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Aug 25, 2011

The Australian Business Briefing: Stevens signals rates on hold:



Stevens signals rates on hold
Glenn Stevens James Glynn THE RBA appears set to keep rates on hold for now as turmoil on world markets outweighs concerns over reining in inflation.
Fairfax swings to $391m loss
Fairfax Media Gavin Lower FAIRFAX Media has swung to full-year loss of $390.9 million after writing down the value of its titles.
Lend Lease sees bright spot
Steve McCann, Lend Lease CEO Turi Condon, Property editor LEND Lease singled out Australian infrastructure as a future bright spot as it posted a 43 per cent lift in net profit today.
ASX names Funke Kupper as CEO
Elmer Funke Kupper John Durie ASX Ltd has confirmed the appointment of Elmer Funke Kupper as its new CEO on a $4 million package, replacing Rob Elstone.
Perpetual jumps on buyback
Perpetual Richard Gluyas PERPETUAL shares surged more than 12 per cent after the fund manager called a $70 million buyback and a generous final dividend.
Sims profit tops forecasts
Sims Metal David Fickling SIMS Metal's annual profit beat market expectations but uncertain economic conditions prevented specific 2011-12 guidance.
Fresh fears of Greek default
eurozone debt Riva Froymovich NEW default fears emerged after Finland's demands for collateral to participate in the Greek bailout remained unresolved.
GPT books 67pc profit jump
GPT headquarters, Sydney Ross Kelly REAL estate investment trust GPT reported a 67 per cent jump in first half profit after cutting debt and focusing on local assets.
Financial Markets
Shares flat before Fed speech
ASX THE sharemarket was flat by early afternoon, falling back from early gains as nervous investors await a Ben Bernanke speech.
Europe extends short-sale ban
Wall St slides as Fed hopes fade
Financial Markets Coverage
Mining & Energy
Sims profit tops forecasts
Sims Metal David Fickling SIMS Metal's annual profit beat market expectations but uncertain economic conditions prevented specific 2011-12 guidance.
Gold cautiously edges higher
Oil climbs on Hurricane Irene
More Mining & Energy

Smartcompany News & Analysis: Warren Buffett’s $US5bn bet, Family travel company bought out, 10 classic Steve Jobs videos, Rinehart beats Gillard on most influential women list

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Dear SmartCompany reader,
Today on SmartCompany we look at Warren Buffett’s $US5 billion bet on the US economy, ask how Gina Rinehart outranked Prime Minster Julia Gillard on a list of the most influential women in the world and look back at 10 classic videos from Steve Jobs’ brilliant career. Plus in Entrepreneur Watch, James Thomson asks whether suggestions online retail is less than 4% of total retail spending in Australia hides the real story about the rise of the internet.

For all this and more, head to our home page.

How I
How I balance running a business with writing novels
Interactive's Christopher Ride explains why more business owners need to learn how to write well. BY PATRICK STAFFORD.
Chris Ride

Marketing Strategies
High growth ventures are different
The differences between the strategy and marketing approaches of low growth firms compared to high growth firms are significant, and the results speak for themselves. BY TOM MCKASKILL.
Marketing Strategy

Aunty B
Should I ban the sweets?
Turn it into a occupational health and safety issue – which it is.
Aunty B

Selling strategies
Trent Leyshan
Despite what some entrepreneurs believe, taking risks is not a silver bullet to success.
Trent Leyshan

Gen-Y Millionaire
Kirsty Dunphey
There's a time and place for formal and respectful, but real and personable customer service is what really makes an impact.
Kirsty Dunphey

Female Entrepreneur
Naomi Simson
The reality is that there is gold in every experience, we just need to have the clarity of mind and commitment to listen for it.
If I knew then what I know now

The Futurist
Colin Benjamin
The reality is that the political divide between short-term fear and longer-term optimism rather than fact will continue to drive business and consumer confidence over the coming year.
Colin Benjamin

Entrepreneur Watch
James Thomson
Shopping centre owners have produced data to show online retail is only a fraction of total retail sales. But does that tell the whole story?

