Copyright (c) 2004 Yahoo!AUNZ Inc. All rights reserved. http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/financenews/air_index.html Australasian Investment Review en-us Wed, 25 Nov 2009 20:07:03 GMT http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091007/27/293lj.html Fri, 20 Nov 2009 10:59:00 GMT The market is down 66. The SFE Futures were down 45 this morning.Wall St. down 94 overnight. The Dow was down 1 at best and down 170 at worst. Biggest fall in a month. Economic figures were in line with expectations. Oil finished down & #36;2.12 to & #36;77.46 and Gold slightly up - 70c to & #36;1141.90. The Aussie dollar fell to 91.96c versus 92.96c yesterday morning.Making the news today...Insurance Australia Group (IAG) down 6.5% after QBE Insurance (QBE) CFO Neil Drabsch told CNBC that when putting the numbers together on an IAG/QBE merger in current conditions, at any premium, & quot;would only give very modest earnings per share & quot;. Street Talk reported on Wednesday that QBE was again beginning to run the numbers over IAG. QBE up 10c to 2266c.Woodside Petroleum (WPL) down 2.08% after announcing costs associated with its Pluto LNG project would be higher than expected. It now predicts costs to increase by between & #36;672m and & #36;1.1bn, on top of the July 2007 estimate of & #36;11.2bn.Street Talk says there is talk out of London that Western Areas (WSA) could be the next takeover target. WSA's crown jewel, its Flying Fox mine in WA, makes it an obvious target for a larger player. WSA up 7c to 520c.Sims Metal (SGM) - Trading Halt - plans a fully underwritten capital raising of around & #36;400m via a placement at & #36;21 a share, 5.4% discount to its closing price yesterday. It is also planning a non-underwritten share purchase plan to raise & #36;75m. The funds will be used to repay debt and pursue growth opportunities. SGM last traded at 2220c.AdelaideBrighton (ABC) - Investor Presentation - Expects a net profit of & #36;105m- & #36;115m and expects the 2009 dividend to be at the lower end of 65-75% payout ratio. Says residential building activity is rising and sees its debt at year end to be at & #36;225m. ABC down 5c to 263c.Amcor (AMC) says its proposed Brilliant Circle transaction will not go ahead as it did not receive the appropriate level of support votes at its EGM. It is now exploring alternative possibilities to asset sales. AMC last traded at 565c.Arrow Energy (AOE) says it's targeting a final investment decision on its Fisherman's Landing liquefied natural gas project in QLD by late March 2010. AOE down 2.1% to 413c.Spotless Group (SPT) unchanged at 262c. It held its AGM today and says it expects improved earnings in fiscal 2010 from both of its key divisions.ANZ Bank (ANZ) has sold its custodian services business in Aust and NZ to JP Morgan. ANZ down 2.65%.The Dow Futures were down 28 at midday & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091119/27/29udn.html Fri, 20 Nov 2009 08:14:00 GMT Singapore now sees its & #160;economy solidly back in the black in 2010 after confirming that it grew strongly in the third quarter.The country's Trade and Industry Ministry issued a flash third quarter estimate in early October which signalled the rebound out of the red of the second quarter.Yesterday's statement confirmed & #160;it and firmed up a growth figure for next year.Singapore has emerged as something of an advanced indicator for Asia, given that its economy is highly exposed to exports, especially in advanced manufactured goods such as electronics and drugs.It was the first economy to reveal the extent of the terrible slide in the first quarter of this year and the first economy to confirm that things had started improving.Therefore its news yesterday of solid growth for 2010 is good news for the region.The Ministry said the Singapore economy will grow between 3% and 5% in 2010, up from the estimated contraction this year of 2% to 2.5% (subject to what happens this quarter). & quot;Preliminary estimates show that the Singapore economy grew by 0.6 per cent on a year-on-year basis in the third quarter of 2009, compared to a contraction of 3.3 per cent in the second quarter, The Ministry said & #160;yesterday. & quot;On a seasonally adjusted annualised quarter-on-quarter basis, the economy expanded by 14.2 per cent in the third quarter of 2009, following growth of 21.7 per cent in the second quarter, with all major sectors registering positive growth. & quot;The expansion was led by the manufacturing sector, which grew by 26.6 per cent on a quarter-on-quarter annualised basis. & quot;Increased production of higher-value pharmaceutical ingredients resulted in a continued surge in biomedical manufacturing output, while the electronics cluster grew modestly on the back of continued restocking activities and an uptick in consumer demand for electronic devices. & quot;The services-producing sectors also saw broad-based improvement, with sequential growth accelerating to 10.8 per cent from 7.9 per cent in the previous quarter. & quot;The trade-related and tourism sectors (viz., wholesale & #38; retail trade, transport & #38; storage, and hotels & #38; restaurants) posted double-digit sequential growth, as global trade flows improved and international travel picked up. & quot;However, the pace of growth in the financial services sector moderated to 3.9 per cent from 22.5 per cent in the previous quarter. & quot;The construction sector slowed down, growing by just 0.9 per cent compared to the growth of 32.7 per cent in the previous quarter. This moderation reflects a reduction in certified payments received for on-going real estate development projects. & quot;The preliminary estimates for the third quarter are in line with the advance estimates published on 12 October 2009, reflecting gradually stabilising global economic conditions. & quot;Malaysia and Thailand are due to & #160;release GDP figures in the next week and both are expected to report better figures, although they will still be in the red.Singapore's Monetary Authority, the & #160;central bank, last month said that it would & #160;maintain a zero appreciation stance so far as the Singapore dollar was concerned.That is in effect maintenance of & #160;the de-facto devaluation of the Singapore dollar in April which has been done to boost exports. It echoes what China is doing with the Yuan.The government also extended a wage subsidy program for employers that were set to expire this year to avoid an increase in job losses.The Ministry warned that Singapore's outlook for 2010 is & quot;closely linked & quot; to global conditions and a & quot;sluggish recovery & quot; in demand for the island's goods will moderate growth prospects. & quot;Global economic developments suggest that the recession has ended in most countries. GDP growth in key economies around the world has turned positive, bolstered by unprecedented policy responses which spurred domestic spending. Industrial production has started to pick up gain, while financial conditions and trade flows have corrected from their earlier lows, though not to pre-crisis levels. & quot;Asia is likely to continue to post positive growth rates, driven by domestic consumption and intra-regional trade flows. & quot;However, the recovery in the advanced economies remains fragile, and the return towards pre-crisis levels of output is likely to be gradual. & quot;Growth momentum thus far has been driven by targeted fiscal stimulus measures and inventory cycle adjustments, but these factors are likely to taper off in the second half of 2010. & quot;Even though there are some initial signs of a recovery in private demand, the durability of the recovery remains uncertain. & quot;Weak household balance sheets and persistently high unemployment, especially in the US, will continue to weigh on consumer demand. & quot;High levels of unused capacity and tight credit conditions in the US and Europe suggest that business investment is also unlikely to grow strongly next year. & quot;A sluggish recovery in final demand in the advanced economies will moderate Singapore's growth prospects in 2010. MTI expects Singapore's economic growth in 2010 to be 3.0 to 5.0 per cent. & quot;Growth momentum thus far has been driven by targeted fiscal stimulus measures and inventory-cycle adjustments, but these factors are likely to taper off in the second half of 2010, & quot; the ministry said.Manufacturing, which accounts for about a quarter of the economy, rose a revised 6.6% from the third quarter of 2008; & #160;after contracting 1.1% percent in the three months to June.Non-oil domestic exports unexpectedly dropped 6.1% last month from the same month of 2008 and yesterday the Ministry said & #160;2010 trade & #160;could grow by 7%-9%, after 2009's contraction of a horrible 22%. