The Border Watch : January 20th 2015
Business Aussies’ savings ‘worst in world’ PERTH: Australians face a 13-year shortfall in retirement funds, and almost half the population admit they are not adequately prepared. HSBC’s Future of Retirement research showed Australians’ savings rates were among the worst in the world. The global survey of 16,000 showed Australians expected their retirement to last an average of 23 years, but their savings and investments were on track to run dry within 10 years, making it the largest gap in Asia and the fourth-largest globally. The research also revealed more than half of the nation had never saved specifically for retirement outside of compulsory superannuation. “Australians are in denial about retirement planning” “Australians are in denial about retirement planning,” HSBC head of retail banking and wealth management Graham Heunis said. “Being concerned is not enough, the next generation need to take action and start saving now.” Globally, an average of 39 per cent of people have not saved or are planning to save for retirement, compared to 53 per cent in Australia. With wage growth in Australia now slowing to 2.6 per cent a year, the lowest rate of growth since 1998, many Australians were struggling to afford retirement, Mr Heunis said. The research found more than a third of retirees felt their preparation was insufficient and half felt they should have started saving at 30. iron ore to grow as oil cuts loom MELBOURNE: Megaminers BHP Billiton and Rio Tinto are expected to announce more record iron ore production numbers this week despite the commodity’s price dive. However, the oil price crash has analysts tipping that BHP will announce a reduction of nearly $304 million in exploration spending on US shale oil and gas. When the big miners last reported production numbers in October, they were criticised for over- producing and driving down the price of iron ore. Since then the price has fallen further from $97 a tonne to less than $85. Rio and BHP are still profitable at those prices. Analysts think that after a busy fourth quarter Rio will announce today it slightly beat its own iron ore sales guidance for the year of 300 million tonnes. BHP was also expected to have notched up 2 per cent gains in production from the previous quarter to more than 63 million tonnes. It is only the second quarter for BHP, but it is on target to beat full-year WA iron ore production guidance of 245 million tonnes, analysts from RBC Capital Markets and Deutsche Bank said. They are predicting production falls in BHP’s crucial petroleum division, due to seasonal factors that led to a strong previous quarter. Deutsche Bank has production down 8 per cent to 61.8 million barrels while RBC predicts an 11 per cent decline to 60.2 million. “An update on the US onshore drilling strategy is likely,” Deutsche Bank analyst Paul Young said. “We forecast a drop in quarterly spend from $1088 million to $791 million.” That view was reinforced by reports that major US onshore BHP contractor Schlumberger would slash 9000 jobs out of its workforce of 126,000 in anticipation of a decline in sector drilling activity. Qantas, Virgin see clear skies ahead AAP SYDNEY: After a disastrous 2014, this year is shaping up to be much better for Qantas and Virgin Australia, with lower fuel prices and a pull-back from a bruising battle for market share set to lift profits. According to ratings agency Moody’s, the recent slide in oil prices will benefit airlines much more than their passengers as they use lower fuel costs to boost profit margins, rather than reduce fares. Moody’s latest report on the global aviation industry suggests airline’s profit margins – the percentage of revenue a company gets to keep as profit – would rise from between 8.5 and 9.5 per cent on average last year to between 12 and 14 per cent this year. The lower fuel price should help both Virgin and Qantas, which impose substantial fuel surcharges on customers. Qantas has an annual fuel bill of $4.5 billion, though its hedging program will reduce the benefit it receives SPC takes aim at cheap tomatoes SYDNEY: Fruit processor SPC Ardmona alleges the dumping of imported Italian tomatoes is squeezing its profits. The company, owned by Coca- Cola Amatil, lodged a complaint with the Anti-Dumping Commission in November, claiming Italian firms Feger and La Doria had sold preserved tomatoes well below their normal value. Commissioner Dale Seymour confirmed yesterday the federal government agency would investigate SPC’s allegation that cheap tomatoes from Italy, sold during 2014, had reduced its profits, profitability, sales volumes and market share. If the commission concludes dumping has happened, Industry Minister Ian Macfarlane would have Fight ripe: SPC has accused Feger and La Doria of price dumping. the power to have interim dumping tariffs imposed on the produce. The commission previously investigated Feger and La Doria in 2013 and decided to exempt the companies from such fees. 10 - The Border Watch, Tuesday, January 20, 2015 AAP AAP in Brief Macquarie set for best post-GFC profit SYDNEY: Macquarie Group is on track to post its biggest profit in eight years as the lower Australian dollar and improved market activity bolsters its earnings. The investment group has lifted its full-year guidance, flagging a profit increase of between 10 and 20 per cent for the year to March 31. Previously, Macquarie had expected net profit to be “slightly higher” than the $1.27 billion profit recorded in 2013-14. OzForex slumps on Westpac move SYDNEY: OzForex shares dived by more than 10 per cent after one of its major banking partners decided to sever ties to the foreign exchange business. The company’s shares slumped on news Westpac would no longer provide banking services to OzForex as part of a broader withdrawal from the money service industry. OzForex has been a customer of Westpac since 1998. Marijuana firm joins share market PERTH: A medical marijuana company is preparing to join the share market as debate over legalisation fires up. Perth-based Phytotech Medical will target regulated medical cannabis markets in the US, Canada, Israel and Europe, and hopes to introduce products to Australia and New Zealand if laws permitting marijuana’s use are introduced. Looking good: Lower fuel prices will help Qantas lift profits this financial year. from the halving of oil prices since mid-2014. The report said Qantas and Virgin had some of the weakest profit margins in the industry as a result of a fight for market share that saw both companies Picture: AAP continue to lift capacity – by adding more planes and services – and lowering fares. Retail, construction boost NSW economy SYDNEY: Buoyant retail and housing construction sectors are largely to thank for NSW being named the nation’s best performing state economy, Treasurer Andrew Constance says. The latest CommSec State of the States report, released yesterday, ranked both the NSW and NT economies in first place. Western Australia, which held top place for three years until late last year, fell to third, followed by Victoria in fourth and Queensland in fifth. Tasmania was last on the list. Mr Constance said it was pleasing to see NSW take top spot in the report. “The state government continues to invest in housing, jobs and in particular public infrastructure,” Mr Constance said yesterday. “It’s very pleasing to see the fact that NSW has been reaffirmed again as the number one state ... driven by retail, driven by housing construction.” The report, published quarterly, ranks the states and territories on eight key measures, including economic growth, unemployment, retail spending, housing finance and population growth. NSW came out on top thanks to population growth and healthy home building responding to a shortage of housing, the report found. Mr Constance also used the occasion to reiterate the government’s call to relax Boxing Day trading hours in the retail sector. New car sales rise in December AAP SYDNEY: New car sales bounced last month, despite sharp falls in the Australian dollar. Sales were up 3 per cent in December compared to November, with 94,903 cars sold. But overall, sales were still 1 per cent lower over the year, according to seasonally adjusted figures from the Australian Bureau of Statistics yesterday. Gas price hike killing confidence – ACCI AAP CANBERRA: Rising power prices are affecting economic confidence and a comprehensive domestic gas policy is needed, a key business group says. Kate Carnell, chief of the Australian Chamber of Commerce and Industry, said businesses were “pretty depressed” after a poor Christmas period. “Lots of businesses use gas and we are predicting quite a significant increase in gas prices,” Ms Carnell said.
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