PRESS DIGEST-Australian Business News - Jan 30

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)

Tonight there will be a focus on the US$20 billion-plus Olympic Dam project as the board of Australian resources giant BHP Billiton (BHP) with chairman Jac Nasser leading, dines privately with the Premier of South Australia, Jay Weatherill, and the Deputy Opposition Leader Mitch Williams. BHP chief executive Marius Kloppers commented last month that the company had experienced "a great relationship with the SA government over the six-year period we've owned the mine." Page 1.

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Kerry Stokes, chairman of Australian diversified operating and investment group Seven Group, may have taken a small loss as subsidiary company Seven (WAN) Pty Ltd no longer owns shares in Ten Network Holdings that were purchased at A92.5 cents each late last year. On Friday, Ten shares closed at A89 cents. High-profile shareholders James Packer and Lachlan Murdoch paid about A$1.50 per share for their investment in Ten in late 2010. Page 12.

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Touring car racing company V8 Supercars Australia has been instructed by major owner Archer Capital to reduce costs by 10 percent with some jobs to be lost, according to informed industry observers. "V8 Supercars  has been on a strong growth trajectory to ensure that continues  a comprehensive business review in 2011  led to a restructure that involves a small number of job cuts," said a spokesman for the sport yesterday. Page 12.

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Mining magnate Nathan Tinkler said in a statement on Saturday that "the decision by the O'Farrell government [to reject the Hunter Ports proposal for a A$2.5 billion coal export terminal to be constructed in Newcastle] is condemning Newcastle to a future as Old Sydney Town despite it being the lifeblood of the New South Wales economy." There is a competing A$5 billion proposal from Port Waratah Coal Services, a company backed by miners including Xstrata and Rio Tinto, to expand the export facilities of Kooragang Island that is waiting on a decision from the government. Page 13.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Brand equity is the driving force behind GUD Holdings GUD.AX>, said its managing director, Ian Campbell, as the company philosophy is to operate with branded products. "Sunbeam owns the kitchen in Masterchef," Mr Campbell said, and whenever a Sunbeam product, such as a stick mixer, featured "the phone would ring off the hook the following day with calls asking where they could get one of those things." Page 19.

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The growth in regulatory requirements imposed on the banking industry is increasing compliance costs for banks - some of which will be passed on to customers, Australian Bankers Association chief executive Steven Munchenberg said yesterday. Banks in Australia are more apprehensive than banks overseas as they look into the future, research from the Centre for the Study of Financial Innovation and PwC to be released today shows. Page 19.

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Paul O'Sullivan, chief executive of Australia's second largest telecommunications company Optus, yesterday said the decision in 2006 to counter the aggressive strategy of rival Telstra with a A$2 billion capital expenditure program for its mobile phone network demonstrated the spirit that has built the company into the success it now is. Founding chief executive Robert Mansfield said that in the beginning Optus "was up against an incumbent with 100 percent market share  but the plan was to  obtain consistent market share from a growing industry." Page 19.

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As this year's grape harvest begins, winemakers are expecting production quality to be outstanding while production volumes should be lower than last year. Robert Hill-Smith, managing director of Yalumba, said that for 2012 the combination of rainfall and sunshine made the company "very positive about the quality of the vineyards." Orlando Wines chief winemaker Bernard Hickin said the warm weather without excessive rain or damaging heatwaves meant "we're very excited about the quality of the 2012 vintage." Page 21.

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

The big banks in Australia are being forced into more expensive deals for long-term funding. In recent weeks, Westpac Banking Corporation and Commonwealth Bank of Australia have paid a premium to raise A$6.6 billion from Australian investors. Earlier this month, Australia and New Zealand Banking Group experienced the most expensive raising of funds as it raised A$1.2 billion from European investors. Smaller banks "may now find it difficult to lend profitably" said Scott Haslem, executive director and the chief economist for Australasia at UBS, yesterday. Page B1.

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A decision on whether or not to call an extraordinary general meeting with the aim of removing the directors of contract cleaner Spotless will be made by Simon Marais, the managing director of Orbis, and Simon Conn, a senior portfolio manager at Investors Mutual. This follows the refusal of the directors to engage with private equity company Pacific Equity Partners (PEP) over the A$711 million offer PEP has made to acquire Spotless. There have been no announcements over the issue following the Spotless board meeting held last Friday. Page B3.

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For Australian bankers, the debt crisis in the euro zone and political interference are the two major threats to the banking system, according to a survey conducted by the Centre for the Study of Financial Innovation in London and PricewaterhouseCoopers. The survey covered banks globally, where the debt crisis also ranked highest overall, while political interference was fifth overall, behind liquidity and funding, excessive regulation and the risks of increased credit losses. Page B3.

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Telecommunications giants Optus and Telstra are in conflict over the Optus service TV Now that allows Optus customers to watch free-to-air television over the internet. The sporting codes Australian Football League and National Rugby League are claiming TV Now violates exclusive internet distribution deals with Telstra. The decision of Justice Steven Rares is due on Wednesday, with Telstra claiming it will rescind its current deals if the decision is in favour of Optus. Page B4.

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THE AGE (www.theage.com.au)

Nomura Group interest rate strategist Martin Whetton has noted that the central banks of Australia and Israel have a trend of moving interest rates in a similar manner with the Reserve Bank of Australia (RBA) following the lead of the Bank of Israel on 16 of the last 19 times the Australian bank has changed its rates. Another similarity is that both banks have senior officials educated at the Massachusetts Institute of Technology. In Israel the central bank has just reduced rates and the RBA meets on Tuesday next week for its next decision. Page B17.

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Annelott Gerandt, a 77-year-old widow, is mounting a court case supported pro bono by law firm Maurice Blackburn to prevent dubious business practitioner David Tweed's company Direct Share Purchasing Corporation from enforcing a contract by which Ms Gerandt was to receive about half the face value of units she held in the Colonial First State Mortgage Income Fund. The behaviour of law firm EC Legal, over some of their work for Mr Tweed described as "of unsavoury nature" by a solicitor acting for Ms Gerandt, has been referred to both the Australian Securities and Investments Commission and lawyer watchdog, the Legal Services Commission. Page B17.

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Mobil has announced there will be a "technical study" aimed at improving the supply of power to its aging Altona refinery situated in the west of Melbourne. On Christmas Day, lightning strikes caused a shutdown at ExxonMobil's Altona refinery situated in the west of Melbourne. Since the incident there have been discussions between Mobil and Powercor, the supplier of electricity to Altona. In July, the Clyde refinery in Sydney was closed by Shell with the pressures of international competition cited as the basis for the decision. Page B18.

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QBE Insurance has experienced large costs arising from the floods in Thailand that it will find difficult to cover as most of its income is from insurance written outside Australia where there has been no general rise in premiums. Premiums within Australia have risen following the catastrophes of last year. The strategy of QBE Group chief executive officer and managing director Frank O'Halloran has been to use acquisitions to grow and QBE is currently involved in a potential purchase of the non-life insurance component of HSBC. Page B20.

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