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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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 execution a number in the past have not been particularly successful and some have," said CBA chief executive Ralph Norris. Page B1.
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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.
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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.
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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
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US copper holds gains by close, further upside seen
Reuters: [2008-05-15 20:32:00]
NEW YORK, May 15 (Reuters) - U.S. copper futures ended higher on Thursday, largely unaffected by the volatile swing down in the crude oil futures market which suggested further upside for the red metal in the coming sessions, analysts said.
NOTE: For detailed report, click on [MET/L].
* Copper for July delivery <HGN8> settled 5.75 cents firmer at $3.7385 a lb on the COMEX metals division of the New York Mercantile Exchange. Range spanned from $3.6665 to $3.7725.
* By 12 p.m. EDT (1600 GMT), COMEX estimated copper volumes reached 14,814 lots. Final volumes on Wednesday totaled 13,481 lots.
* Open interest in the copper market fell by 543 lots to 97,256 contracts open as of May 14.
* Copper rise supported by early weakness in the dollar and sharp rally in crude oil - trader.
* Money flow heading back into commodities. Spike higher in crude a large part behind the stronger tone in metals complex - Wisdom Financial senior trader Zachary Oxman.
* Copper prices hold up "remarkably well" compared with $9 drop in gold from session highs and breakdown in crude. A pretty good testament to the strength in the copper market - FuturesOne vice president Sterling Smith.
* Copper prices appear fairly stable. Prices may see further upside if market holds range - Smith.
* In currencies, the dollar regained upside momentum against the euro after U.S. stocks rose amid optimism about potential deals and on oil's decline late in the day.
* In afternoon trading in New York, the euro was down 0.3 percent at $1.5429 <EUR=> after trading as high as $1.5547.
* A weaker American currency makes dollar-denominated commodities like copper less expensive for investors holding other currencies.
* A bigger-than-expected drop in April U.S. industrial production seen as a nonevent - trader.
* Nationwide industrial production tumbled by 0.7 percent in April due to a contraction in the manufacturing sector that was the most severe in nearly three years - Federal Reserve.
* "The decline in April industrial production and reduction in manufacturing production is conclusive evidence that the industrial side of the U.S. economy is in a recession," said Daniel J. Meckstroth, Chief Economist for industry research group Manufacturers Alliance/MAPI.
* A distinct lack of buying out of China keeping copper's price potential in check - MF Global analyst Edward Meir.
* China's imports of unwrought copper fell 3.1 percent in April from March and dropped 17 percent in the first four months of the year, as demand growth stagnated and domestic output surged.
* Demand could pick up in the coming months as the country rebuilds cities, factories and power networks devastated by a powerful earthquake in Sichuan on Monday that killed nearly 15,000 people. [ID:nPEK282260]
* In industry news, Chilean copper exports during the month of April fell to $3.719 billion from $4.106 billion in March.
* Potential production problems in Peru and Chile continue to be a supportive influence for prices.
* The leader of subcontract workers at Chile state copper miner Codelco ended a hunger strike on Thursday after Chilean President Michelle Bachelet endorsed new labor agreements between workers and the company. [ID:nN15388915]
* London Metal Exchange copper warehouse stocks fell by 575 tonnes Thursday at 120,850 tonnes. COMEX warehouse copper stocks were flat at 10,827 short tons on Wednesday.
* LME copper for delivery in three months <MCU3> ended up $176 at $8,296 a tonne from Wednesday's close.
(Reporting by Chris Kelly; Editing by John Picinich) ((chris.kelly@thomsonreuters.com; +1 646 897 1898; Reuters Messaging: chris.kelly.reuters.com@reuters.net))
For the latest news and prices, click on the codes in brackets:
LME overview <RING>
LME Warehouse stocks <LME/STX1>
Spot gold/silver <XAU=><XAG=>
COMEX copper futures <0#HG:>
COMEX metals warehouse stocks <CMWST>-<CMWSV>
N.Y. metals hourly volumes <IZQI>
Vols/open interest <MTXM>
RELATED NEWS AND OTHER TOPICS Precious metals news [GOL] All metals news [MTL] All commodities news [C] Metals diary [MTL/DIARY] Ldn Bullion Mkt Assoc <LBMA01> Foreign exchange rates <FX=S> Keywords: MARKETS COPPER/COMEX
Steelworkers' union backs Obama for White House
Reuters: [2008-05-15 17:10:00]
WASHINGTON, May 15 (Reuters) - The United Steelworkers Union, a politically powerful U.S. labor group with 600,000 members, endorsed Barack Obama for president on Thursday as the Democratic Party began to rally around the Illinois senator.
The union endorsement came a day after former presidential candidate John Edwards announced his support for Obama. The steelworkers had endorsed Edwards last year.
Obama and his Democratic rival Hillary Clinton, a New York senator, competed hard for support from the steelworkers union after Edwards dropped out of the race in January.
"We find ourselves once again in agreement with Sen. Edwards, this time with his decision last evening to endorse Sen. Barack Obama," the union said in a statement, promising to work hard for Obama.
Obama has built a big lead over Clinton in the Democratic race for the right to face Republican John McCain in November's presidential election.
Clinton has resisted calls to get out of the race and promised to compete to the June 3 end of voting in the state-by-state nomination battles. (Writing by John Whitesides, editing by David Alexander and John O'Callaghan) (To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http:/blogs.reuters.com/trail08/) ((For a TAKE A LOOK on the campaign [US/VOTE])) Keywords: USA POLITICS/UNION
US copper futures up at open on oil surge, weak dlr
Reuters: [2008-05-15 16:12:00]
NEW YORK, May 15 (Reuters) - U.S. copper futures rose more than 2 percent early Thursday as a weak dollar and a jump in the price of crude oil led the charge higher across the the broader metals complex, traders said.
