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The Border Watch : November 5th 2013
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BUSINESS Consumers upbeat as retail spending rises IN BRIEF SYDNEY: Retail spending rose for the fifth month in a row in September, driven by strong department store sales and a bounce in consumer confidence. The better-than-expected spending figures have the industry hopeful of the strongest Christmas period in several years. Retail trade grew by 0.8 per cent in September Inflation leaves rate cut door ajar SYDNEY: Inflation is expected to remain benign to the end of the year, despite the falling Australian dollar, leaving the door open for a rate cut. The TD Securities/ Melbourne Institute Monthly Inflation Gauge rose 0.1 per cent last month, after a 0.2 per cent rise in September and a 0.1 per cent increase in August. The inflation gauge increased by 2.1 per cent in the 12 months to October, figures released yesterday show. Price rises for new homes, non-alcoholic drinks, meat and seafood were offset by falls in the price of fruit, vegetables and petrol. The consumer price index rose 1.2 per cent in the September quarter – stronger than the 0.8 per cent rise economists were forecasting. Economists said the higher-than-expected figure ended any hope of another cash rate cut next year. But the inflation gauge shows inflation remains benign, TD Securities head of Asia-Pacific research Annette Beacher said. “Compared with the surprise jump in headline inflation in the September quarter, this October report is rather benign, and starts the final quarter of the year with a whisper,” Ms Beacher said. Nine to float in to $22.15 billion, beating economists’ expectations of a 0.4 per cent rise, the Australian Bureau of Statistics said yesterday. National Australia Bank senior economist David de Garis sais he was hopeful consumers would continue to open their wallets rather than save. “It’s tentative at this stage, but there’s some hope that consumer spending was more resilient in the second half of the September quarter on the back of higher consumer confidence overall, rising house prices and somewhat lower anxiety over unemployment expectations,” he said. “They’ve been indicating over recent quarters much less urgency to pay down the debt and mortgage as the wisest place to save. Perhaps the memories of the global financial crisis are fading somewhat.” JP Morgan economist Ben Jarman said there had been a distinct improvement in consumer confidence. “Department store sales have been the clear outperformer for the last couple of months, but that was after they essentially tanked in July, so we think it’s coming back after distortion at mid-year,” he said. But he said he was doubtful retail spending would continue to rise. “Income growth has been so weak, the hiring side of things has been so poor for so long, so we’re a little bit sceptical about whether this can be sustained,” he said. Dollar rises after encouraging data – AAP Westpac aims to beat record $7.1b SYDNEY: Westpac will increase its focus on growth in 2014 as the bank looks to build on another record profit. Westpac made a cash profit of $7.1 billion for the 12 months to September 30, an increase of 8 per cent on last year’s result. The bank achieved the result through a modest 3 per cent rise in net interest income, stronger demand for home lending and a 30 per cent fall in bad debt charges. Chief executive Gail Kelly said it had been a good year, with all of its divisions recording solid earnings growth during the year. “I am thrilled with the result and I’m particularly looking forward to driving this momentum through to another good result next year,” she said. She said Westpac would focus more on growing its business in 2014. “We have been very clear in calling out that our priorities over the last 18 years have been strength and return,” she said. “But we are tilting this priority focus to picking up a little more growth as we go into the 2014 year.” Mrs Kelly said the pursuit – AAP of growth would not come at the expense of Westpac’s lending standards, which have helped it accumulate higher capital reserves than its big four bank rivals. “We are very conscious of December BRISBANE: The company which owns the Nine Network will start trading on the Australian Securities Exchange on December 6 – less than a year after a major debt financing deal was approved. Under the float, Nine Entertainment Co Holdings, which owns the Nine Network and Ticketek, will have a market capitalisation of between $1.93 billion and $2.17 billion. The company yesterday lodged a prospectus for an initial public offering. – AAP the risk standards we have and we are certainly not going to compromise that,” she said. – AAP SYDNEY: Surprisingly good local economic figures have helped the Australian dollar recover its weekend losses. At the close yesterday, the local unit was trading at US94.88c, up from 94.8c on Friday. On Saturday morning, it fell as low as US94.22c, its weakest level since October 9 after better than expected US manufacturing figures aroused speculation the Federal Reserve could taper its economic stimulus this year. Billabong sells Canadian business SYDNEY: Surf wear retailer Billabong has sold its Canadian business West 49 for $11.1 million. West 49 has 92 stores, and was bought by YM, another retailer in North America. The sale continues Billabong’s efforts to simplify its business and focus on its core brands. Its shares closed steady at 40c yesterday. Whitehaven future looks assured MELBOURNE: Whitehaven Coal’s chairman has told shareholders the company’s future is assured after a difficult year in which it posted a $82 million loss and its share price more than halved. Chairman Mark Vaile said although global coal markets had been tight and prices flat, there had been a modest improvement in thermal and metallurgical coal prices in recent months. Armour achieves shale gas first She wants more: Westpac’s chief executive Gail Kelly delivers full-year results yesterday. Picture: AAP Big four rake in $27b in year SYDNEY: The big four banks made more than $27 billion in profits in the past year, making Australia’s banking sector one of the world’s most successful. The profit growth came despite low demand for loans from businesses, and strong competition for deposits from cautious consumers, analysts said. The main factors driving profit growth were lower costs from unpaid debts and stronger performances from wealth management and institutional banking activities. Commonwealth Bank, Westpac, ANZ and National Australia Bank all made record annual cash profits in 2012-13, taking their combined profits to $27.4 billion, up 9.5 per cent from the previous year. Efficiency also improved, but costs rose slightly due to investments in new technology and staff expenses, PwC Australia banking analyst Stuart Scoular said. Housing prices continue to surge SYDNEY: House prices are continuing to surge, especially in Sydney, as buyers take advantage of record low interest rates. In the year to September, the house price index rose 7.6 per cent, the Australian Bureau of Statistics said yesterday, the biggest increase in three years. Of the eight capital cities, Sydney had the largest 8 - The Border Watch, Tuesday, November 5, 2013 increase with a rise of 11.4 per cent, followed by an 8.6 per cent increase in Perth. JP Morgan economist Tom Kennedy said the data showed the housing market, particularly in Sydney, was on the rise. “In the nation’s largest property market, things really are starting to heat up,” he said. “In Melbourne as well, price appreciation was very strong and also in Brisbane.” Mr Kennedy said recent interest rate cuts by the Reserve Bank of Australia were making an impact on the housing sector. “A big part of the Reserve Bank story is they’ve been trying to revive the construction sector, so I think the big uptick we’ve seen in prices definitely is supportive of that, as higher prices encourage activity and investment,” he said. HSBC chief economist Paul Bloxham said the continued rise in house prices may mean the housing sector is picking up where the mining and resources boom left off. – AAP – AAP Job ads stabilise after slide SYDNEY: A modest improvement in hiring intentions has seen job ad numbers stabilise after falling for the past three years. “While conditions in the labour market remain quite soft, there are now signs emerging that much of the deterioration in the unemployment rate has already happened,” ANZ chief economist Ivan Colhoun said. MELBOURNE: Armour Energy has become the first Australian company to flow gas from shale using the fracking technique that has revolutionised US energy markets. Armour announced it had received continuous gas flows from the well in the Lawn shale formation in north-west Queensland. Armour said it was the first successful gas flows in Australia from a horizontal fracked well.
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