PRESS DIGEST-Australian Business News - May 16

Reuters: [2008-05-15 22:56:00]

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Seven Network <SEV.AX> chairman Kerry Stokes has spent more than A$40 million this week raising from 53.7 percent to 65.3 percent his stake in equipment hire company National Hire <NHR.AX>. Analysts welcomed the move, agreeing that the environment for non-residential construction spending was buoyant following announcements in this week's federal budget that at least A$20 billion will be spent nationally on roads, railways, ports and other infrastructure projects. The mining boom is also fuelling demand for equipment hire. Page 56.

Melbourne-based Indophil Resources <IRN.AX> has rejected a A$426 million takeover bid from Xstrata <XTA.L>, arguing that it is "low ball and unrealistic". Swiss miner Xstrata denied this, saying the offer, which it wants to use as a means of increasing its interest in the Tampakan copper and gold project in the southern Philippines joint owned with Indopohil, represents fair value. Xstrata said the mine still had significant development, financing, and political risk associated with it, hence the "fair price". Page 57.

Construction group Leighton Holdings <LEI.AX> yesterday reaffirmed forecasts for full-year earnings growth of more than 30 percent, after announcing net profit of A$375 million for the nine months to March 31. Chief executive Wal King also predicted that revenue would grow by more than 10 percent a year over the next three years, as Leighton struggles to keep pace with a surplus of work in the Middle East and prepares for a surge in government infrastructure spending in Australia. Leighton shares surged to a three-month high on the bullish outlook. Page 58.

Adelaide Brighton <ABC.AX> has forecast full-year profit growth of nearly 10 percent as infrastructure and engineering projects fuel demand for construction materials. Chief executive Mark Chellew predicted cement demand would grow by 5 percent this year, up from previous forecasts of 3 percent. He told shareholders that demand in Queensland, Victoria and South Australia was offsetting continuing weakness in the New South Wales building market. Net profit for 2007-08 is expected to be between A$118 million and A$125 million. Page 58.

THE AUSTRALIAN (www.theaustralian.news.com.au)

Commonwealth Bank of Australia <CBA.AX> has declined to reaffirm an earlier statement that earnings growth will match or exceed the average of its peers over the medium to short term. Deutsche Bank analyst Ross Brown said this implied CBA "no longer believes it can outperform its peer group," but a CBA spokesman said the bank would not be giving guidance after the backlash suffered by St George Bank <SGB.AX> when it downgraded its projection of 10 percent earnings-per-share growth to 8-10 percent growth. Page 21.

Coca-Cola Amatil <CCL.AX> has forecast "high single-digit" growth in net profit this financial year, with most of the boost being provided by its premium beer business. The drinks bottler's shares rose 6 percent, or 45 cents, yesterday to A$8.40 on the news, their biggest gain in almost four months. Chief executive Terry Davis made the forecast at the company's annual general meeting, at a time of softening consumer sentiment and an unexpected 70 percent rise in taxes on pre-mixed alcoholic drinks. Page 21.

Speculation that AMP <AMP.AX> is considering a bid for St George Bank, Australia's fifth-largest bank, mounted yesterday when AMP chief executive Craig Dunn refused to rule 'anything in or out'. AMPs banking arm is relatively small, possessing about 1 percent of the national mortgage market. Westpac Banking Corporation <WBC.AX> proposed an A$19 billion friendly takeover of St George earlier this week. Page 21.

The China Iron & Steel Association yesterday asked domestic steel mills and iron ore traders "not to support or participate in Rio Tinto's <RIO.AX><RIO.L> spot iron ore sales activities in China." Diversified miner Rio had exercised flexibility clauses in its contracts to divert contracted iron ore sales to premium-priced spot markets, at nearly double the old contract price. Rio dismissed the threats as a negotiation tactic, with both Rio and rival BHP Billiton <BHP.AX><BLT.L> pushing for annual iron ore price rise of around 85 percent. Page 21.

THE SYDNEY MORNING HERALD (www.smh.com.au)

Fortescue Metals Group <FMG.AX> has vowed to remain Australian-owned amid speculation the recipient of its first shipment is planning to acquire a major stake in the emerging iron ore company. A Chinese magazine reported this week that steel maker Baosteel <600019.SS> was in a "slow waltz" to take a stake in Fortescue, with United States hedge fund Harbinger Capital Partners apparently willing to sell some or all of its 16 percent stake in return for enormous profits on its initial investment. Fortescue chief executive Andrew Forrest has welcomed Chinese interest. Page 21.

Mirvac Group has written off its indirect investment in Sydneys troubled Lane Cove Tunnel, with 2007-08 profit expected to be down A$57.5 million as a result. Shares in the property developer fell 13 cents to A$3.70 on the news, bringing their total fall since December to more than 40 percent. The announcement came after broker Merrill Lynch gave Mirvac shares a "sell" recommendation, citing concerns over the slowdown in the housing sector and the collapse of New South Wales third-largest home builder, Beechwood Homes. Page 22.

