The Border Watch : February 10th 2015
Business Holden to ditch 30 SA workers ADELAIDE: About 30 South Australian Holden workers will lose their jobs as the company scales back production amid falling sales. The car maker said it would reduce its daily output at its Elizabeth production line in Adelaide’s northern suburbs from 310 to 290 vehicles from March 2. It’s believed about 30 contract workers will lose their jobs as a result of the change. “This move will better align production with demand and support our plan of continuing to build world-class cars in Adelaide until the end of 2017,” Holden said yesterday. “There will be no reduction to full-time staff numbers but a small number of contract-labour workers will be impacted.” Australian Manufacturing Workers Union spokesman Scott Batchelor said more jobs could be lost at the plant later this year. “I would expect there will be a major re-rate at some point in this year,” he said. “There would have to be some redundancies at some point this year.” Holden said it was taking appropriate steps to support staff who would lose their jobs. AAP Dollar dips on US jobs data SYDNEY: The Australian dollar has fallen sharply after the release of strong American employment figures and disappointing Chinese trade data. At yesterday’s close, the local unit was trading at US77.77c, down from US78.41c on Friday. China’s trade surplus rose 88 per cent in January, because of a large fall in imports. RBC senior currency strategist Sue Trinh said the Chinese data added to the Australian dollar’s losses. AAP CBA set for $4.5b half-year profit SYDNEY: Commonwealth Bank’s profit is expected to have hit a record of at least $4.5 billion in the first half of the financial year, as it rides the wave of a booming housing market. The country’s biggest lender is also expected to increase its interim dividend to shareholders, but analysts are questioning whether either factor is enough to justify CBA’s soaring share price. The bank’s first-half results are out tomorrow and the consensus forecast among analysts is for an improvement of about $250 million in cash profit, to $4.54 billion. The key driver of that growth is again expected to be CBA’s retail operations, which now account for about half of its earnings, as low interest rates fuel increased home lending. The massive profit will grab headlines, and shareholders will welcome a higher dividend, which is expected to rise 9 per cent to $2. After a rapid ascent in CBA’s share price since 2012, the bank has overtaken BHP to be the largest on the local share market, with a market capitalisation of more than $150 billion. Its shares last week hit a record of $93.96, which values it at more than 16 times the $9 billion-plus it’s expected to earn this financial year. That’s on the pricey side for a company with expected earnings growth of about 6 per cent, but what really has analysts scratching their heads is how that share price compares with the value of the bank’s assets. CBA’s market value is well over double the value of its assets. On that measure it is the most expensive bank in the world, but according to IG market strategist Evan Lucas that’s probably not going to change after tomorrow. “Anybody looking at the fundamentals would tell you they are overvalued, but they’ve been saying that for three years,” he said. CBA shares, like those of its rivals among the big four, and Telstra, have been key beneficiaries of record low interest rates, Mr Lucas said. AAP Business is buzzing for Capilano SYDNEY: Capilano has lifted its first half net profit by 73 per cent after it sold more honey overseas and benefited from higher local prices. The honey supplier’s export sales lifted by 19 per cent, and its share of the domestic market grew as it expanded its range of branded products. Capilano yesterday reported a net profit for the six months to December 31 rose to $3.6 million, from $2.07 million a year earlier. Increased competition among honey packers for supplies in a period of reduced domestic production had resulted in beekeepers getting a higher price for their product, and helping them to remain economically viable, Capilano said. The company said it had recovered the increased raw material cost by lifting wholesale prices. in Brief Ansell lifts profit but future cloudy MELBOURNE: Protective clothing and condom maker Ansell’s profit has grown by 34 per cent but the company has sounded a warning about looming economic storm clouds. Ansell’s profit of $US87.7 million ($113 million) in the six months to December 31 was its “best-ever result”, according to chief executive Magnus Nicolin. The company has maintained its full-year guidance of earnings per share growth of between 7 and 15 per cent, a forecast Mr Nicolin later defended. “Some of you might say why are you doing that after such a strong first half … the world has become even more uncertain in the last three to four months,” he said. JP Morgan probed over China hiring BEIJING: Investment bank JP Morgan is reportedly being investigated by US authorities for hiring the son of China’s commerce minister despite him being one of the worst candidates its recruiters had seen. Gao Jue, son of minister Gao Hucheng, was hired by JP Morgan and kept on during major job cuts despite an extremely poor performance, and after he inadvertently sent a sexually explicit email to human resources, the Wall Street Journal reported. Market’s record run comes to an end Business is sweet: Capilano’s profits are up after selling more honey overseas. Picture: AAP Recent rain should help lift local honey production as trees respond with increased flowering RBA boss launches Chinese currency hub SYDNEY: Reserve Bank governor Glenn Stevens has made his first public appearance since last week’s historic rate cut, launching Australia’s official Chinese renminbi trading hub. Mr Stevens yesterday launched the Bank of China in Sydney as the official local clearing bank for the Chinese currency. Sydney is now one of just a handful of locations for the clearing of transactions in yuan, also known as the renminbi. The trading hub was announced last year as a side deal to Australia’s free trade agreement with China, as part of an agreement between the RBA and its Chinese counterpart, the People’s Bank of China. The establishment of the official clearing bank would help strengthen trade relations between China and Australia, helping to open up China’s economy to Australian businesses, Mr Stevens said. It was Mr Stevens’ first public appearance since the RBA’s decision last week to slash the cash rate to a new record low of 2.25 per cent, although yesterday’s speech made no mention of monetary policy. AAP 10 - The Border Watch, Tuesday, February 10, 2015 patterns, it added. Capilano said international interest in its premium products continued to grow and it had expanded its product range in the Middle East and Asia. AAP Huffington Post to launch Down Under SYDNEY: The Huffington Post is on its way to Australia, with the US group partnering with Fairfax Media to set up a local version of its popular news website. Following in the footsteps of recent arrivals by UK media groups The Guardian and the Daily Mail, HuffPost Australia is expected to launch by the middle of the year. The move makes Australia the 14th stop on the Huffington Post’s international expansion, which has seen websites established in France, the UK, Japan, Germany, Brazil and India. “I’m thrilled that HuffPost and Fairfax Media are joining forces to launch HuffPost Australia,” founder Arianna Huffington said. “Its not only a milestone in HuffPost’s global expansion – we are now in 14 countries, on six continents – but a tremendous opportunity to expand our global conversation.” The Huffington Post will own 51 per cent of the joint venture, while Fairfax will own 49 per cent, under a similar model to that used by HuffPost in other markets. AAP PERTH: The share market’s stellar run has come to an end as a sharp drop in Chinese imports caused weakness in the mining sector. Australia’s biggest trading partner, China posted its sharpest slide in imports in more than five years, indicating a drop in demand for coal and iron ore. The trade data set the tone for a weaker day on the market, as investors stayed on the sidelines after a run of 12 consecutive sessions of gains, IG Market analyst Stan Shamu said. AV Jennings builds a profit increase SYDNEY: House and land packages group AV Jennings has lifted its first-half profit by 42 per cent and expects even more contracts to be signed than previously forecast. Chief executive Peter Summers said low interest rates, strong consumer confidence and housing shortages, particularly in Sydney and Auckland, were helping. Sydney was the strongest market with healthy demand in Brisbane also boosting its prospects on the Gold and Sunshine coasts, he said.
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