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091119/27/29udm.html Fri, 20 Nov 2009 08:008:00 GMT Brambles has changed CEOs and other senior managers and now the market is changing Brambles' outlook to one not so rosy.The company told yesterday's AGM in Melbourne & #160;that & #160;group sales for the four months ended October 31 were & #36;1.4 billion, down 3% from the previous corresponding periodBrambles new Chief Executive Officer Tom Gorman told the AGM: & quot;I believe strongly in our businesses. We have outstanding market positions, financial strength and growth potential. & quot;Although short-term trading conditions remain somewhat subdued in our largest markets, we are very well-placed to benefit from global economic recovery. & quot; & quot;Making comparisons with the prior corresponding period was challenging as most of the prior corresponding period occurred before the escalation of the Global Financial Crisis. & quot;In line with the broader economic trend, Brambles experienced business conditions in the four months to 31 October 2009 similar to those of the second half of the 2009 financial year. & quot;The company said in a trading update that & #160;it is expecting a similar performance, especially from the US operations of CHEP where pallet issues will fall 3% for the 2010 financial year.In the trading update the company said: & quot;CHEP's revenue for the period was down 3 per cent on the prior corresponding period to US & #36;1,154 million, primarily reflecting CHEP Americas' revenue decline of 5 per cent to US & #36;513 million. & quot;The decline in CHEP Americas' revenue was due to CHEP USA, which had lower organic volumes as a result of prevailing economic conditions and had been unable to generate sufficient new business to offset fully the impact of customer losses. & quot;CHEP USA now anticipates total pallet issues for the 2010 financial year will be approximately 3 per cent lower than the 2009 financial year. & quot;Brambles said the slowdown at & #160;CHEP USA had resulted in the short-term accumulation of around four & #160;million additional idle pallets during the 2009 calendar year, which will result in & #160;associated short-term storage and handling costs. & quot;CHEP USA considers that these pallets are required to meet future customer growth requirements and does not plan to alter its previously announced program to scrap 7 million excess pallets. & quot;The build up of unwanted pallets and the extra costs comes as Brambles restructures CHEP USA to cut costs and improve service to customers. & quot;This program involves a fast-track investment spread across the 2010, 2011 and 2012 financial years, & quot; the company said.Brambles said that in & #160;other parts of its business & #160;in the four-months to 31 October 2009: & quot;CHEP EMEA's revenue was down 1 per cent to US & #36;515 million, primarily reflecting ongoing weakness in the automotive sector. Excluding automotive, CHEP EMEA's revenue was up 1 per cent. & quot;CHEP Asia-Pacific's revenue was up 2 per cent to US & #36;126 million as the growth of the reusable plastic crate business in Australia, and pallet volume growth in China, offset ongoing weakness in the automotive sector. & quot;Excluding automotive, CHEP Asia- Pacific's revenue was up 4 per cent. & quot;Recall's revenue was down 3 per cent to US & #36;248 million, reflecting the impact on the Secure Destruction Services (SDS) business of lower activity in the USA and Europe and lower paper prices. & quot;Excluding SDS, Recall's revenue was up 2 per cent as its Document Management Solutions business continued to grow. & quot;Brambles' cash-flow and balance sheet positions are robust and the Company continues to manage both capital expenditure and working capital tightly. Brambles' liquidity position & #160;is strong, with significant unused funding facilities and no requirement to refinance any borrowings until the 2011 financial year. & quot;The trading update made no mention of any profit guidance or any estimate on what the recent rise in the value of the Australian dollar against the greenback, might do to revenues and earnings at December 31, or for full year.Brambles shares rose on the news, finishing up 3 cents at & #36;6.75. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091119/27/29udl.html Fri, 20 Nov 2009 08:008:00 GMT More records for the gold price this week as the futures price reached over & #36;US1,150 an ounce.Of course the rising value of the Australian dollar continues to clip those gains for local investors and companies, but the AMP's chief economist, Dr Shane Oliver reckons the metal's price still has a way to go.He says that while there is a risk of a short term correction in the gold price, more upside is likely over the medium term.But given gold's highly speculative nature a better approach for investors would be to consider a broad commodity exposure. http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091119/27/29udk.html Fri, 20 Nov 2009 00:13:00 GMT Another week for the US economy in which & #160;statistics, speeches and interviews, all & #160;underlined just how tough it is going to be in the world's biggest economy for the next year or more.In fact they underlined what Fed chairman Ben Bernanke said at the start of the week (and what the Fed has said in its post-meeting statements) & #160;that the US economic recovery is happening, but it's fragile.It's facing significant headwinds, such as high unemployment, & #160;depends & #160;on Government spending being maintained, and that means & #160;interest rates remain low for & quot;an extended period of time & quot;.That phrase has been used in the last few post Fed meeting statements and it is what Mr Bernanke and half a dozen other senior Fed officials have said in the past 10 days of speechifying across the US.But if there was just one stat that best illustrated the current fragility of the & #160;US & #160;'recovery' this week it was the October housing starts which revealed a very surprising 10.6% drop from September as & #160;builders couldn't get finance and private buyers withdrew because of doubt about the longevity of a housing tax break.That break has boosted demand for new and existing houses, and helped turnaround the plunge in prices across the country, leading many economists, politicians and investors to argue that the great American housing rout was over.It has been extended in 2010 and widened and & #160;it needed to be, judging by the sharp fall in starts and the 4% fall in approvals (called permits in the US).Construction of new homes & #160;hit a six month low in October and were 30.6% under the already depressed October, 2008 level.But they were still up 10.4% from the low point in March-April, which is a tender mercy.At the same time & #160;a surge in the cost of new and used vehicles lifted consumer prices, proving that while the cash for clunkers helped boost demand, it actually allowed car companies and retailers to lift their prices and profit margins, an outcome not discussed by the ideas supporters.It seems many of the deep discounts on offer before and during the cash for clunkers scheme have gone as stocks of unsold cars were cut and sales growth started returning in October.The housing and inflation figures came a day after a surprise slowing in industrial output in October, adding to the growing suspicion that the economy may have hit a bump after the move out of recession in the & #160;third quarter.The Commerce Department said housing starts fell 10.6% to an annual rate of 529,000 units, the lowest since April.It was the biggest decline in 10 months. Starts for & #160;single-family homes fell 6.8% last month to an annual rate of 476,000 units, the lowest since May.Starts for the volatile multifamily segment tumbled 34.6% to a 53,000 annual rate, adding to September's fall and a direct result of the downturn in commercial real estate that is hurting banks large and small across America.Even though there are hundreds of thousands of homes and apartments vacant through foreclosures and people walking away, the US still needs a strong program of home unit building.But due to the banks cutting lending and then being hit with souring commercial real estate loans, this is not happening. If it not stopped, the collapse in this side of the housing market could drag the entire sector back under early next year.And then a Fed member did something no one has done so far: suggested a time limit for that phrase used by his chairman and the Fed; that interest rates will remain at their current record lows & quot;for an extended period of time''.St Louis Federal Reserve Bank President James Bullard said in a speech that past experience suggests the Fed may not start to raise interest rates until early 2012.But he tempered this by saying the emerging & #160;concern borrowing costs have stayed & quot;too low for too long & quot; may prompt an earlier rate hike. & quot;If you look at the last two recessions, in each case the FOMC waited two and a half to three years before we started our tightening campaign, & quot; Bullard said in his speech in St. Louis. & #160; & quot;If we took that as a benchmark that would put us in the first half of 2012. & quot;Bullard added that in the debate on when to tighten policy, & quot;the idea that you might be creating asset bubbles by keeping rates too low for too long will be an important argument. & quot;But offsetting this was the fact this recession is far deeper than the previous two, with unemployment at its higher level in 26 years and expected to rise further from the October level of 10.2%.Bullard said his 2012 outlook assumes the most recent recession ended this summer, and that the FOMC, as in the past, will begin to raise rates about two-and-a-half to three years after a return to growth. & #160;The economy emerged from the slump in the September quarter, so the Fed could start