The Border Watch : June 3rd 2014
Business WRT to get chance to reconsider merger MELBOURNE: Westfield Retail Trust investors will have the chance to change their mind on a proposed controversial merger with the Australasian business of Westfield Group. The planned merger hit a wall last week when an investor vote was postponed at the last minute amid heated debate about its merits. WRT will notify securityholders of a new date to vote shortly. The meeting of WRT securityholders was adjourned suddenly last Thursday before the final outcome of a vote on the restructure was known. The number of proxy votes lodged by WRT securityholders in favour of the proposed merger fell just short of what was needed to push the restructure over the line. A significant number of WRT securityholders believe the proposed restructure favours Westfield Group to the detriment of WRT. “Valid proxy forms previously lodged by securityholders will remain valid, however all securityholders (whether or not they have already lodged a proxy form) may lodge new proxy forms for the resumed meetings,” WRT said yesterday. WRT will issue a second supplementary securityholder booklet and new proxy forms shortly, including the date, time and venue for the resumed meeting. WRT’s board adjourned last Thursday’s meeting so securityholders could consider new information announced by Westfield Group chairman Frank Lowy. Shortly before WRT investors were due to vote, Mr Lowy said Westfield Group would still seek to split its Australasian arm from its international business. Under the $70 billion restructure plan, Westfield’s Australian and New Zealand businesses would merge with WRT to create a new entity, to be called Scentre. AAP Housing sector starts to weaken SYDNEY: The housing construction sector has hit a soft patch, but a bounce back could be on the cards for later this year. Building approvals fell for the third consecutive month in April, weighed down by another big drop in the volatile apartments category. Approvals for the construction of new homes fell 5.6 per cent during the month but were up 1.1 per cent for the year, figures from the Australian Bureau of Statistics data showed. JP Morgan economist Tom Kennedy said the outcome was well short of market expectations. “It’s clear the level of building approvals has moved quite sharply lower in the past few months,” he said. “Coupled with weak house price data, it would The RP Data Rismark Home Value Index found house prices dipped 1.9 per cent in May, the biggest drop in five years. RP Data research director Tim Lawless said the fall “It’s clear the level of building approvals has moved quite sharply lower in the past few months.” suggest that things are coming off the boil a little bit.” The ABS data coincided with the release of a separate survey showing capital city home prices fell for the first time in a year. in house prices could be seasonal, but it could also indicate the housing sector is cooling. “Historically, housing market conditions have softened in April and May as the market rebalances from what is typically a seasonally strong first quarter and also as a result of cooler climatic conditions during the autumn and winter months,” he said. “Outside of the seasonality, we have been seeing signs that the housing market is at or approaching the peak of the growth cycle.” St George economist Janu Chan said the amount of new homes being approved remained high, with improvements expected later in the year. “We continue to expect healthy gains in dwelling prices later in the year,” she said. AAP Farmer confidence hits three-year high MELBOURNE: Good autumn rains have helped Australian farmers feel their most confident in three years. Rain in key cropping regions and southern grazing areas, along with an improved outlook for the beef, sheep and grains markets, has buoyed farmers, the latest quarterly Rabobank rural confidence survey shows. Dairy farmers were the most upbeat about their prospects for the coming year, according to the survey, which was carried out last month. Farmers were feeling positive about the longer term, too, with nearly twothirds looking to pass on their business to the next generation through transfer of the farm to family or shared ownership. About 40 per cent of farmers expect conditions in the agricultural sector to improve, up from 29 per cent in the previous survey. Just under half expect similar conditions to last year. Good autumn rains boosted production prospects across Western Australia, South Australia, Victoria and central and southern NSW, Rabobank in Brief Budget has hit sales, says shoe seller SYDNEY: A major shoe retailer says its sales have taken a hit, as the federal budget has caused consumers to spend less. RCG Corporation, which runs The Athlete’s Foot