Asia range-bound ahead of Bernanke: MarketWatch | Asia Markets


By Sarah Turner, MarketWatch 

SYDNEY (MarketWatch) — Stocks trading in Asia held in a tight range Friday, with investors apparently unwilling to make bold moves ahead of a U.S. Federal Reserve conference in Jackson Hole, Wyoming.
Indexes swung between positive and negative territory during the morning with Hong Kong’s Hang Seng Index HK:HSI +0.01%  up 0.7% and China’s Shanghai Composite index CN:000001 -0.47%  down 0.4%.
Japan’s Nikkei Stock Average  declined 0.1% in the morning session, while South Korea’s Kospi KR:0100 +0.26%  rose 0.3% and Australia’s S&P/ASX 200 index AU:XJO -0.20%  slipped 0.1%. 
U.S. shares closed down on Thursday to break a three-session run of gains, with investors anxious ahead of a speech by Federal Reserve Chairman Ben Bernanke set for 10 a.m. U.S. Eastern time Friday. Read more on U.S. stocks 
 
“The scope for market surprises is large, in our view,” said strategists at Barclays Capital.
“Bernanke may disappoint the market in different ways, or surprise it by delivering a strong speech in favor of quantitative easing and the benefits of its former versions,” they said. Read Bernanke speech preview. 
 
The muted moves for the broader stock indexes concealed some larger changes for the stocks of individual firms.
Some banks were under pressure, with Daiwa Securities Group Inc. JP:8601 -2.60%   DSEEY +1.02%  down 2.6%, and Shinsei Bank Ltd. JP:8303 -1.19%   SKLKY -2.23%  falling 1.2% in Tokyo. 

Insurance firms were weak in Hong Kong, with Ping An Insurance Group Co. HK:2318 -1.44%   PNGAY -2.46%  down 1.1% and AIA Group Ltd. HK:1299 -1.35%   AAGIY -0.54%  down 1%. 

In the energy sector, shares of Japanese oil firm JX Holdings Inc. JP:5020 +2.63%   JXHGF 0.00%  climbed 2.6%, while Caltex Australia Ltd. AU:CTX +2.13% CTXAY 0.00%  rose 2.2% in Sydney.
Benchmark Nymex crude-oil futures staged a late rebound in regular trading on Thursday as the approach of Hurricane Irene heightened concerns about refinery production on the East Coast of the U.S. Read more on oil futures. 
 
However, Hong Kong-listed oil giant PetroChina Co. HK:857 -1.68%   PTR +0.19%  lost 1.2% after reporting results.
Also in Hong Kong, strong first-half earnings boosted Industrial & Commercial Bank of China Ltd. HK:1398 +3.92%   IDCBY -0.41%  up 4.1%, and Jiangxi Copper Co. HK:358 +1.47%   JIXAY -2.22% , up 2.7%.
Australian media group Fairfax Holdings Ltd. AU:FXJ +7.74%   FFXLY 0.00%  surged 7.7% — even as it swung to a fiscal-year loss — after the firm said that it will push ahead with an initial public offering of one of its units. 
Sarah Turner is MarketWatch's bureau chief in Sydney.

Japan’s leadership change may ease gridlock: Japan Politics | MarketWatch



By Sarah Turner, MarketWatch

Reuters
Japan’s soon-to-depart Prime Minister Naoto Kan (at right).
SYDNEY (MarketWatch) — Japan is expected to get a new leader next week, with the move potentially helping to ease the path of policy making and end gridlock that has stymied attempts to heal the economy.
Japan’s current prime minister, Naoto Kan, has reportedly said that he expects his successor to be in office by Monday, when a party leadership election is slated, one day before the current lawmaking session ends. Read more on potential leadership change in Japan.
A change of leader may help the Democratic Party of Japan, in power since 2009, weather the storm of criticism that followed its handling of the earthquake and tsunami that devastated the country in March and led to one of the world’s worst nuclear disasters.
Of DPJ lawmakers expected to compete for the leadership, former foreign minister Seiji Maehara has gained the most popularity with Japanese voters, according to a Kyodo news service report this week.
 
How Japan stretched their low interest rates Japan's extra-low interest yields have led investors to seek out new opportunities for growth. But the so-called "double-decker" fund expose retail investors to high-yield, risky emerging markets. (Photo: Reuters.) 