lifting rates in the front half of 2011.So if rates remain around current levels for the next two to three years, what's that say about the prospects for the overall economy, given the debt burden, weak banks and the unemployment problem?And President Obama & #160;surprised in & #160;a rare interview with Fox News towards the end of his & #160;Asian trip, that the US economy & #160;could stumble into a & quot;double dip recession & quot; early next year if Government spending wasn't brought under control. & quot;It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a double dip recession, & quot; the & #160;President said in the interview.His comments came a day after the US Federal Government debt was reported to have climbed over & #36;US12 trillion, on its way to the current debt ceiling of & #36;US12.014 trillion that should be reached sometime next week.That will force Congress to lift the ceiling, or engage in a bruising brawl with the President that could see the Government shutdown.It could also lead the Obama administration to produce the toughest budget in a decade early next year with massive spending cuts, a move that would also enrage some in Congress, especially with the healthcare changes (and their huge bill), about to enter vital voting periods in the Senate.The & #160;Federal debt is up more than & #36;US2 trillion since September 2008, the end of the 2008 financial year and when Lehman Brothers failed.Much of the increase has come from a sharp drop in tax revenues and the spending on stimulus packages totalling some & #36;US780 billion, the Tarp money to rescue the banks and car companies (and other groups) of around & #36;700 billion and spending on defence for the wars in Iraq and Afghanistan.But for all the confidence that the recovery, however fragile, is tangible, with financial markets still strong, & #160;a grim reality was outlined & #160;in Washington this week for all the world to see.America can't feed all its 303 million people, with one in seven going short at some stage in a week.The country's Agricultural Department (The full study is available at) reckons some 49 million Americans struggle to get enough to eat, the highest reading in an annual survey in the 14 years it has been conducted.And the figure probably understates the problem because the survey was done at the end of 2008 when unemployment was starting to accelerate and was a long way from the current reading of 10.2%, or around 15.7 million out of work.Some 36 million people are estimated to be on food stamps, and yet there looks like there's another 13 million or more people who are unable to get enough food to eat and who are beyond Government help.Details of the survey were in the USDA's annual report was based on a survey conducted in December 2008, soon after financial markets slumped.The report said that around & #160;14.6% of US households, equal to 49.1 million people, & quot;had difficulty obtaining food for all their members due to a lack of resources & quot; during 2008, up 3.5 percentage points from 2007 when 11.1 percent of households were classified as food insecure.About 5.7% of US & #160;households, or 17.3 million people, had & quot;very low food security, & quot; meaning some members of the household had to eat less. & #160;Typically, food runs short in those households for a few days in seven or eight months of the year, USDA said.The department said this & #160;year's report also revealed & quot;that one third of food insecure households had very low food security (food intake of some household members was reduced and their eating patterns disrupted at times during the year).This is 5.7 percent of all U.S. households or about 6.7 million. This is up from 4.7 million households (4.1 percent) in 2007, and the highest level observed since nationally representative food security surveys were initiated in 1995. & quot; & quot;Even when resources are inadequate to provide food for the entire family, children are usually shielded from the disrupted eating patterns and reduced food intake that characterize very low food security. & quot;However, children as well as adults experienced instances of very low food security in 506,000 households (1.3 percent of households with children) in 2008, up from 323,000 households (0.8 percent of households with children) in 2007, & quot; the Department said.The high level of unemployment is driving much of the poverty and other problems, and the rising level of delinquencies on home loans. & #160;The US Mortgage Bankers Association says mortgage delinquency rates and the percentage of loans that entered the foreclosure process jumped in the third quarter, with both reaching record highs,The percentage of loans on which foreclosure actions were started rose to 1.42%, an all-time high, up from 1.36% in the second quarter and 1.07% in the third quarter of 2008.The rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure.The Association said the combination of loans in foreclosure and at least one payment past due was 14.41% on a non-seasonally adjusted basis, the highest ever seen in the survey. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091118/27/29tgc.html Thu, 19 Nov 2009 08:46:00 GMT The return of the & #160;resources boom was again confirmed by the news yesterday that the & #160;value of mining and energy projects under development in Australia had jumped 40% from April to October this year.More specifically, the rise can be put down to one project: the & #36;43 billion Gorgon LNG project in Western Australia which was & #160;given the greenlight in the period.Australian Bureau of Agricultural and Resource Economics (the federal government's commodities forecasting group) said the & #160;value of advanced minerals & #160;and energy projects was & #36;113 billion & #160;as at October. & quot;The increase in planned capital expenditure reflects expectations of growing demand for minerals and energy commodities in the medium term, & quot; the bureau's deputy executive director Terry Sheales said in the statement.(See the ABARE graph above on capex).Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell & #160;in September agreed to proceed with the & #160;Gorgon venture located off northwestern Australia. & quot;The record value of advanced minerals and energy projects reflects, in part, the decision to proceed with development of the A & #36;43 billion Gorgon LNG project, & quot; Dr Sheales said. & quot;It is the single largest project undertaken in Australia's resource sector. & quot;Western Australia accounts for about 83% of the capital expenditure on advanced projects.ABARE said the & #160; & #36;112.5 billion is spread across 74 advanced projects, defined as being under construction or committed, of which 38 are energy projects, 31 are minerals projects and five are mineral processing projects.Energy projects account for around 72%, or & #36;81.1 billion, of the estimated capital cost of all listed advanced major projects.Iron ore projects account for a further 15% or & #36;16.8 billion.Included in Western Australia's share of & #160;83% were & #160;eight oil and gas projects (valued at & #36;67.2 billion) and eight iron ore projects ( & #36;16.8 billion).ABARE said Queensland accounts for a further 8% ( & #36;9.3 billion) of capital expenditure on advanced projects, with more than half of this in coal mining and related infrastructure projects.The ABARE list includes a total of & #160;341 major development projects, including 267 projects at a less advanced stage, or projects undergoing feasibility studies or approval processes.In the six months to October 2009, 44 new projects have been added to ABARE's list of development projects.This compares with 11 projects added in the six months to April 2009 and 31 projects being added in the six months prior to October 2008. & quot;The large number of new projects added to the list since April 2009 is another indication of the positive outlook for world minerals and energy commodity demand over the medium to longer term, & quot; Dr Sheales said in the statement.In the six months to October 2009, 15 major minerals and energy projects with a capital expenditure of & #36;3.9 billion were completed.ABARE said that in 2008-09, expenditure on exploration in Australia's minerals and energy sector was & #36;6.0 billion.That was an & #160;increase of 10% & #160;on expenditure in 2007-08. In real terms (2008-09 dollars) exploration expenditure in 2008-09 was the highest on record and more than double the average expenditure of the past 30 years.ABARE said the increase was the slowest rate since 2003-04.This & quot;slowing growth reflected a sharp decline in prices of most commodities as a result of the global economic downturn, & quot; ABARE said. & quot;Petroleum exploration expenditure rose by 26 per cent to & #36;3.8 billion, the highest on record and partially reflecting high oil prices in the first quarter of the financial year. & quot;Coal exploration also rose, by 27 per cent to nearly & #36;300 million. Uranium exploration expenditure declined by 20 per cent, following a doubling of expenditure in the previous financial year. This expenditure reduction is partly attributable to declining world uranium prices over this period. & quot;With the exception of iron ore, all other major mineral commodities experienced declining exploration