chain of stores, has downgraded its earnings forecast in response, sending its share price plunging. The company said sales in The Athlete’s Foot have grown by 2.75 per cent so far this financial year and the weaker performance has been its wholesale operations during April and May. Funtastic halves earnings forecast SYDNEY: Toy distributor Funtastic has halved its earnings forecast and announced the departure of its chief executive. Funtastic blamed its earnings downgrade on weaker-thanexpected sales. It cut its full-year earnings forecast to between $10-$12 million, down from its previous guidance of $19-$23 million. Inflation rises by 0.3 per cent in May SYDNEY: Rising inflation and a pick-up in nonmining activity shows a rate hike could be on the cards in early 2015. The TD Securities-Melbourne Institute monthly inflation gauge rose by 0.3 per cent in May and by 2.9 per cent in the year to May. The result was driven by price rises for fruit and vegetables, furniture and tobacco, which were offset by falls in holiday travel, health, footwear and petrol. On the move: Dairy farmers are feeling upbeat about the coming year, according to the latest Rabobank rural confidence survey. group executive for Country Banking Australia Peter Knoblanche said. “The rains couldn’t have come at a better time, with much of the winter crop planted on an excellent sub-soil moisture profile,” he said. “Graziers in many parts of Australia also have had more reason to smile, with the markets responding in March and April to the improved climatic conditions.” However, three-quarters of Queensland remains hit by drought and there had been little relief from dry conditions in north-west and western NSW. Picture: AAP The survey also found Australian farmers had stronger income expectations and investment intentions. Up to 85 per cent of farmers expected their farm business performance to either improve or remain the same as last year. AAP Origin pays $866m for Browse gas stake MELBOURNE: Origin Energy says it had to act after agreeing to fork out up to $865.57 million for a stake in a new gas project off the Western Australian coast. The company, Australia’s largest electricity retailer and generator, has taken on a potential second major liquefied natural gas project a year before its flagship $24.7 billion Queensland project comes online. Origin has struck a deal to buy junior Karoon Gas’ 40 per cent interest in the Poseidon discovery in WA’s Browse Basin. Origin managing director Grant King said investors were already asking what the company planned to do with the extra $1 billion in cash flow its Australia Pacific LNG project would start delivering. “The answer is: we are setting ourselves up through this investment and have a very good opportunity to reinvest part of those cash flows for continued development,” he said. “We are balancing the risks of acting now versus the risks of not acting at all.” Origin saw the gasfields as potentially producing a 45-year LNG 10 - The Border Watch, Tuesday, June 3, 2014 project. Traders were unimpressed, sending the stock down 58c, or 3.8 per cent, to $14.51 yesterday afternoon, while Karoon’s stock soared by $1.04, or 42 per cent, to $3.50. Mr King argued Origin was decreasing risk by spending money to buy into a project with a largely proven resource – including attractive gas liquids – rather than exploring for gas itself. Karoon Gas’s permits in the area were issued in 2001, he said. He said the money spent on Poseidon would not affect the upward dividend path investors were expecting due to APLNG coming online to add to its retail electricity earnings, he said. Origin’s partner in APLNG, US energy giant ConocoPhillips is the project operator of the Poseidon gas fields, and PetroChina also holds a major stake. Origin plans to conduct a $1 billion equity offer after August to help pay for the deal. Mr King talked up the prospect of a “floating” LNG facility which could be built elsewhere to avoid Australian construction costs. AAP Asaleo gears up for market debut SYDNEY: Personal hygiene products maker Asaleo is hoping to raise up to $690 million ahead of its stock market debut in July. The maker of Sorbent toilet paper and Libra feminine hygiene products is pricing its offer at up to $1.80 a share, which could see the new entrant valued about $1 billion. Australian growth driven by exports SYDNEY: The Australian economy is set to get a serious boost from mining exports this year, but there are signs that other parts of the economy are picking up too. GDP is expected to have grown 0.8 per cent in the March quarter and 3.1 per cent on an annual basis when the Australian Bureau of Statistics releases the national accounts tomorrow, according to an AAP survey of 15 economists.
May 30th 2014
June 4th 2014