The Australian Competition and Consumer Commission (ACCC) has won a court order forcing Korean Air <003490.KS> to hand over sensitive documents related to the competition regulator's investigation into price fixing. The Federal Court yesterday rejected Korean Air's claims it was within its rights to withhold the information given the ACCC had already started proceedings. The court is seeking documents related to the tonnages, total revenues, and total revenues attributed to fuel surcharges that KAL derived from air cargo to and from Australia. Page 23.

THE AGE (www.theage.com.au)

Commonwealth Bank of Australia says it is assessing the positives and negatives of making a counter-bid for St George Bank, following Westpac Banking Corp's A$19 billion bid earlier this week. National Australia Bank is also looking at St George, while diversified financial group AMP has not ruled out a bid of its own. "These sorts of acquisitions are always successful based on the quality of the executiona number in the past have not been particularly successful and some have," said CBA chief executive Ralph Norris. Page B1.

Diversified financial group AMP says it expects a lower full-year profit this year, but that conditions in equity markets will improve late in 2008 and continue improving throughout 2009. Chief executive Craig Dunn said he agreed with Australian bank chiefs that the worst of the global credit crunch ended when the United States Federal Reserve bailed out investment bank Bear Stearns, and that no more big corporate losses were expected. Mr Dunn also did not rule out a bid for St George Bank. Page B1.

Takeover target Just Group <JST.AX> has criticised Solomon Lew's Premier Investments <PMV.AX>, arguing it lacks focus, detail and management certainty because it does not have a chief executive. Just, which owns clothing retailers including Just Jeans, Peter Alexander, Portmans and Dotti, has also attacked Premier's corporate governance, claiming it fails to comply with stock exchange Corporate Governance Council recommendations. Just also said shareholders risked being dominated by interests associated with Mr Lew. Page B2.

Toyota Motor Corp <7203.T> said global sales of its Prius petrol-electric hybrid car had hit 1 million. It said 1.028 million Prius had been sold since it went on sale in Japan in 1997, with other Toyota hybrids taking cumulative hybrid sales to 1.46 million. Toyota said the Earths atmosphere had been spared 4.5 million tonnes of global warming gases since the models release. The Prius is sold in 40 countries and regions, and is increasing in popularity because of surging petrol prices and concerns about the environment. Page B3.

-- ((Sydney Newsroom +61-2 9373 1800; sydney.newsroom@reuters.com)) Keywords: DIGEST AUSTRALIA BUSINESS

. . .

STOCKS NEWS US-Some overbought S&P 500 stocks -- Birinyi

Reuters: [2008-05-15 21:15:00]

    Stocks on the move [HOT-RTRS] Real-time Equity news [U E] 
    U.S. stock market report [.N] 
    
1509 ET 15May2008 - Some overbought S&P 500 stocks -- Birinyi 
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    Some S&P 500 <.SPX> stocks seen as overbought by market research firm 
Birinyi Associates: 
    
    Electronic Data <EDS.N> 
    Cummins Inc <CMI.N> 
    Fluor Corp <FLR.N> 
    Sprint Nextel <S.N> 
    Moody's <MCO.N> 
    Loews Corp <LTR.N> 
    LSI Corp <LSI.N> 
    Sandisk <SNDK.O> 
    Alcoa Inc <AA.N> 
    Supervalu Inc <SVU.N> 
    Symantec <SYMC.O> 
    VeriSign <VRSN.O> 
    Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net 
    
1458 ET 15May2008-ADR Report-ADRs rise on Japan, Korea earnings 
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    U.S.-listed shares of overseas companies rose on Thursday, led by gains in 
Japanese and South Korean firms after a handful of surprisingly strong 
quarterly results lifted optimism about the region. 
    For more please double click [ID:nN12DRS] 
    Reuters Messaging rm://jennifer.coogan.reuters.com@reuters.net 
    
1439 ET 15May2008-Some S&P 500 stocks oversold - Birinyi 
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    Some S&P 500 <.GSPX> stocks seen as oversold by market research firm 
Birinyi Associates: 
    
    Ambac Financial <ABK.N> 
    Barr Pharma <BRL.N> 
    MBIA Inc <MBI.N> 
    Whole Foods <WFMI.O> 
    Sun Microsystems <JAVA.O> 
    Colgate-Palmolive <CL.N> 
    American International Group <AIG.N> 
    Zimmer Holdings <ZMH.N> 
    Washington Mutual <WM.N> 
    Sunoco <SUN.N> 
    Starbucks Corp <BSUX.O> 
    Coca-Cola <KO.N> 
    Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net 
 
1348 ET 15May2008 RTRS-US STOCKS-Oil drop sends shares higher 
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    U.S. stocks rose on Thursday as the price of oil fell, overshadowing a 
barrage of weak economic news. 
    For more please double click [ID:nN15309314] 
    Reuters Messaging rm://caroline.valetkevitch.reuters.com@reuters.net 
    