expenditure in 2008-09. Exploration expenditure for iron ore was & #36;589 million, an increase of 30 per cent. & quot;However, this was lower than the 52 per cent growth that occurred during 2007-08. & quot;Exploration expenditure on base metals (copper, silver, lead, zinc, nickel and cobalt) declined by 34 per cent in 2008-09 to around & #36;519 million, while expenditure on gold exploration declined by 26 per cent to & #36;438 million. & quot;According to the Australian Bureau of Statistics (ABS), new capital expenditure in the mining sector was & #36;35.7 billion in 2008-09. & quot;This represents an increase of 30 per cent on 2007-08, and is around three and a half times the average annual real expenditure since 1980-81. & quot;The scale and pace of expenditure estimated by the ABS is consistent with recent trends shown in ABARE's full list of minerals and energy development projects. & quot;Capital expenditure in the metals products sector, which includes the minerals processing activities covered in ABARE's project list, was & #36;4.5 billion in 2008-09, 18 per cent higher than expenditure in 2007-08. & quot;In 2008-09 dollars, this is the fourth highest annual capital expenditure recorded over the past 30 years. & quot;Nevertheless, ABS survey data suggest that capital expenditure in the metal products industry may fall in 2009-10 to around & #36;3.6 billion, partially reflecting the completion of an upgrade at Bluescope Steel's Port Kembla steel operation. & quot; ABARE said. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091118/27/29tga.html Thu, 19 Nov 2009 08:45:00 GMT Macarthur Coal warned yesterday that it faces a huge drop in profit, but the news should be viewed very carefully.The AGM in Brisbane was told yesterday & #160;the company faces a sharp drop in 2009-10 first half earnings due to significantly lower US dollar coal prices this half and higher Aussie dollar exchange and hedging rates.But those first half prices from a year which were & #160;exceptional: all time highs for the company's coal products and they probably won't be topped for a few years.So the comparison is with a period of very high profitability, compounded by the sharp rise in the value of the Australian dollar since July.No wonder earnings will fall.The Aussie dollar was much lower in the six months to June, so that will be factor when the June 2010 half year result is reported as well (along with the sharp & #160;fall in prices).Macarthur said it expected to record a net profit for the six months to the end of December of between & #36;30 million and & #36;38 million, down from & #36;106.9 million for the previous corresponding period.The shares reacted oddly to the news, rising, then falling away in later trading yesterday to close 4.7%, or 48 cents, lower at & #36;9.70.The miner said the significantly lower US dollar sale prices applied during the Japanese financial year, which begins on April 1.This was despite the company returning to full production, after scaling back last year as a result of the global financial crisis.''Constraints in the Goonyella coal chain and uncertainty about the next JFY (Japanese financial year) sales price impede the company's ability to give any guidance on anticipated full year profit,'' Ms Hollows told the company's annual general meeting.The company said the profit range for the December 2009 half is sensitive to the following assumptions:Achieving the budgeted shipping schedule (2.4Mt-2.7Mt)The valuation of financial derivatives at 31 December (estimated & #36;3 million)Equity accounted losses for the Middlemount Mine project as a result of the development of the project and the bulk sample pit, estimated to be between & #36;5 million and & #36;8 millionNo additional demurrage associated with the Goonyella coal chain constraints currently being experienced.Macarthur & #160;CEO & #160;Nicole Hollows told the meeting that although & quot;we are now back to full production, after scaling back last year as a result of the GFC, there is uncertainty about the level of sales for the second half of the 2010 financial year due to constrained coal chain supply issues and the forthcoming wet season in the March quarter & quot;.She said world & #160;steel prices have stabilised as producers cut back output and inventories were drawn down; steel production is starting to recover from the low levels experienced at the height of the impact of the GFC in the December 2008 and March 2009 quarters and China's monthly steel output has exceeded previous levels from mid 2008. & quot;Imports of all coal types into China have increased significantly in recent months with a sharp jump in metallurgical coal imports during the first few months of 2009 calendar year. & quot; & quot;The sales target for the full year of 4.6Mt remains unchanged, as ongoing demand is uncertain and the upcoming wet season may impact production and sales, & quot; Ms Hollows said in her presentation to the AGM. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091118/27/29tg9.html Thu, 19 Nov 2009 08:44:00 GMT Heavy equipment group, Emeco Holdings has revealed what appears to be a small earnings downgrade in guidance issued at yesterday's AGM in Sydney.The about-to-leave CEO, Laurie Freedman told the meeting that while there were a number of positives and negatives, the company & #160;expects & quot;these various factors to offset one another & quot;. & quot;In recent weeks we are observing the early stages of a surge in activity in our major markets which we expect to underpin a step change in second half earnings,' he said. & quot;Furthermore, our medium term outlook is positive as our major customers in key commodities across coking coal, iron ore, thermal coal, gold and oil sands return to historical production levels and recommence expansion projects. & quot;However, the appreciation of the AUD in recent months is expected to impact our full year NPAT by at least & #36;2 million. & quot;As a result of the currency impact we now expect our full year earnings will be towards the lower end of the previous earnings guidance of & #36;46 million to & #36;53 million. & quot;With respect to the composition of our guidance, we expect approximately 70% of earnings to be generated in the second half. & quot;Mr Freedman said the & #160;bulk of the company's & #160;earnings growth is expected to come from Australia, Indonesia and Canada over the next two years, primarily through organic growth of & #160;its larger mining fleet to meet the expected growth in commodity volumes. & quot;The significantly stronger second half earnings is underpinned by our newly acquired large trucks being 100% deployed by January 2010, recent contract wins for existing idle fleet and strong outlook for Emeco's key commodity exposures in 2010. & quot;We anticipate providing further guidance at our half year results presentation in February 2010, where we will have further visibility. & quot;The company's shares fell more than 3%, or 3 cents, to 87 cents after the AGM news was announced.Mr Freedman is leaving after a decade in the job. He's being replaced by Keith Gordon, a senior executive from Wesfarmers.In his speech, chairman Alec Brennan told the meeting that & #160;while the company's & #160;financial position remains strong, the challenge to improve its return on capital remains. & quot;Central to this primary objective, we have commenced downsizing the European business and we are undertaking a review of the USA business. & quot;The sharp downturn in these two markets resulted in one-off impairment and restructuring charges of & #36;44.5 million in FY09. & quot;Although a disappointing result for the current year, we believe the action taken is prudent in the current circumstances. & quot; & #160;Mr Freedman said that when the company & #160;provided FY10 earnings guidance to the market in August, & #160;there was significant uncertainty around the recovery. & quot;Our experience to date has been that the early part of the recovery has been slow and that the ultimate speed of recovery is still difficult to predict. & quot;He said that & #160;with respect to the FY10 earnings outlook, there are a number of factors which are influencing earnings since the previous guidance in August. These include:A flatter than expected utilisation profile in 1H10 in Western Australia, Queensland and Canada as customers have been slower to make decisions in the early part of the recovery;Increased costs in 1H10 to prepare a significant amount of equipment for engagement in early 2H10;Recovery in US coal market not expected until middle to late 2010 which will reduce earnings in our US business;Continuation of a subdued market for the Australian Sales business throughout FY10.Largely offsetting these downside risks are several upside factors which include a & #36;95 million investment in the large truck fleet that was not previously contemplated in the earlier guidance which will generate incremental earnings in 2H10. & quot;As a result, we have recently committed to purchasing over thirty 190 tonne to 240 tonne trucks for a total investment of & #36;95 million. & #160; & quot;All these assets will be deployed into coal, iron ore and oil sands in Australia and Canada to meet the strong demand in 2010. & quot;These acquisitions will result in debt peaking at around A & #36;380 million in the short