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PRESS DIGEST-Australian Business News - Jan 4

Source: Thomson Reuters Foundation - Thu, 3 Jan 2013 07:55 PM
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 (www.theaustralian.news.com.au)

Commonwealth Bank of Australia's market capitalisation soared beyond A${esc.dollar}100 billion yesterday after investors pushed the lender's shares up by A52 cents to a record high of A${esc.dollar}63.24. The increase is the first time an Australian bank has risen above the A${esc.dollar}100 billion mark and comes after a year that saw the lender's stock gain 28 percent. "It's really substantial  the stock is offering a fully franked dividend so what you get is obviously a completely clean income," Evan Lucas from contracts for difference provider IG Markets said. Page 15.

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David Haslingden was announced as the incoming chairman of Nine Entertainment Co yesterday, with the executive having previously worked as the chief operating officer and president of Fox Networks Group in the United States last year. Nine fell into the control of hedge funds earlier this year after a A${esc.dollar}3.4 billion debt-for-equity swap, with creditors scheduled to meet later this month to formally approve the agreement. Under the deal, creditors were given the right to select five directors, one of which is former federal treasurer Peter Costello. Page 15.

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Michael Andrew, the global head of accounting group KPMG, said the Australian economy would be supported by a second wave of demand for raw commodities from Brazil and India towards the end of the decade after an anticipated downturn in demand from China. "Things are looking better for commodities demand than they were six months ago  I think you are going to see a continued expansion and requirement for the sort of commodities Australia produces from Asia, India and South America," he said. Page 15.

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Warren Hogan, chief economist at Australia and New Zealand Banking Group, yesterday said the "stubbornly high" level of the Australian dollar would strengthen the argument that the Reserve Bank of Australia should reduce interest rates by as much as 100 basis points this year. "The big problem in Australia is that the persistent strength of our dollar has a slow-draining effect on the economy," he added. Page 15.

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

The authority operating Port Hedland in Western Australia yesterday announced that 25,995 million tonnes of iron ore were exported in December, the highest monthly trade ever recorded in the port's history. Port Hedland houses the export operations of miners Atlas Iron, Fortescue Metals Group and BHP Billiton, making it the busiest multi-user port for iron ore in Australia. The port's previous monthly record of 22.8 million tonnes was set last August. Page B10.

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The largest insurer in Australia, Insurance Australia Group (IAG), has increased its catastrophe reinsurance for this year to A${esc.dollar}5 billion from A${esc.dollar}4.7 billion the year prior. Catastrophe reinsurance allows insurers to spread the risk from major natural disasters. "The overall cost of the program is in line with the assumptions incorporated into our full-year 2013 insurance margin guidance," Nick Hawkins, chief financial officer at IAG, said. Page B10.

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Despite Australian listed pharmaceutical companies enjoying a strong 2012, with Sigma Pharmaceutical Group and Australian Pharmaceutical Industries growing by 81 percent and 36 percent respectively, drug manufacturers announced hundreds of redunancies in the final months of the year. The sackings came after the Federal Government attempted to stymie rising healthcare costs and the patents of some major treatments, such as cholesterol drugs, expired. Page B10.

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Elmer Funke Kupper, chief executive of the Australian Securities Exchange, yesterday said it would take at least six months until the non-mining sectors of the Australian economy would rebound thanks to the upcoming federal election and a lull in consumer sentiment. "I think it's more about financial year 2014 than financial year 2013. We need another six months of stability and confidence building  another interest rate cut," he explained. Page B11.

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THE AGE (www.theage.com.au)

Shares in Melco Crown, a joint venture involving Australian group Crown Ltd, rose yesterday in line with the sector after it was revealed that revenue from casinos in Macau rose by 20 percent to A${esc.dollar}3.3 billion in December. "This is definitely better than our expectation and much higher than the street estimates  it's a combination of higher holiday footfall, higher win rate and a return to VIP market," Jeremy Tan, an analyst at broker Kim Eng Securities, said. Page B14.

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Bloomberg, the financial newswire owned by New York mayor Michael Bloomberg, has formulated environmental, social and governance (ESG) information on approximately 25 percent of the 20,000 firms within the "general investable universe", according to Curtis Ravenel, global head of Bloomberg's sustainability group. Mr Ravenel added that around half of Australia's top 100 companies were on Bloomberg's database. "There are investors, hedge funds and the like who really think that when you integrate ESG information, there's alpha opportunity," he said. Page B14.

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The S&P/ASX 200 Index climbed by 0.74 points to close at 4740.7 points yesterday, the highest finish for the local stockmarket since it reached 4756.4 points on May 19, 2011. Resources-related stocks led the market, while investors were also encouraged by strong economic data from China. Global miners BHP Billiton and Rio Tinto gained A31 cents and A${esc.dollar}1.63 respectively to finish at A${esc.dollar}38.15 and A${esc.dollar}69.25, while the financial sector gained a combined 0.41 percent. Page B14.

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Lindsay Maxsted, chairman of Westpac Banking Corporation, yesterday was fairly neutral about the economic prospects for Australia in 2013. "I'm not that much more optimistic  because if you think through all the factors that existed in 2012 that made people cautious  they're all still there," he said. Peter Nash, chairman of accountants KPMG Australia, predicted 2013 to be a "difficult year" but noted "there are some positive signs on the horizon". Page B15.

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This press digest is published by Sentia Media Pty Limited ABN 11 002 533 851. Subscribers should refer to the original article before making any financial decisions or forming any opinions.

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