PRESS DIGEST-Australian Business News - Dec 30
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)
The chief executive of the Australian operations of investment bank UBS, Matthew Grounds, yesterday said he believed the Reserve Bank of Australia's decision to lower interest rates will start to reduce the gap between the booming and underperforming sectors of the local economy in 2012.
Mr Grounds, who is also joint global head of investment banking at UBS, added that small resources companies had found it difficult due to the lack of institutional funding. Page 15.
Businessman Greg Poche has been revealed as the donor behind a A$40 million grant to the Melanoma Institute of Australia, although the philanthropist has insisted on shining the spotlight on the centre's staff.
"The heroes are the modest geniuses of the institute itself," Mr Poche said. Reg Richardson, chairman of the institute and a long-time friend of Mr Poche, said the exposure of the philanthropist's generosity could encourage others to make "significant donations". Page 15.
The chief executive of Boeing, Jim McNerney, yesterday said one of the aviation industry's greatest challenges will be the ability of carriers to restructure, either through targeting niche markets or consolidation.
"[Consolidation is] hard because you're putting together combinations across national boundaries and airlines are often viewed as national treasures," he said. Page 15.
Investors sent KBL Mining shares up 17 percent to close at A27 cents yesterday after news broke that the company had sold a 15 percent stake to foreign trader Guangdong Guangxin Holdings.
The Chinese state-owned firm paid A$89 million for the holding, which also grants it the right to acquire KBL's copper output from the Mineral Hill mine in New South Wales. Page 17.
THE SYDNEY MORNING HERALD (www.smh.com.au)
The Australian stockmarket closed lower yesterday, with the S&P/ASX 200 Index being dragged down by another poor performance from retailers. Stocks in JB Hi-Fi, Myer, David Jones, Premier Investments, Harvey Norman and Kathmandu have all lost a sizeable chunk of their value this year, although some analysts see an opportunity in the market's recent downturn.
Stuart Smith from broker Bell Potter yesterday said he believed the stockmarket was significantly undervalued at its current level. Page B13.
The former chief executive and founder of mining group Oxiana, Owen Hegarty, yesterday reaffirmed his enthusiasm for the resources sector, despite the market's recent turmoil. "If we get frightened by a poor market then we are not doing our job," he said.
Mr Hegarty added he was a "supporter" of junior explorer Tigers Realm Coal, after acquiring 500,000 shares in the group. "There are plenty of people who will tell you there is lots of good value out there in the market . but here is one that I'm absolutely committed to and know plenty about," he said. Page B13.
A proposed joint marketing venture between Namoi Cotton and the Chinese government-owned China National Cotton Group has been postponed, the Australian cotton producer announced to the market today.
The news saw investors push Namoi shares down by 11 percent to A15 cents. "The complexity of the proposed joint venture operations and the time frame associated with the oncoming 2012 season has resulted in the parties not being able to reach agreement on all facets of the joint venture," Namoi said in a statement. Page B14.
Fears about the European debt crisis saw the Australian dollar yesterday fall nearly US1 cent before rebounding to US100.90 cents.
Robert Rennie, chief currency strategist at Westpac Banking Corporation, said developments in Europe were the main influence on the dollar's movements. "I would categorise the flow through the morning as one of good selling of euro crosses," he said. The price of gold also continued to fall, slipping by US$32.41 to finish the day's trade at US$1555.60 an ounce. Page B16.
THE AGE (www.theage.com.au)
A survey of 20 economists by The Age has uncovered an expectation that interest rates will fall and the Australian sharemarket will rebound in 2012. Michael Blythe, chief economist at Commonwealth Bank of Australia, predicted Asia to be "the stronger part of the global economy in the year ahead". Shane Oliver from diversified financial services group AMP warned that a risk to Australia was any reduction in demand for commodities from China, a possibility should Europe slide into a deep recession. Page B1.
Analysts have predicted the price of diamonds to outpace gold over the next four years, with the spot price of the precious gem expected to grow by 9 percent next year to US$145 a carat, while gold was expected to decline from 2013 to 2016.
"Diamond prices have not been inflated by artificial demand . therefore as countries like China and India keep growing . more people will be able to afford diamonds," Rob Henderson, chief economist at National Australia Bank, said. Page B2.
Derek Fisher, managing director of Moly Mines, yesterday said the miner was hunting for takeover targets after abandoning plans to establish the A$700 million Spinifex Ridge molybdenum mine in Western Australia.
"We're on the prowl and there's a lot out there . we've got two things that we're looking at very closely," Mr Fisher said. Moly will continue to operate its Western Australian iron ore venture. Page B3.
A panel of economists polled by The Age were divided over whether Federal Treasurer Wayne Swan would be able to deliver a budget surplus for 2012-13.
Nine forecasters predicted the Treasurer would succeed, while one predicted a perfectly balanced budget and six forecast a deficit. "Whether its achieved in 2012-13 or a year or so later is neither here nor there given that Australia's budget deficit is small by global standards and net public debt is trivial," Shane Oliver from financial services group AMP said. Page B7.