term, however this is well within our existing debt facilities. & #160; & quot;Importantly, earnings and cashflow from this equipment is expected to be generated immediately which will be used to reduce debt in 2010. & quot;Total gross capex for FY10 is now expected to be approximately & #36;160 million, which comprises & #36;55 million of sustaining capex and & #36;105 million of growth capex, which primarily represents these large truck investments. & quot; & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091118/27/29tg8.html Thu, 19 Nov 2009 08:43:00 GMT AWB Ltd has joined the ranks of rural groups cleaning up their financial house by revealing big write-downs and a big red bottom line.The company yesterday revealed & #160;a full-year loss because of one-time charges for its Brazilian and fertilizer units.Elders and Incitec Pivot have revealed big one time losses and write-downs in their 2009 results.In both cases, the losses were in part linked to the global slump in fertiliser prices (and ammonium nitrate), which forced impairment tests to be done and charges to be made against certain assets.Elders and AWB revealed the write-downs on their fertiliser Joint Venture, Hi-Fert late last week.The company had a net loss of & #36;250.8 million ( & #36;234 million), in the year ended September 30, from net profit of & #36;60.3 million, a year earlier.The result was close to the & #160;November 13 guidance update that it expected a loss of about & #36;251 million.AWB is closing its loss-making Brazil unit and selling its fertilizer joint venture.The company forecast 2010 & #160;profit before tax and one time-items for its continuing business of & #36;95 million to & #36;115 million.AWB said the & #160;result takes into account the discontinuing businesses AWB Brasil and Hi-Fert, significant goodwill impairment for Landmark Financial Services, a write down in Hi-Fert, and other significant items in relation to restructuring and legal costs associated with legacy issues.However, for continuing businesses - Landmark and Commodities Management- the company reported a profit before tax and significant items of & #36;93 million for the full year to September 30 & #160;with & #160;a particularly strong performance by AWB Geneva.AWB Managing Director Gordon Davis said that while the 2009 full year result was disappointing, the company is forecasting a full year 2010 profit before tax and significant items for its continuing businesses of & #36;95 million - & #36;115 million. & quot;This is before taking into consideration the benefit of the recent capital raising which should generate interest savings of & #36;20 million - & #36;25 million. & quot;In a year where the financial and climatic environment remained particularly challenging, the performance of AWB was mixed, affected by the availability and cost of credit, lower input margins, a rising Australian dollar, decreasing commodity prices, weak demand for fertiliser and adverse seasonal conditions on the east coast of Australia, & quot; Mr Davis said. & quot;Looking forward we have set the platform for more sustainable growth by reducing our net corporate debt by over & #36;250 million and implementing a number of successful cost reduction initiatives. & #160; & quot;In addition, after the end of the financial year the proceeds of a capital raising further reduced debt, strengthened our balance sheet and significantly improved financial flexibility. & quot;We are clearly focused on growing our continuing businesses and developing a regional agribusiness with more sustainable growth characteristics for the benefit of shareholders, & quot; Mr Davis said.AWB shares fell half a cent yesterday to & #36;1.255. http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091118/27/29tg7.html Thu, 19 Nov 2009 08:42:00 GMT Nothing at all for interest rates from the September quarter Labour Price Index from the Australian Bureau of Statistics except to say that once again the public sector has been very generous with wage rises, compared to private industry.The Index shows hourly & #160;wages growth in Australia continues to ease, as the Reserve Bank says it has been thanks to the & #160;economic slowdown & #160;and the tough international markets hitting corporate balance sheets and demand. & #160; & #160;The fall will have the RBA ticking another box on its economic checklist.Wage costs are going the way they should be, at last, despite the best efforts of the public sector to keep them high.In fact private sector employers in the previously booming states of Western Australia and Queensland (where much of the mining industry located) have cut wages growth dramatically.But the & #160;public sector, especially the state governments, has done its & #160;bit, and more, to keep wages growing faster than they should be.Just as they did with producer price and consumer price inflation, the public sector is pushing & #160;wages up much faster than the private sector where the influence of the slump in demand for labour is seeing wage growth restricted.The PPI and CPI for the September quarter last month both showed huge rises in the cost of utility charges such as electricity, water and sewerage, so much so that they caused the headline rates of inflation in both series to be much higher than they should have been.Now, in the Labour Price Index for the September quarter from the Australian Bureau of Statistics & #160;we see evidence of a similar effect.Overall wages growth might have been low, but it would have been much lower (with less impact on medium term inflationary concerns) if public sector wages growth had been more restrained.The ABS said in commentary & quot;In the September quarter 2009, the Private sector wage price index rose by 0.7% compared to 1.0% for the Public sector, the All sectors index recorded a quarterly movement of 0.7%. & quot;The All sectors quarterly movement of 0.7% was the equal lowest in the history of the series. & quot;The last time a quarterly movement of 0.7% was recorded was in the March quarter 2000. & quot;Public sector movements were greater than the Private sector for both the quarter and the year through to September quarter 2009. & quot;The All sectors through the year movement of 3.4% was the lowest since the December quarter 2002, when 3.4% was also recorded as the through the year movement. & quot;Since the December quarter 2008, the Private sector and Public sector through the year movements have diverged. & quot;In the September quarter 2009, the Private sector through the year movement was 3.1% while the Public sector through the year movement was 4.5%. & quot; & quot;In the Public sector, quarterly movements in the September quarter 2009 ranged from 0.4% for Education and training to 2.4% for Health care and social assistance. & quot;The quarterly movement of 2.4% for Health care and social assistance was the highest recorded for this industry since the September quarter 2006 (2.7%). & quot;That's a huge divergence, and a look at the state breakdown shows where the public sector has been making hay, led by NSW where the Labour Government has handed out pay rises to keep unions happy (and Premier Rees in power). & quot;The Public sector quarterly movement for New South Wales was 2.1%. This was the highest of all the states and territories in the September quarter 2009. & quot;South Australia recorded the lowest quarterly movement (0.6%) in the September quarter 2009. & quot;The highest through the year movement in the September quarter 2009 for the Public sector was 6.2% in Western Australia and the lowest was 3.6% in Queensland. & quot;In contrast the ABS said the & #160; & quot;Private sector in each state and territory recorded a lower quarterly increase in the September quarter 2009 than in the September quarter 2008 with the exception of Tasmania where there was a higher quarterly movement (1.7% for the September quarter 2009 compared to 1.3% for the September quarter 2008). & quot;The lowest September quarter 2009 quarterly increase in the Private sector was recorded by the Australian Capital Territory (0.4%). & #160; & quot;The highest quarterly increase in the September quarter 2009 was recorded by Tasmania (1.7%). & quot;In Victoria, the Private sector through the year movement for September quarter 2009 was 2.8%. This was the first time since the June quarter 2000 that a through the year movement has been below 3.0% for this state. & quot;In private industry the ABS said mining, wholesale trade, financial and insurance services and education and training recorded the lowest quarterly movements of any industries (all 0.5%), public administration and safety and health care and social assistance recorded the highest (both 1.6%). & quot;Increases through the year ranged from 2.2% for Financial and insurance services to 4.6% for Public administration and safety. & quot;The Private sector quarterly change for the Mining industry (0.5%) was the fourth quarter in which the quarterly change was lower than for the corresponding quarter of the previous year. & quot;The through the year movement for Mining, Private sector was 3.7%, the lowest for this industry since the September quarter 2004 (3.4%). & quot;The highest Private sector quarterly movement of any industry in the September quarter 2009 was 1.5% recorded by the Transport, postal and warehousing industry. This was the highest quarterly movement recorded by this industry. & quot; & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091117/27/29shl.html Wed, 18 Nov 2009 08:33:00 GMT The National Australia Bank's latest quarterly survey of confidence and conditions for small and medium businesses has shown a sharp improvement.The rise echoes the big improvement reported last week in the NAB's monthly survey of business confidence and conditions in October.Yesterday the bank said the & #160;SME Quarterly Survey (for September 2009) showed that business conditions for SMEs have improved significantly, reaching positive territory for the first time since the Global Financial Crisis began in September 2008.The bank said that for the September quarter, large SMEs with an annual turnover between & #36;5m - & #36;10m recorded the strongest improvement and were the best performing at 6 index points, up from -13. Small SMEs ( & #36;2 - & #36;3M) recorded an improvement from -7 to 4 index points, with mid-sized SMEs ( & #36;3 - & #36;5M) increasing from -6 to 3 index points.