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PRESS DIGEST-Australian Business News - Jan 10

Source: Thomson Reuters Foundation - Wed, 9 Jan 2013 19:15 GMT
Author: Reuters
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Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Newcrest Mining, the largest gold producer in Australia, yesterday claimed mining junior Gold and Copper Resources (GCR) was fighting its legal action against Newcrest through the media and likened it to high-profile cases involving Kristy Fraser-Kirk and James Ashby. "Both of these names are well known as a result of the very high profile media campaigns which accompanied their legal actions  retaining [media relations group] AMC Media may indicate that GCR intends to employ similar media strategies with their legal action against Newcrest," a letter from Newcrest argued. Page 13.

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Michael Batchelor, chief executive of Australia and New Zealand for professional services group Aecom, yesterday said many in the industry were unsure as to why the Australian dollar continued to remain at its historically high levels. "It is a bit of an issue for exporting services, you tend to export at the very high end, the smart stuff the world wants," he said. Mr Batchelor added the company was looking at more creative roles such as master planning and architecture work for international ventures. Page 13.

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Steel manufacturers in China have argued that iron ore prices have risen beyond demand and that the commodity's spot price could plunge just as quickly as it rose. The price of iron ore has grown by more than 80 percent since its US${esc.dollar}86.70 a tonne record low in September last year. "If you look at the past years prices have peaked before the construction period ends  in 2010, the highest price was in April, in 2011, it was mid-February, and last year it was April again, but this year the price has risen so quickly and so dramatically that we will see it go down again just as fast," an executive in one of China's largest mills said. Page 13.

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Launa Inman, chief executive of skate, street, surf and ski wear retailer Billabong International, yesterday refused to apologise for making difficult decisions that could have encouraged a series of high-profile executives to leave the company. "Look at where the share price is? Where do you think Billabong will be if things stayed the same? Transformation is key for Billabong. I'm sure there are people that don't like to see the changes. They want the business to be what it was. I'm here to increase shareholder value," she insisted. Page 15.

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THE AUSTRALIAN (www.theaustralian.com.au)

Mark Cutifani, the incoming chief executive of global miner Anglo American, yesterday announced there would be significant changes to the company's business, noting that productivity was a major challenge and an area in which the resources industry was lagging behind other sectors. "In the mining industry, we're some 20 to 30 years behind other more progressive sectors in terms of productivity and business practices  We've got to go beyond that and make sure that we're working our assets, the engine room, as hard as we can," he said. Page 15.

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Simon Marais, the second largest shareholder in Fairfax Media, has been lobbied by the publishing and broadcaster's newest investors, investment banker Mark Carnegie and advertising guru John Singleton, to help revamp the company's strategy. Mr Carnegie and Mr Singleton are associated with Gutenberg Investments Trust, which owns 0.15 percent of Fairfax and has agreed to advise the latter's biggest investor, mining magnate Gina Rinehart, on "key matters" affecting Fairfax. Page 15.

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Figures published by the Australian Prudential Regulation Authority yesterday have revealed the three best performing large superannuation funds in Australia are all in-house corporate funds operated for employees. The staff super fund at investment bank Goldman Sachs generated 9 percent returns, while Commonwealth Bank Group Super and Worsley Alumina delivered 7.8 percent and 7.5 percent returns respectively. The worst performing fund for 2011-12 was the Bookmakers Superannuation fund, which lost 14.5 percent and was reportedly stuck with a series of illiquid holdings in property. Page 15.

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The Federal Government's A${esc.dollar}80 billion Future Fund has increased its property holdings in the United States, investing A${esc.dollar}333 million into US residential apartments and US${esc.dollar}59 million into The Howard Hughes Corporation property group. The moves are part of an attempt by the sovereign investment fund to increase its global property exposure, having more than A${esc.dollar}2 billion of its A${esc.dollar}5.1 billion property portfolio invested in the US property sector. Page 15.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Wal King, the former head of contractor Leighton Holdings , has been offered the opportunity to chair listed coal miner Bumi plc which is currently embroiled in a fierce shareholder battle for control. An extraordinary general meeting will be held next month, following a 70 percent drop in Bumi's share price last year. Mr King was approached after his record at Leighton, where he oversaw the growth of the company from a A${esc.dollar}70 million business to a A${esc.dollar}10.3 billion company that became the largest contract miner in the world. Page B12.

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Falling interest rates have not turned into a boon for the struggling retail sector, with the Australian Bureau of Statistics revealing yesterday that retail sales dropped by 0.1 percent in November to a seasonally adjusted total of A${esc.dollar}21.5 billion. "If the consumer is cheered by the interest rate cuts, she's still keeping it to herself," Chris Caton, chief economist at advisers BT Financial Group, said. Page B13.

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Investment giant UBS has recommended that its bitter Australian competitor, Macquarie Bank, could gain from either shutting down or selling its loss-making securities and investment banking divisions. The suggestion was part of a report from UBS analysts Chris Williams and Jonathan Mott, which also claimed that Macquarie "lacks the products, capability and balance sheet to compete in an industry suffering significant structural headwinds". Page B13.

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The S&P/ASX 200 Index gained 0.38 percent to close at 4708.1 points yesterday, ending three consecutive days of losses despite falls in the European and United States markets. The major banks had uneven results, with Westpac Banking Corp and National Australia Bank gaining 23 cents and 26 cents respectively, although Australia and New Zealand Banking Group fell by 15 cents. "Most of the market had been expecting an at least modest improvement in spending  it wasn't to be and was a bit of a disappointment," Steve Daghlian, analyst at broker Commonwealth Securities, said. Page B13.

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THE AGE (www.theage.com.au)

The spot price of iron ore has risen to its highest level in 15 months, with demand from Chinese steel manufacturers pushing the commodity's price to US${esc.dollar}158.50 a tonne yesterday. Analysts from global financial services firm Credit Suisse, however, expect the recent jump in iron ore to be "one last hurrah", predicting that the resource will fall to around US${esc.dollar}90 a tonne by 2015. "For this commodity, the long boom is fading," Credit Suisse wrote. Page B11.

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Economists yesterday were disappointed by a string of figures released by the Australian Bureau of Statistics, showing falls on household goods spending and retail sales for November despite falling interest rates. Purchases in department stores were down, while consumers also spent less on personal accessories, shoes and clothes. Bob Cunneen, senior economist at financial services group AMP Capital, said the news was "disappointingly soft". Page B11.

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Fiona Reynolds, chief executive of the Australian Institute of Superannuation Trustees, which represents the non-profit super sector, said the disparity in returns between non-profit funds and retail funds in the decade to June was "nothing to be sneezed at". Figures released by the banking regulator yesterday showed that public funds on average returned 5.5 percent to members, while more expensive retail funds only delivered 10-year returns of 3.4 percent. "Over a 30 to 40-year working life of superannuation contributions, an outperformance of 1 or 2 percent every year can make a very big difference," she noted. Page B12.

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