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PRESS DIGEST-Australian Business News - Oct 31
SYDNEY Oct 31 (Reuters) - 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)
--Media conglomerate Seven Group and contractor Leighton Holdings have had their executive pay practices queried by major superannuation funds and proxy advisor firms ahead of their annual general meetings next week. Both companies could face a protest vote over their remuneration reports. If a remuneration report is rejected two years in a row, new executive pay reforms dictate that the company's board can then be spilled. Page 15.
--The company with the third largest marketing budget in Australia, Woolworths , last week announced a major review of its A$120 million creative marketing account. The account, held by M&C Saatchi, includes the retailer's spending on online, catalogue, radio, print and television ads. Woolworths is also on the verge of appointing a firm to replace The Leading Edge as its market research supplier. Page 17.
--Rumours have begun to circulate that contractor Clough could face a takeover bid from mining and energy services firm Amec . Samir Brikho, chief executive of Amec, last week said the British group was actively scouring Australia for acquisitions, adding that "it has been written that it could be a good home for Clough to be with Amec". Investment bank JP Morgan Cazenove earlier this year said a buyout of Clough would be a sensible play by Amec, given their desire to increase their presence in the Australian market. Page 17.
--Television executives and media buyers have lampooned a claim by Lachlan Murdoch, the interim chief executive of Ten Network , that the broadcaster deserved a 30 percent share of the capital-city advertising sector in 2022. "If Ten gets to 30 percent next year, that means all the networks' shares will add up 104 percent . clearly that isn't going to happen," Peter Wiltshire, group sales and marketing director at Nine Entertainment Co, said. Page 39.
THE AUSTRALIAN (www.theaustralian.news.com.au)
--Qantas Airways chief executive (CEO) Alan Joyce yesterday claimed he had received support from fellow executives in the banking and mining sectors for the airline's decision to ground its entire international and domestic fleet. "I've had unsolicited emails from a lot of CEOs around the country who have come back and expressed support for what we're doing. It's quite overwhelming," Mr Joyce said yesterday. Page 25.
--The chairman of investment bank Goldman Sachs' Indian division, Sonjoy Chatterjee, last week declared at the Commonwealth Business Forum that "there is no other country which is as attractive to India right now as Australia is". Mr Chatterjee added that Australian companies should invest in India as well, where A$500 billion of investment projects have already been initiated or proposed. Page 26.
--JPMorgan last week announced that an apparent slowing in Westfield Group 's redevelopment projects was the reason behind the investment bank's earnings forecasts downgrade for the shopping mall operator. JPMorgan has predicted a 2 percent drop in Westfield's earnings per security for this financial year. "We are no longer prepared to forecast a near-term development-led earnings rebound," Rob Stanton, head of research at JPMorgan, said. Page 26.
--The managing director of Treasury Wine Estates, David Dearie, said the company's imminent status as the largest Australian-owned alcohol group, which will be solidified with the completion of SABMiller 's takeover of beer maker Foster's Group , was "something to be very proud of". "It's wonderful . and comes with a bit of responsibility to make sure we continue to grow and make Australia proud," Mr Dearie said. Page 26.
THE SYDNEY MORNING HERALD (www.smh.com.au)
--Despite the price of iron ore plummeting to US$120 a tonne on Friday from US$181 last month, iron ore producers last week were unfazed about the largest drop in the commodity's history. "I wouldn't worry about it . in all these large commodities two, three or four months is just a blink," mining magnate Clive Palmer said. Tom Price, analyst at investment bank UBS, said the fall presented iron ore miners with an opportunity to transfer steel mills from quarterly fixed-price contracts to spot-price contracts. Page B1.
--Despite an expected plummet in the value of Qantas Airways shares today, institutional investors have backed the airline's management after a dramatic turn in its industrial dispute on the weekend. Qantas opted to ground its entire international and domestic fleet on Saturday, a move which has cost the carrier A$110 million so far. "Every day for Qantas is a fight for survival. The last thing a company that is so exposed to macro influences out of their control wants is an internal battle," Matt Williams from wealth manager Perpetual said. Page B1.
--Retailers are hoping that the Reserve Bank of Australia will lower interest rates at its meeting tomorrow, a move that could revive flagging consumer confidence. "I think the rate cut would be enough to create headlines in all the media, and I think there would be a shot of confidence because a large number of people out there are quite despondent," Gerry Harvey, executive chairman of white goods and electronics outlet Harvey Norman , said. Page B3.
--Ben Gilbert, analyst at investment bank UBS, has said a possible interest rate cut would provide an "upside risk" to discretionary retailers for this financial year, a sector that includes JB Hi-Fi and department outlets Myer and David Jones. "The sectors that have generated the greatest outperformance have been household goods, and, surprisingly, Woolworths/Wesfarmers, while department store performance has been in line," Mr Gilbert said. Page B3.
THE AGE (www.theage.com.au)
--A report due out today by Deloitte Access Investment Monitor will reveal a 16 percent increase in investment projects in Australia worth a minimum of A$20 million over the last 12 months to a total of more than A$894 billion. "Large projects are longer term investments - they take longer to construct, and need to be in operation for longer for investors to see a return on capital," David Rumbens, director at economic consultants Deloitte Access Economics, said. Page B1.
--NBN Co, the government-owned company tasked with rolling out the national broadband network, has replaced its five-year wholesale contract for internet service providers with temporary one-year agreements. "We got some feedback from the retail service providers and the Australian Competition and Consumer Commission that they would like a bit more time to look at [the wholesale agreement], think about it and consider and so we responded to that," Jim Hassell, head of product management and industry relations at NBN Co, said. Page B3.
--Company executives are scrambling to rebook charter and passenger flights on alternative airlines after Qantas Airways decided to ground its entire international and domestic fleet on the weekend. Richard Savva, chief executive of Voyager Corporate Travel, a charter service for senior executives, said the firm initiated emergency procedures after the Qantas decision. 70 extra staff, Mr Savva said, were called into work to rebook flights for 700 customers, with 1200 customers to be affected if the grounding continues until Tuesday. Page B4.
--Tenants and building owners could face enormous fines if their office area does not meet environmental regulations when the property is sold, under new "green building" regulations set to come into force tomorrow. Under mandatory disclosure laws, a certificate for energy efficiency will be required if more than 2000 square meters of office space is sub-leased, leased or sold. Fines of up to A$110,000 for the first day and A$11,000 for subsequent days could be levied against building owners and tenants if they fail to comply. Page B5.
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