NOTE: For detailed report, click on [MET/L].
* Copper for July delivery <HGN8> was trading up 7.20 cents, or nearly 2 percent, at $3.7530 a lb by 10:06 a.m. EDT (1406 GMT) on the COMEX metals division of the New York Mercantile Exchange. Morning range spanned from $3.6665 to $3.7720.
* COMEX copper volumes were estimated at 5,169 lots by 9:00 a.m.
* The euro gained ground against the dollar after Germany reported its strongest quarterly growth in 12 years.
* German gross domestic product expanded by 1.5 percent quarter-on-quarter in January-March. [ID:nL15339192]
* The euro rose as high as $1.5547 <EUR=> after the German data but pared gains to trade up 0.2 percent at $1.5504 in midmorning trade in New York.
* Dollar also undermined by data showing weekly U.S. jobless claims rise by 6,000 and net capital outflows of $48.2 billion in March.
* A weaker American currency makes dollar-denominated commodities like copper less expensive for investors holding other currencies.
* U.S. crude oil futures rallied back above $126 a barrel, sparked by news a strike at a port in France had blocked tanker traffic and that OPEC exported less crude in the four weeks to April 27.
* A bigger-than-expected 0.7 percent drop in April U.S. industrial production seen as a nonevent - trader.
* A distinct lack of buying out of China keeping copper's price potential in check - MF Global analyst Edward Meir.
* China's imports of unwrought copper fell 3.1 percent in April from March and dropped 17 percent in the first four months of the year, as demand growth stagnated and domestic output surged.
* Demand could pick up in the coming months as the country rebuilds cities, factories and power networks devastated by a powerful earthquake in Sichuan on Monday that killed nearly 15,000 people. [ID:nPEK282260]
* In industry news, Chilean copper exports during the month of April fell to $3.719 billion from $4.106 billion in March.
* Looking at supply, potential production problems in Peru and Chile continue to be a supportive influence for prices.
* Subcontract workers at Chile's Codelco said the company must officially recognize their demands at the negotiating table if it is to avoid further protests. [ID:nN13405549]
* Chilean President Michelle Bachelet has given her word that Codelco, the state copper miner, will adhere to accords that ended a three-week strike that shut three of the company's five divisions for parts of last month. [ID:nN14503601]
* London Metal Exchange copper warehouse stocks fell by 575 tonnes Thursday at 120,850 tonnes. COMEX warehouse copper stocks were flat at 10,827 short tons on Wednesday.
* LME copper for delivery in three months <MCU3> last traded at $8,289.50 a tonne, up $169.50 from Wednesday's close.
(Reporting by Chris Kelly; Editing by John Picinich) ((chris.kelly@thomsonreuters.com; +1 646 897 1898; Reuters Messaging: chris.kelly.reuters.com@reuters.net))
For the latest news and prices, click on the codes in brackets:
LME overview <RING>
LME Warehouse stocks <LME/STX1>
Spot gold/silver <XAU=><XAG=>
COMEX copper futures <0#HG:>
COMEX metals warehouse stocks <CMWST>-<CMWSV>
N.Y. metals hourly volumes <IZQI>
Vols/open interest <MTXM>
RELATED NEWS AND OTHER TOPICS Precious metals news [GOL] All metals news [MTL] All commodities news [C] Metals diary [MTL/DIARY] Ldn Bullion Mkt Assoc <LBMA01> Foreign exchange rates <FX=S> Keywords: MARKETS COPPER/COMEX
Egypt index tumbles, Orascom leads falls
Reuters: [2008-05-15 15:42:00]
CAIRO, May 15 (Reuters) - Egypt's main stock index posted its sharpest single-day drop in almost 23 months on Thursday as investors dumped shares of Orascom Telecom <ORTE.CA><ORTEq.L> after it said a share buyback offer was oversubscribed.
Shares of Orascom tumbled 6.43 percent to 74.50 Egyptian pounds ($13.90) and the index <.CASE30> shed 4.66 percent to 10,169.27 points.
Orascom said shareholders offered to sell more than three times the amount of shares it said it would buy back in a tender offer.
"People had extra shares they wanted to sell," said Karim Hosny, account officer at Pharos Securities in Cairo. "With these market conditions of course they were selling."
Shares of Orascom Construction Industries <OCIC.CA><OCICq.L> extended losses to a ninth consecutive session, dropping 1.54 percent to 361.05 pounds.
Orascom Construction's earnings will hit by a tax announced earlier this month on free zones, where Orascom has fertiliser operations, said Tarek Shahin, analyst at Beltone Financial.
Shares of monopoly fixed-line operator Telecom Egypt <ETEL.CA><ETELq.L> plunged 7.26 percent to 17.51 pounds after it reported its second straight decline in quarterly profit.
Telecom Egypt said its net profit fell 4.8 percent to 557 million Egyptian pounds, falling short of expectations.
"Results were way below expectations," said Teymour el-Derini, trader at Beltone Financial.
Egypt's Hermes index <.HRMS> dropped 4.30 percent to 88,102.07 points and the broader CIBC index <.CIBC> shed 4.17 percent to 503.21 points. ($1 = 5.36 Egyptian pounds) (Writing by Will Rasmussen) ((william.rasmussen@reuters.com; +20 2 2578 3290/1; Reuters Messaging: william.rasmussen.reuters.com@reuters.net))
Keywords: MARKETS EGYPT CLOSER/
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