(The NAB SME Enterprise Survey interviewed almost 700 firms with an annual turnover of & #36;2-10 million per annum. The average number of employees is 31 (15 employees for & #36;2-3 million turnover; 27 employees for & #36;3-5 million turnover and 41 employees for & #36;5-10 million turnover). References to 'larger businesses and counterparts' refer to businesses with over 35 employees.)The main driver of sales this quarter has been a sharp improvement in customer confidence/demand, and represents the first positive outcome since September 2008. & quot;Positive impacts from seasonal and competitive factors have also helped. & quot;In the statement accompanying the report the NAB's & #160;Group Executive of Business Banking, Joe Healy said that despite these positive survey results, businesses should remain cautiously optimistic about improving business conditions. & quot;Business confidence among SMEs for the September 2009 quarter improved significantly (by 22 index points) to a positive reading of 15 index points. & quot;While this is great news, we're keen to see these positive signs continue well into 2010 before claiming we're out of the woods, & quot; said Mr Healy.All states, except WA, recorded an improvement in conditions in the September quarter. Unlike last quarter, when all states recorded poor conditions, most states (ex Qld and WA) recorded positive conditions.Victoria and NSW were jointly the best performing states this quarter, followed closely by SA. All three states performed better than the national average.WA was the laggard, followed by Queensland. Both recorded poor conditions this quarter.With the exception of NSW and SA, SMEs generally underperformed their larger state counterparts. & quot;This underperformance was most apparent in WA and Queensland. & quot;SMEs in all states, excluding WA, saw some level of improvement. VIC surged 20 index points from -12 to 8. & quot;NSW increased sharply from -9 to 8 points, SA improved from -2 to a positive index of 6. Queensland improved significantly from -14 to a still poor, -1.Western Australia went against the trend and had the poorest performance, worsening from -6 to -10. & quot;While business conditions around the country have overall improved, WA reported a decline in business conditions, & quot; the bank said in the statement. & quot;Although Queensland improved significantly, it fell short of moving into positive territory. & quot;We're waiting to see if the holiday season will have a positive effect on these states and expect to have a better idea as to how their recovery is travelling as we head into 2010, & quot; Mr Healy said.. & quot;Health, wholesaling and finance were the best performing SME sectors, while & #160;conditions were weak and poor in transport, retail and most parts of construction and manufacturing.Health, followed by wholesaling and finance were the best performing SME sectors. Finance continues to benefit from an improvement in equities.In terms of quarterly movements, there were sharp improvements in manufacturing, construction, health and wholesaling. Transport was the only sector to deteriorate this quarter.SMEs performed better than their larger counterparts in business services, and manufacturing. However, they underperformed in retail, finance and transport.SME conditions were weak and poor in transport, retail (mainly food and motor vehicle), and most parts of construction and manufacturing. & #160; & #160; & quot;SME profit growth for the September quarter improved strongly, up 15 index points to positive 3 for the September quarter. Moreover, the annual profitability outlook surged again this quarter, up a further 26 index points to 27 index points, coming from record lows. & quot;All categories of SMEs are optimistic about the annual outlook with the middle size ( & #36;3-5m) segment the most optimistic. & quot;In terms of sectors, finance and health were optimistic across all segments. & quot;The NAB survey said the & #160;most optimistic sector overall (SMEs & #38; large) was small transport operators.Other SME sectors which were very optimistic include health, wholesale, finance, business services and property services, while & #160;retailers were the least optimistic among the SMEs. & quot;For most sectors, SMEs and their larger counterparts have a broadly similar view of near term confidence with the exception of Construction, wholesale, transport and property services SMEs were more confident. & #160;In retail and accommodation SMEs were less confident, & quot; the survey added. & #160; & #160; & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091117/27/29shk.html Wed, 18 Nov 2009 08:32:00 GMT Now, this could be bad news, or rather, unwanted news from the US & #160;for Billabong, the big Gold Coast-based surfwear group.One of its major American retail outlets, & #160;the huge Pacific Sunwear of California Inc, reported worse than expected quarterly figures Monday night in the US.The group incurred a bigger loss than expected for the 3rd quarter, thanks to a sharp fall in sales late in the three months, and it also forecast a bigger loss and write-downs in the current fourth quarter, with an even larger fall in same store sales. & #160;Pac Sun is a large US West Coast based retailer of surfwear and other clothing for teenagers and above: Billabong features on its sales pages on the web.In 2008 Billabong USA generated around & #160; & #36;US500 million of the group's worldwide & #160; & #36;US1.2 billion in annual sales.Much of that & #36;US500 million was generated through Pacific Sunwear with its & #160;904 outlets in all 50 US states plus Puerto Rica.Pacific & #160;has shut 36 of those in the past 12 months as sales have fallen across the country, a sure sign the slump in US retailing is hurting.The rising Australian dollar is also taking a toll on Billabong's sales revenue and the currency's move to a 15 month high yesterday just shy of 94 US cents, saw Billabong shares lose 30 cents (or more than 2%) to & #36;10.68.The company said at the recent AGM that the dollar will have an impact on earnings if sustained. & quot;As an example only, based on the Group's current full year profit forecast and year-to-date October actual average monthly exchange rates and now assuming spot rates of AUD/USD 92 cents and AUD/Euro of 61 cents for the balance of the financial year, NPAT growth in reported terms would be down on the prior year by approximately 6% when excluding the prior year's impairment charge. & quot;Billabong said the first half result depended on the way sales went in the US and Europe. & quot;The test for the balance of the year is whether the recent performance in the US is sustainable and whether the trends emerging within the Group's own retail operations become apparent in coming months within the wider wholesale account base, & quot; CEO Derek O'Neill told the AGM.But that is now in doubt because from what Pacific said in its profit announcement, there has been a noticeable downturn in the US in the past month or so. & quot;Through the first 11 weeks of the third quarter, our business performed at the higher end of our internal expectations led by some improving trends in our Young Mens business, & quot; according to a statement from Gary Schoenfeld, Pacific's President and Chief Executive Officer. & quot;We've since seen a precipitous decline across both genders during the last two weeks of the third quarter and into the first two weeks of the fourth quarter. & quot;Thus, while we still expect an improvement over the fourth quarter last year, we remain intently focused on several key initiatives toward getting this company turned around. & quot;That 3rd quarter sales and profit news, plus the poor 4th quarter outlook forecast saw & #160;Pacific shares fall in US after & #160;hours trading, down almost 20%, on the news.Pacific Sunwear said it expects a 4th quarter loss of 28 US cents to 35 US cents a share.The company posted a third-quarter net loss of & #36;US10.9 million, or 17 cents a share.A year ago it lost & #160; & #36;US2.5 million, or 4 cents a share.Revenue fell sharply, down 31% to & #160; & #36;US268.3 million, & #160;from & #36;US323.6 million in the same period a year ago.Total company same-store sales fell 18% during the period.That compares to the