Other leading candidates include Finance Minister Yoshihiko Noda, former environment minister Sakihito Ozawa, Minister of Agriculture Michihiko Kano, Economy Minister Banri Kaieda, Osaka legislator Shinji Tarutoko and Nara lawmaker Sumio Mabuchi, according to Nomura Securities research.
Kan’s successor would be the country’s sixth prime minister in five years, and the rapid-fire turnover in leadership was referenced by Moody’s Investors Service in its downgrade of Japan’s credit rating Wednesday. 

Moody’s criticized “frequent changes in administrations” as holding back development of the long-term policies needed to reduce the country’s debt pile. 

The agency lowered Japan’s rating to Aa3 from Aa2, also citing the large deficits and the buildup in government debt since the start of the last global recession. Read more on Moody's downgrade.
Takahide Kiuchi, analyst at Nomura, said that “the markets had thought it would only be a matter of time before Moody’s took this step, which we think was designed to send a message to the incoming government about the need for fiscal discipline.”

Political turnaround?

Another change of leadership could herald fresh zeal toward addressing the country’s economic challenges, some analysts believe. 

“Any type of greater cooperation between the leading and the opposition parties would mean a reduction in gridlock and greater probability for the passage of legislation. There has been forced co-operation ... but that’s not really a situation that can last forever,” said Naomi Fink, equity strategist at Jefferies in Japan.
Fink noted that Kan has made his resignation contingent on the passage of the budgets, the deficit-bond bill and the renewable energy bill through parliament.
She also offered some praise for Kan: “No other [Japanese] lame-duck leader has thought ‘I’ve got nothing to lose’ and really pushed ahead with key legislation that might not have otherwise passed.”
Kenichi Kawasaki at Nomura said that Kan’s successor is likely to continue to try to implement key economic policies already under consideration.
Kawasaki also believes that “the installation of a new administration would speed up decisions on key economic policies that have been delayed.”
The Japanese government has introduced two supplementary budgets since March to finance reconstruction efforts following the earthquake. A third budget is set to be introduced later in the year, which the Nomura analysts said will herald the introduction of 13 trillion yen ($168 billion) of spending over five years.
A bill aimed at issuing bonds in 2011 to help cover the country’s deficit is expected to be enacted shortly, securing about 40% of the ¥37 trillion revenue needed for the country’s fiscal-year budget, according to reports.
Kawasaki at Nomura also expects the gridlocked debate on raising consumption tax to move forward with a new leader. 

Still, the widely held view is that fiscal policy needs to change longer-term in Japan.
“Continuously issuing debt into a vacuum is not a productive enterprise and is not sustainable,” Fink said.
“The whole point of loose fiscal policy is to engineer growth, and that growth must take place in order to justify the issuance of that debt, and for 20 years it hasn’t. So far, you have very little to show for it,” she said. 

“If you compare the return on equity for the S&P [500 index SPX -1.56%  ] with the return on equity in Japan, it’s much lower,” she said. 

Sarah Turner is MarketWatch's bureau chief in Sydney.

Hong Kong shares fall in early trade, but ICBC up: MarketWatch | Asian Markets - Market pulse


By V. Phani Kumar 
 
HONG KONG (MarketWatch) -- Hong Kong shares declined early Friday as a sell-off in U.S. and European markets put investors on the backfoot ahead of Federal Reserve Chairman Ben Bernanke's speech later in the day. The Hang Seng Index HK:HSI -0.19% fell 0.4% to 19,672.88 and the Hang Seng China Enterprises Index lost 0.4% to 10,386.08. Mixed reports from a slew of blue-chip companies produced divergent stock movements, with Industrial & Commercial Bank of China Ltd. HK:1398 +1.65% IDCBY -0.41% , China Southern Airlines Co. HK:1055 -1.30% ZNH +2.67% and Jiangxi Copper Co. JIXAY -2.22% HK:358 +0.98% rising 1.9%, 1.3% and 0.7%, respectively, on strong half-yearly performance and despite the weak market. In-line or weak results dragged down shares of PetroChina Co. PTR +0.19% HK:857 -1.47% , Agricultural Bank of China Ltd. HK:1288 -0.26% and shipping major China Cosco Holdings Co. HK:1919 -2.63% CICOY -3.68% by 1.7%, 0.3% and 2.6%, respectively. China's Shanghai Composite Index CN:000001 -0.56% gave up 0.6% to 2,600.96.