PRESS DIGEST-Australian Business News - Aug 7
THE SYDNEY MORNING HERALD (www.smh.com.au)
The latest home-loan data decreased the chances of the major five banks opting not to pass on an interest rate reduction by the Reserve Bank of Australia (RBA), observers said yesterday. New residential mortgage commitments slumped 25 percent during the first half of the year to their lowest level in 20 years. Before the figures were released, Australia and New Zealand Banking Group chief economist Saul Eslake had said banks might pass on less than the 0.25 of a percentage point rate cut expected by the RBA. Page 27.
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AngloGold Ashanti said yesterday that the Federal Government's planned emissions trading scheme (ETS) posed a serious threat to the gold mining sector. The company's Australian-born chief executive, Mark Cutifani, said the ETS could push up costs by A$24 million a year at AngloGold Ashanti's Tropicana joint venture with Independence Group in Western Australia. "It may mean the difference between Tropicana getting up and Tropicana not getting up," Mr Cutifani said. Page 27.
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Becton Property Group yesterday downgraded its assets by A$46 million, blaming uncertainty in the investment apartment market and a decline in the value of its funds under management. The company sought to dispel investor fears that it would be unable to pay the A$50 million instalment it owes Estate Property investors. Chief operating officer Matthew Chun said Becton would use proceeds from assets already sold "to retire debt and…take our gearing lower than the current 45 percent." Page 27.
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Anglo-Swiss miner Xstrata (XTA.L) has launched a US$10 billion (A$10.9 billion) hostile takeover bid for platinum group Lonmin, in which it has an 8 percent stake. Lonmin, which has seen its shareprice weaken recently, rejected the offer as "opportunistic and entirely unwelcome." Xstrata, a potential buyer of Queensland-based Macarthur Coal and Felix Resources, also signalled it remained open to a merger with another global resources company such as Brazil's Vale or Anglo American. Page 27.
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THE AGE (www.theage.com.au)
Australian National University economist Warwick McKibbin has called on the Federal Government to seek bipartisan support for its carbon reduction scheme to prevent the legislation from getting bogged down in the Senate. "I am hopeful that the…Government and the Opposition will see that their policy positions today are very similar," Professor McKibbin, a Reserve Bank of Australia board member, said yesterday. Page B1.
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Figures released yesterday by the Property Council of Australia (PCA) show office vacancy rates in Melbourne have fallen to a record low and are lower than Sydney's for the first time in 18 years. Melbourne office vacancy dropped 3.1 percent in the six months to June 30, down from 4.4 percent in January. In Sydney, vacancy rose to 4.3 percent from 3.7 percent, and the market remains weak. The PCA's Victorian director, Jennifer Cunich, said the Melbourne data should prompt greater infrastructure investment by the State Government. Page B1.
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Car brake manufacturer Pacifica Group PBB.AX has posted a first-half net loss of A$37.84 million, compared with a A$14.05 million loss in the previous corresponding period. The company forecast another operating loss in the second half of the year, citing "no immediate prospect of an improvement in the highly challenging industry conditions." Pacifica, which is 76.5 percent owned by German group Robert Bosch GmbH, said the move by North American automotive makers towards smaller vehicles had affected demand for its products. Page B2.
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Metcash (MTS.AX) has dismissed a finding by the competition regulator that the grocery wholesaler was in an advantageous position as the main supplier to independent retailers. The Australian Competition and Consumer Commission (ACCC) said this made it harder for independent stores to compete with dominant supermarket groups Coles and Woolworths. Metcash chief executive Andrew Reitzer said yesterday that, contrary to the ACCC report, Metcash had helped independent retailers make "significant gains in sales, market share and brand recognition." Page B3. --
