The Border Watch : October 29th 2013
BUSINESS Market lifts to five-year high Winemaker faces class action over writedowns MELBOURNE: Shareholders of Treasury Wine Estates are set to take legal action against the winemaker over writedowns on excess stock in the US. Litigation funder IMF and Maurice Blackburn lawyers announced the funding of the class action yesterday. “The class action will allege that Treasury Wines misled the market and breached its continuous disclosure obligations in relation to the financial impact of over-stocked US distributors,” IMF and Maurice Blackburn said in a joint statement. “The action will be on behalf of Treasury Wines shareholders, who lost millions of dollars when the company revealed the full extent of the problem in July.” On July 15, TWE announced up to $160 million in writedowns as a result of excess stock being held by US distributors. The impairment included a $33 million provision to destroy six million bottles of out-of-date wine. “Treasury Wines’ management told the market on multiple occasions throughout the 2013 financial year that the company’s earnings would grow whilst it adequately managed its US distributors inventory levels,” IMF (Australia) investment manager Simon Dluzniak said. “We allege the market was not told the US distributor inventory levels of some brands were so high that Treasury Wines was at risk of having to destroy excess stock or give rebates or discounts to the distributors for excess, aged and deteriorating inventory.” PERTH: The Australian sharemarket has closed at a five-year high as the major banks lifted ahead of the release of NAB and ANZ results. CommSec analyst Steven Daghlian said the 1 per cent gain was the ninth positive finish in 10 days. “This is the best winning streak for 2013,” Mr Daghlian said. Less likelihood of the US central bank ending its stimulus program, a strong result on Wall Street and positive Chinese economic data last week had all contributed to the good result yesterday. “We’re seeing all-time highs in a number of different areas, with three of the big four banks sitting at their best levels ever,” Mr Daghlian said. While NAB was not trading at record highs, it is still the best performing bank this year, he said. Since the recent US debt Bank rose 60c to $36.68, Commonwealth Bank gained $1.12 at $77.40, and Westpac climbed 25c to $34.61. National Australia Bank and ANZ release their full-year results this week. “We’re seeing all-time highs in a number of different areas, with three of the big four banks sitting at their best levels ever.” ceiling agreement, global markets have been pushing higher as investors show more willingness to take risks in the absence of bad news. Among the major banks, ANZ was up 58c at $33.24, National Australia In the resources sector, BHP Billiton was up 44c at $37.85, and Fortescue Metals rose 21c to $5.42. The Australian dollar traded in a narrow range as investors await information from the Australian and US central banks. At the close yesterday, the local unit was trading at US 96.05c, unchanged from Friday. All eyes will be on the outcome of the Federal Open Market Committee’s policy meeting, which finishes on Thursday morning, with investors awaiting a decision on when the US central bank will begin winding down its economic stimulus program. “It’s been a pretty quiet day and I think it’ll be a pretty quiet week until Thursday when we get the FOMC decision in the US,” Commonwealth Bank currency strategist Peter Dragicevich said yesterday. Small banks left fighting – Bendigo SYDNEY: The head of Australia’s largest regional lender says current banking regulations have left it “having to fight with one hand tied behind our back” compared to the big four banks. Bendigo and Adelaide Bank chief executive Mike Hirst says regulations put in place since the global financial crisis have put smaller lenders at a disadvantage compared to their larger counterparts. “Size is a powerful ally in any endeavour. In banking in Australia, it provides larger players with funding and regulatory advantages that ultimately restrict consumer choice,” he said yesterday. “It should be obvious the impost of regulation is more acute the smaller an institutions is, simply because there is a certain fixed cost of regulation that is diluted depending on how many transactions it is spread across.” Mr Hirst said he hoped – AAP the Abbott government’s planned financial services inquiry would consider ways to level the playing field for smaller lenders. – AAP IN BRIEF Rio Tinto sells Clermont Mine SYDNEY: Rio Tinto has agreed to sell its majority stake in its Clermont coal mine, in central Queensland for more than $1 billion. The mining giant will sell its 50.1 per cent stake in the Clermont mine to GS Coal, a joint venture owned by Glencore Xstrata and Sumitomo Corporation for $1.06 billion. Rio has announced or completed $US2.91 billion of divestments since the start of the year. Chief executive Chris Lynch said yesterday the sale was in the best interests of shareholders. Coffee Club expands into Persian Gulf BRISBANE: The Coffee Club cafe chain, which started in Brisbane two decades ago, plans to open 100 new outlets in the Persian Gulf. The group has signed a licensing agreement with Liwar Minor Food & Beverages to open cafes in the Gulf Co-operation Council region, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, by 2023. The Coffee Club owns 335 cafes in seven countries, including more than 260 in Australia. Health clubs boost Ardent revenue MELBOURNE: A solid performance from its health clubs division has helped boost first-quarter revenue and earnings for Ardent Leisure Group. The leisure and entertainment provider yesterday released unaudited revenue and earnings figures for the three months to September 30. Group revenue rose 19.8 per cent to $126.2 million, and earnings before interest, tax, depreciation and amortisation lifted 19.4 per cent to $32.3 million compared to the prior corresponding period. Telstra trials mobile internet broadcasts – AAP Unfair game: Bendigo and other small banks are put at a disadvantage by regulations compared to the big four, chief executive Mike Hirst says. Picture: AAP Greenland shares spike after uranium vote PERTH: Shares in Perthbased minerals explorer Greenland Minerals and Energy have spiked after Greenland’s parliament voted to remove a 25-yearold ban on uranium mining. Greenland Minerals shares rose 5.5c, or 17.2 per cent, to 37.5c at 1308 AEDT after surging 37 per cent in early trade. The shares closed almost 10 per cent higher at 35c. On Friday, Greenland’s parliament narrowly backed the centre-left governing coalition’s desire to remove the uranium ban which was imposed by Denmark in 1988. Greenland Minerals and Energy, which is focused on developing rare 8 - The Border Watch, Tuesday, October 29, 2013 earth elements, uranium and zinc projects in the environmentally sensitive area of Southern Greenland, hopes the decision will pave the way to develop its Kvanefjeld project. “The company looks forward to continuing discussions on the Kvanefjeld project with Greenland stakeholders and regulators in order to finalise the development strategy of what is emerging as a worldclass mining opportunity in Greenland,” managing director Roderick McIllree said. The Australian-listed explorer has conducted a pre-feasibility study on Kvanefjeld which it says demonstrates the potential for a “large-scale, costcompetitive, multi-element mining operation” on Greenland’s southern tip. Mr McIllree added the company would push ahead with the Kvanefjeld project in agreement with both Greenlandic government and local community expectations. – AAP SYDNEY: Telstra has begun a world-first trial of new mobile internet technology that can broadcast a single stream of data to multiple users simultaneously. The telco began testing long-term evolution broadcast technology yesterday, Telstra’s acting head of wireless network engineering, Channa Seneviratne said in a blog post. It is the first time LTE-B has been tested live on a commercial network, he said. The new technology is akin to the way TV stations broadcast a single program to multiple TV sets.
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