PRESS DIGEST-Australian Business News - July 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)
Fertiliser producer Incitec Pivot (IPL.AX) yesterday named James Fazzino as its new chief executive. Mr Fazzino has been acting as chief executive since April when Julian Segal resigned from the role unexpectedly; before that, Mr Fazzino was the group's chief financial officer. Mr Fazzino yesterday supported predictions that demand for fertiliser is set to increase after falling substantially last year, noting that 'if you don't apply this year you need to apply next, and so that ought to be supportive of fertiliser prices.' Page 18.
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Coca-Cola Amatil (CCL.AX) is to consider a proposal to again manufacture its own plastic bottles. CC Amatil sold its plastic bottle manufacturing operations in 2002 for A$157 million, but believes it can now make savings by moving bottle-making back on site. Analysts believe CC Amatil may be using talk of manufacturing to put pressure on its current suppliers, however, CC Amatil chief executive Terry Davis has said that improvements to manufacturing technology mean the company must re-examine the issue. Page 19.
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The chief executive of media group News Ltd's digital division yesterday said he believes people will pay for online content 'if they are given good reason to do so'. Richard Freudenstein is also a member of the News Corp NWS.N global steering committee which is examining plans to charge for online content. Speaking at an advertising industry conference, Mr Freudenstein said pay television provided an example "of customers willing to pay for a service when it has more compelling content.' Page 19.
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The board of goldmining company Dioro Exporation (DIO.AX) yesterday changed its advice to investors and gave its support to a takeover offer from rival gold producer Avoca Resources (AVO.AX). The change comes after an attempt by Dioro to sell its Frog's Leg gold mine in Western Australia failed on Tuesday, followed by Avoca announcing a slightly improved bid yesterday. Avoca is now offering one of its shares for every 2.3 Dioro shares, compared to the previous offer of one for every 2.4 shares. Page 20.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Mining company BHP Billiton (BHP.AX)(BLT.L) yesterday said it has reached agreements to sell 30 percent of its 2009 iron ore volumes outside of the traditional benchmark annual price. The contracts have been agreed on quarterly negotiated, index-based or spot prices. The miner has been pushing to abandon the traditional annual pricing system, and the change is expected to provide BHP with a A$350 million boost to profit this year. Around 23 percent of this year's iron ore volumes have been sold using the benchmark system with the rest still under negotiation. Page 19.
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Australian bank executives have supported the call from the Reserve Bank of Australia governor Glenn Stevens for the banks to start abandoning the use of the Federal Government's wholesale funding guarantee. Australia and New Zealand Banking Group (ANZ.AX) chief executive Mike Smith yesterday said he expected Australian banks would forego use of the guarantee over the next few months by 'a natural process as debt markets normalise'. Page 19.
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Investment bank Macquarie Group (MQG.AX) says it expects first-half profit to September to reach around A$435 million, an improvement on the previous half's result of A$267 million. Chief executive Nicholas Moore told yesterday's annual general meeting in Sydney that market conditions have improved, and 'all the major businesses except Macquarie Capital should increase their operational performances.' Mr Moore also said that the bank would be looking for acquisition opportunities 'across the globe'. Page 19.
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Consultancy groups KPMG Corporate Finance and McKinsey are favourites to secure the role of lead advisors to the Federal Government's national broadband network (NBN) implementation study, according to industry sources. An announcement is expected within days. The Government has said it wants the implementation study completed by the end of February. Page 20.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Investment bank Macquarie Group's chief executive Nicholas Moore yesterday dismissed criticism of the bank's role in the listing of Queensland toll road operator BrisConnections (BCSCB.AX). Analysts say the listing is seen as one of the most embarassing events in Macquarie's 40-year history, however, Mr Moore said 'none of us will know how good a project it is until it is finished and until traffic is running.' Mr Moore blamed the collapse of BrisConnections' share price on the global crisis rather than anything inherent in the project. Page 26.
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Australia and New Zealand Banking Group (ANZ) may be considering acquiring the Asian private banking business of Dutch group ING Groep (ING.AS). Analysts say that the ING assets would complement those belonging to Royal Bank of Scotland (RBS.L) in the region, which ANZ is currently bidding for. Analysts say that ANZ currently has such a high ratio of tier one capital, its returns will be eroded if it does not spend some of its cash making acquisitions. Page 26.
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National Australia Bank (NAB.AX) has announced that it will end penalty fees of between A$30 and A$40 charged to customers each time they withdraw more than is in their account. The change will apply to all personal transaction and savings accounts from the start of the bank's financial year on October 1, and is expected to reduce turnover at NAB's retail banking division by around A$100 million a year. Analysts say that Australia's other major banks are expected to soon announce similar changes. Page 27.
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Alan Joyce, chief executive of air carrier Qantas Airways (QAN.AX), yesterday said that the airline had seen some signs that a recovery is occurring, but that it is 'too early to say if the green shoots are here to stay.' Mr Joyce said one if the indicators of confidence within the sector, the cargo market, was showing signs of improvement, with some strengthening of demand for freight services between Australia and China. Mr Joyce said that despite these signs, price discounting on international routes would continue due to over-capacity. Page 27.
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THE AGE (www.theage.com.au)
Investment bank Macquarie Group has warned the Federal Government that an increase in regulation of the financial sector would lead to innovation being stifled. The bank's acting chairman, Kevin McCann, told Macquarie's annual meeting that 'regulation should not operate to stifle a financial sector from providing innovative products of utility to business.' Mr McCann also noted that Australian banks have not experienced many of the problems which have affected banks overseas. Page B1.
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Shane Oliver, the chief economist at fund manager AMP Capital Investors, yesterday said in a note to investors that the sharemarket has reached a 'sweet spot' in the economic cycle. Mr Oliver said 'this is usually a time when investors are still worried, but it is often the most prosperous time for shares.' Page B2.
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Mining company Lihir Gold's (LGL.AX) planned sale of its Ballarat gold project in Victoria has attracted interest from Bendigo Mining (BDG.AX). Any offer would only come after conducting due diligence on the ability of the failed Ballarat operation to succeed on its higher-grade northern leases. Lihir is selling the project after it failed to reach production despite expenditure of more than A$430 million. Page B3.
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Air carrier Virgin Blue (VBA.AX) yesterday raised A$133 million from institutional investors via a heavily discounted share issue. The airline is expecting to raise a further A$98 million from retail investors as it seeks to improve its balance sheet. Following the placement, shares in the company emerged from a trading halt and ended the day 1 cent higher at 30 cents. The new shares are being issued at 20 cents each, a 31 percent discount to their closing price on Friday. Page B3. --
