previous year.
The main reasons for the difference between profit and cash earnings were losses on fair value and hedging impacts, NAB said.
Telstra posted first-half profit that matched analyst estimates as it added 607,000 mobile customers.
Net income rose 8.8 per cent to $1.6 billion in the six months ended December from $1.47 billion a year earlier, Melbourne-based Telstra said in a statement. That compares with the $1.6 billion median estimate of eight analysts surveyed by Bloomberg News.
Telstra’s faster fourth-generation mobile network, the biggest in Australia, is winning customers and limiting the impact of shrinking demand for traditional fixed-line services. Smaller rivals controlled by Vodafone and Singapore Telecommunications are revamping their businesses to try and regain market share.
We've got a reasonably busy day on the earning front, with News Corp already releasing their results in New York. More on that in a moment. Here's the other companies we're expecting:
- NewsCorp earning (Q2): Net profit - US1.001b; Div:US10c
- Tabcorp earnings (HY): Net profit: 93m; Div: 10c
- Telstra earnings (HY): Net Profit: 1.6b; Div: 14c
- National Australia Bank first quarter trading update
- Australand Property Group full year results
Instability in Europe has re-emerged as a factor pushing around market sentiment this week, and it's something that's been out of the headlines since towards the end of last year. It's been a welcome break. There was a time there when every headline contained the words 'Europe' and 'woes'.
The euro weakened as European Central Bank policy makers prepared to meet tomorrow amid renewed concern the debt crisis will worsen.
‘‘It feels like we’re starting a rotation of worry back to Europe again,’’ Sandy Lincoln, the Chicago-based chief market strategist in the US with BMO Global Asset Management.
‘‘This is a very fragile environment so whenever you have glass that’s out there that can break easily, people get themselves concerned.’’
The ECB ‘‘is not only governing a region which is still struggling to achieve growth but also has to cope with a currency which is at risk of becoming too strong,’’ Adrian van Tiggelen, senior investment specialist in The Hague at ING Investment Management, which oversees more than $400 billion, said in a note today.
‘‘If this trend continues the ECB may be forced to lower interest rates even further and, or, make a less conservative use of the printing press.’’
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 4 points higher at 4887
- The $A is higher at $US1.0317
- In recent trade in New York, the S&P500 was 0.077% lower at 1510.13
- In London, the FTSE100 rose 0.2% to 6295.34
- China iron ore added $US0.90 to $US155.10 a metric tonne
- Gold rose 48 cents to $US1677.55 an ounce
- WTI crude oil fell 20 cents to $US96.44 a barrel
- Reuters/Jefferies CRB index fell 0.4% to 302.91
Good morning folks. Welcome to the Markets Live blog for Thursday.
Contributors: Thomas Hunter, Jens Meyer, Richard Hughes, Max Mason
This blog is not intended as investment advice
BusinessDay with agencies
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