1115 ET 15May2008 -S&P 500 poised for worst decade since Depression 
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    The S&P 500 <.SPX> will have its worst decade since the Great Depression if 
it closes below 1,469 at the end of 2009, Standard & Poor's chief economist 
David Wyss said in a report on Americans' retirement prospects.    "Retiring 
in a period such as this strains assets in the best case, and this is far from 
the best case," Wyss wrote. "Asset values have beendeclining, while saving 
rates have hovered near zero percent, and if older workers aren't adding to 
their wealth and if their asset values are falling, the prospects of a 
comfortable retirement are receding."    The average household had wealth 
equal to 558 percent of after-tax income at year-end 2007, down from 569 
percent a year earlier and down from 618 percent at the market peak in 1999, 
the report said. 
    Reuters Messaging: rm://jennifer.coogan.reuters.com@reuters.net 
 
1037 ET 15Aug2008-Main Street seen trumping Wall St on inflation front 
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    Judging by Wall Street's spirited reaction to April's tamer Consumer Price 
Index on Wednesday, investors are clearly focusing on core CPI -- excluding 
food and energy -- and the Fed's hopes for "moderating" inflation, but Main 
Street is fixed on the realities of headline inflation and its effects on how 
people live, Asbury Research, based in Chicago, says in a research note. 
    Asbury said, according to its charts, headline CPI's April year-over-year 
reading of a gain of 3.9 percent, although down slightly from earlier this 
year, is still hovering around a 20-year high of up 4.00 percent. 
    "This is not good news for the economy, especially when the Fed has stated 
a number of times during the past year that elevated headline inflation will 
eventually find its way into the core rate." 
    Reuters Messaging: rm://ellis.mnyandu.reuters.com@reuters.net 
    
0959 ET 15May2008-Consumer tapped out, sort of fatigued-Ross 
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    Billionaire investor Wilbur Ross said on Thursday the U.S. consumer is 
being squeezed by sliding home values and soaring food and energy costs, 
increasing concerns about the U.S. economy's outlook.    "We are at best in a 
period of stagflation and at worst, some combination of inflation and a quite 
poor economy, largely because of the consumer," Ross told CNBC television in an 
interview. "I think the consumer is tapped out and sort of fatigued." 
    Reuters Messaging: rm://ellis.mnyandu.reuters.com@reuters.net 
Keywords: MARKETS STOCKSNEWS

CORRECTED - SAfrica stocks race to record high,rand firmer to dlr

Reuters: [2008-05-15 18:51:00]

(Corrects bond yields in para 14)

JOHANNESBURG, May 15 (Reuters) - South Africa's stock indices surged to record highs on Thursday supported by higher metals prices and the rand was also on a firmer footing against the dollar.

The JSE's Top-40 Index <.JTOPI> was up 0.86 percent to an all-time 30,665.72 points high and the broader All-share Index <.JALSH> went up 0.8 percent to a record 32,647.43 points.

"It's the resources that helped us all the way up," Garth Mackenzie, a trader at BoE Private Clients said.

Mining giant Anglo American <AGLJ.J> climbed 1.29 percent to 513 rand, while rival BHP Billiton <BILJ.J> was 0.16 percent higher at 315 rand.

Goldfields <GFIJ.J> led the gold miners up, gaining 0.76 percent to 105 rand as gold jumped more than 2 percent, helped by speculative buying on the metal's appeal as an alternative investment and an inflation hedge.

Spot platinum also made gains, driving platinum miners higher. Anglo Platinum <AMSJ.J> rose 2.44 percent to 1,343 rand.

The world's biggest brewer, SABMiller <SABJ.J> performed best among the blue chips, growing 3.63 percent at 185.50 rand. The company beat forecasts with a 19 percent rise in annual earnings on Thursday.

Industrials' shares were also higher, led by construction and engineering group Murray and Roberts Holdings Ltd <MURJ.J>, which climbed 2.39 percent to 90 rand.

But telecom companies were lower, with fixed-line operator Telkom <TKGJ.J> biggest loser on the bourse, dropping 2.33 percent to 128 rand. MTN <MTNJ.J> fell 1.02 percent to 153.40 rand.

The rand <ZAR=D3> was trading at 7.60 to the dollar at 1555 GMT, about 0.7 percent firmer than its last close of 7.6575 in New York. It firmed to 7.5775 to the dollar earlier but gains were capped by strong importer demand.

"Below 7.60 there's quite decent demand from importers and offshore funds are quite happy to purchase it if goes anything cheaper than 7.65/dollar," said Bidvest chief trader, Ion de Vleeschauwer, adding the unit seemed stuck in 7.55-7.65 range.

He said a stronger price for gold, of which South Africa is a major producer, helped support the rand.

After weakening sharply on Wednesday, South African government bonds were slightly weaker.

Yields on the 2010 bond <ZAR153=> ticked up one basis point to 10.54 percent and those on the 2015 issue <ZAR157=> were up by the same margin to 9.535 percent.

Analysts said bonds will likely continue to be on the defensive with the increased chance of another rate hike in June. (Reporting by Phumza Macanda and Serena Chaudhry; Editing by Gerrard Raven) ((phumza.macanda@thomsonreuters.com; +27 11 775 3152; Reuters Messaging: phumza.macanda.reuters.com@reuters.net))

Keywords: MARKETS SAFRICA/CLOSE

SAfrica stocks race to record high,rand firmer to dlr

Reuters: [2008-05-15 18:02:00]