overall 0.2% in retail sales in October (and minus 2.3% in September) reported in the US on Monday as well.And the & #160;outlook for the December quarter was rough: & quot;Assuming a same-store sales percentage decline in the low twenties for the fourth quarter of fiscal 2009, the Company expects to report a loss of approximately & #36;(0.28) to & #36;(0.35) per share, & quot; Mr & #160;Schoenfeld said in the earnings statement. & quot;This earnings range includes estimated non-cash store asset impairment charges of approximately & #36;5 million. & quot;Any non-cash tax valuation allowance charges or additional store asset impairment charges that the Company may incur during the fourth quarter would increase the level of losses for the quarter. & quot; & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091117/27/29shj.html Wed, 18 Nov 2009 08:30:00 GMT AMP Ltd CEO, Craig Dunn, said yesterday that if a merger with Axa Asia Pacific Holdings Ltd's Australia and New Zealand units went ahead, it would allow the company to improve its scale and cost efficiencies.Mr Dunn & #160;used a long arranged luncheon speech in Melbourne yesterday & #160;to again argue in favour of the bid.He & #160;used the opportunity to put the case in favour of the Axa takeover, with Axa's French parent financing much of the bid in exchange for the Asian businesses that it has long wanted.He again pitched the AMP's rationale for the bid to be a counterweight to the size and scale of the Big Four banks.It's the old '5th pillar' argument of 'allow us to become strong because they (the Big Four banks) are already strong'.He also said the AMP would boost its banking business.That's another long heard promise from the group. It has been hot and cold on banking.And for much of the past decade has been cold, when it should have really been developing an on line presence much in the way & #160;that ING Direct has.But Mr. Dunn wants Axa, so he's ready to sing the most appropriate song when all it would take would be another 60 cents or so an Axa share to get the deal over the line.The cash and share proposal put to AXA APH's board earlier this month values it at & #36;5.34 each, well under yesterday's close of & #36;5.84. & quot;Frankly, these all add up to a very compelling offer, & quot; Mr Dunn told the Trans-Tasman Business Circle in Melbourne yesterday. & quot;But let me be very clear on one point. & quot;While the proposed merger with AXA is a transaction that we surely want to do, it's not a transaction that we absolutely have to do. & quot;We have very significant opportunities for growth in our own right in both Australia and in Asia. & quot;That's basically a message to the Axa Asia board, 'talk to us or we will walk'He said there & #160;were many benefits in merging the Australian and New Zealand operations of these two great companies. & quot;These were, he said: & #160;Australians need and deserve the strongest possible non-bank competitor in the important wealth management sector; & #160;second, by combining AMP and AXA, we can build a new financial force that will deliver superior benefits to the customers and shareholders of both companies and thirdly & #160;a combined AMP and AXA will bring more affordable financial advice to many more Australians. & #160; & quot;That's important for their future financial security and prosperity, and that of the nation. & quot;Ten years ago, only two commercial banks were among the top 10 fund managers in this country. Back then, Commonwealth Bank was ranked fifth and Westpac ninth. & quot;Since then many of the large, independent fund managers have been absorbed by the big four banks in what has been an ongoing wave of consolidation in the Australian financial services sector. & quot;Today, largely through acquisition, our big four banks control almost half the wealth management market between them. & quot;I greatly respect our major banks and the responsible way they've managed their institutions. Unlike most other western countries our banks have stood us in very good stead during the global meltdown of the past 18 months. & quot;But I also have no doubt that Australians can only benefit from having an even stronger, home grown non-bank competitor in this market. One that has a long and proud history, with one of the most recognisable brands in the country. & quot;If successful, our merger with AXA's Australian and New Zealand operations would provide a new way forward - the building of a fifth pillar in the financial services sector in Australia. And I mean a fifth pillar, not in policy terms, but in competitive terms. & quot;A successful merger between AMP and AXA would deliver even greater choice and improved access to advice for millions of Australians and New Zealanders. & quot;AMP has delivered this for 160 years. AXA, as the former National Mutual, for 140 years. & quot;Indeed, I like to think of this proposal as a great Australian company buying back the farm to create a combined company that is stronger and more competitive than either company is today. & quot;Together, we would improve the competitive landscape by offering consumers an even more competitive alternative. What we're talking about here is maintaining competitive tension in a market that is critically important to all our futures. & quot;What this merger will do, if it goes ahead, is allow us to improve our scale, & #160;further improve our cost efficiencies and therefore enhance our capacity to compete. & quot;AMP also has its own retail banking licence which we'd like to develop and grow more strongly over time. & quot;This merger will enable the combined company to offer those competitive banking services to more Australians, and it will increase the financial resources we have to back our bank's continued growth. & quot;The new, combined company would hold leading positions in financial advice, superannuation, risk insurance, retirement incomes and asset management. & quot;We would take the best products and platforms from both companies & #160;and ensure they're offered to more Australians. & quot;With our combined strength and greater financial resources, we would invest more in developing new products and services for customers and planners. & quot;Bringing the two companies together would also create substantial cost synergies. This was recognised by AXA's parent company when it chose AMP as its partner on this proposal. & quot;And more than one million Australian and New Zealand shareholders would be owners of this merged company. & quot;We've carefully structured our proposal for AXA minority shareholders to ensure that not only would they receive a substantial premium on their current shareholding, but they would also share in the future benefits that this new financial force would generate. & quot;Importantly, AXA shareholders would hold nearly a quarter of the shares in what would be the leading wealth management company in Australia, & quot; Mr Dunn said.Of course, these are just words. All it would take for these fine sounding sentiments to become a reality is & #160;more money on the table, with most & #160;analysts & #160;saying a value of around & #36;5.80 per Axa Asia Pacific share would win a 'yes' from the Axa board.And what did the market think of this?Axa shares eased 15 cents or more than 2% to & #36;5.84. AMP shares fell 11c to & #36;6.30.More money will be needed on the table to get the bid over the line.The overall market was off half a per cent. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091117/27/29shi.html Wed, 18 Nov 2009 08:29:00 GMT Hope springs eternal at Centro Properties Group.The group, which was the & #160;first listed casualties of the global credit crunch back in late 2007, says there are signs the retail environment in the United States may be improving.Not big signs, tiddlers, it would seem from comments at yestereday's AGM.Centro, which is the second largest manager of retail property in Australia and the third largest manager of shopping centres in the US, manages a & #36;20 billion portfolio of 733 shopping centres in Australia, New Zealand and the US. Two-thirds of the portfolio by value are located are the US.Centro global chief executive Glenn Rufrano told the group's AGM yesterday that the general operating environment had been tough in 2009, especially in the US where & #160;occupancy levels in its shopping centres fell, primarily as a result of retailer bankruptcies. & quot;(However,) we are seeing a stabilising retail environment in the US, with consumers starting to emerge and tenants, for the first time, considering expansion, & quot; Mr Rufrano said. & quot;We will be closely watching Christmas to see how these signs progress. & quot;The comments are a repeat of similar remarks made last week in a trading update that revealed a & #160;drop in underlying profit for the year, thanks to the very strong Australian dollar.Centro booked a loss of & #36;3.54 billion in fiscal 2009.Last week, Centro warned that its underlying profit for the year ending June 30, 2010, was expected to fall about 45% from an underlying profit of & #36;229 million in & #160;the year to June 30, 2009 year.Centro also said 60% of the expected fall in underlying profit would be due to the rise in the Australian dollar, with the remainder due primarily to the impact on fee income both of asset sales and the full-year effect of prior-year property devaluations.Centro's guarded optimism about the coming Thanksgiving Christmas season could be misplaced.US retail sales edged up 0.2% in October (excluding autos and petrol), after a sharp fall in September.Rival Australian mall operator, Westfield, revealed last week that it had been forced to offer rent cuts and holidays to try and maintain occupancy levels at its 55 or so malls across the US, an indication that times remain very tough.Its US occupancy rate was around 92%; Centro said yesterday its rate in the US was 89%, which is not all that good for such a big operator.Centro chairman Paul Cooper told securityholders at the AGM that & #160;the company's gearing was too high and a restructure was required to reduce debt to sustainable levels. & quot;A restructuring of the Group will be required in order to get our debt down to sustainable levels. & quot;To accomplish this, your Board recently invited a number of adviser firms to present their credentials to the Group. These presentations will occur shortly, and we will advise investors when the appointment of an adviser is made. & quot;We will then work with the appointed firm to assess the best and most appropriate restructuring. I emphasise that we are in the assessment phase at this time, and that no transaction is imminent, & quot; Mr Cooper said.Mr Cooper said the matter of & #36;US448 million in exchangeable notes that remained on issue - part of a & #36;US500 million issue in June 2007 - which mature in June 2010 was being considered as part of the overall group restructure.Mr Cooper also said Centro's search for a new global chief executive was progressing very well, after Mr Rufrano and Australian chief executive Tony Clarke earlier this year advised they would not seek to renew their contracts, which expire in February 2010.In October, ASIC launched action against eight current and former directors and executives of Centro Properties and Centro Retail Group alleging breaches of duty of care and a misstatement of about & #36;2.1 billion in debt in 2007.Mr Cooper said the non-executive directors charged would defend the charges vigorously.ASIC launched proceedings in the Federal Court in Melbourne, with a first hearing scheduled for this Friday, November 20.Centro securities closed unchanged at 31 cents yesterday. & #160; http://au.rd.yahoo.com/finance/news/rss/air/*http://au.biz.yahoo.com/091117/27/29shf.html Wed, 18 Nov 2009 00:35:00 GMT Australia faces regular speculation about interest rate rises from the Reserve Bank and the banks because the economy is expected to continue growing strongly into 2010.The minutes for the Melbourne Cup Day board meeting revealed yesterday that all that remains to be settled will be the decision each month on whether to lift rates or keep them steady.The minutes, & #160;released & #160;yesterday, are a bit more explicit on the future direction of rates than the post November 3 meeting statement & #160;or the November 6 release of the 4th Statement on Monetary Policy & #160;for 2009.In fact reading the latest board minutes you get the clear impression that for as long as the data flow on the economy is solid and upbeat, the likelihood will be for a rate rise to happen.One could happen after the board meeting on December 1, and again in February.It could come at any, or every meeting until the RBA is satisfied that monetary policy is back in neutral and not 'accommodating' as it is now, even after two rises of 0.25% each. & quot;Looking ahead, members expected that if economic conditions evolved as expected, further gradual adjustment in the cash rate would most likely be appropriate over time, though the pace of the adjustment remained an open question, & quot; the Minutes concluded. & quot;Overall, members considered that the recent information was consistent with the conclusions reached by the Board a month earlier: namely, conditions in the global and Australian economies were significantly better than had been expected earlier in the year when the Board had lowered the cash rate to 3 & #160;per cent; the Australian economy was operating with less spare capacity than earlier thought likely; and the growth outlook for the next few years had improved. & quot;The Board therefore concluded that it remained prudent, over time, gradually to reduce the degree of monetary accommodation. & quot; & quot;In considering the pace of that adjustment, members were conscious of balancing risks. & quot;On the one hand, business and consumer confidence could prove fragile, and economic activity at home and abroad might slow more than expected as the effects of stimulus measures faded. & #160; & quot;Also, the rise in the exchange rate would constrain output and dampen inflationary pressure, and credit conditions for some borrowers remained quite difficult. & quot;On the other hand, a lengthy period with interest rates at a very low level carried its own risks, particularly once the threat of serious economic weakness had passed. & quot;The improvement in the & quot;growth outlook for the next few years'' was backed up in the November 6 SMP with significant upgrades to the RBA's growth forecasts into 2011.Since the November 3 meeting we have seen solid figures on building approvals, weak retail sales figures, and a stronger than expected labour force report for October, although there was more part time work expected, while full time job growth was down on the strong September figures.But September/October saw a total of 65,000 full time and part time jobs created, which is a stronger outcome than what we saw in the still depressed US economy in those two months (job losses of well over 300,000).The latest RBA minutes contrast very favourably with the latest comments & #160;from Fed Chairman, Ben Bernanke on the US economy.In that speech he had this to say about the US: & #160; & quot;Financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible. & quot;How the economy will evolve in 2010 and beyond is less certain.....My own view is that the recent pickup reflects more than purely temporary factors and that continued growth next year is likely. However, some important headwinds--in particular, constrained bank lending and a weak job market--likely will prevent the expansion from being as robust as we would hope. & quot;That is a long way from the confidence at the RBA, as expressed in the latest minutes that & quot;the growth outlook for the next few years had improved & quot;.There & #160;has been a steady evolution of thinking on the health of the economy and on the future path for interest rates to where we are now: onward and upward, one month at a time.Here's what the RBA concluded in its three most recent major statements on monetary policy.In the & #160;November 6, SMP the RBA concluded:Conditions in the global and Australian economies are significantly better than was expected when the Board lowered the cash rate to 3 per cent earlier in the year. The Australian economy is operating with less spare capacity than earlier thought likely, and the outlook for the next few years has improved.Given this assessment, the Board has judged it prudent to lessen the degree of monetary stimulus that was put in place when the outlook appeared much weaker, increasing the cash rate by 25 basis points at both its October and November meetings.The cash rate remains at a low level, and a further gradual lessening of monetary stimulus is likely to be required over time if the economy evolves broadly as expected.The Board will continue to monitor developments closely and set monetary policy so as to promote sustainable growth in the Australian economy and keep inflation consistent with the medium-term target.And the November 3 statement concluded:The Board noted that the rise in the exchange rate is likely to constrain output in the tradeables sector and dampen price pressures. Nonetheless, growth is likely to be close to trend over the year ahead and inflation close to target.With the risk of serious economic contraction in Australia now having passed, the Board's view is that it is prudent to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker.The adjustments at the October and November meetings will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead.And the final paragraphs of the October board meeting minutes said:On the other hand, members judged that, compared with previous meetings, the risks in waiting had increased.In particular, underlying inflation was still, on the latest data, above the target and, while current forecasts suggested it would fall in the coming year, the expected trough in inflation was significantly higher than earlier thought.Keeping interest rates at very low levels for an extended period could therefore threaten the achievement of the inflation target over the medium term.More generally, very expansionary policy could result in the build-up of other imbalances in the economy, which would ultimately be detrimental to economic growth.Overall, members concluded that, while downside risks to the domestic economy could not be ruled out, they had diminished significantly over recent months.This meant that the balance of risks was now such that the current very expansionary setting of policy was no longer necessary, and possibly imprudent. The Board therefore decided in favour of raising the cash rate. & #160;