Today's Business Headlines

17/10/2008 - 06:55

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WA rips $1.8bn off regional deal; RBA plans drastic rates cut; Chinese Rio play embroiled in Lehman collapse; Mills push FMG for freight cuts; NAB to be first cab off the rank

Today's Business Headlines

WA rips $1.8bn off regional deal
The Barnett government's election winning pact with the National Party to spend $2.8 billion on regional projects over four years has been radically scaled back just weeks after it was sealed, with revelations the policy will involve only $1 billion of new spending. The Fin Review

RBA plans drastic rates cut
Financial markets are tipping a 2.25 percentage point cut in official interest rates by Easter as fears for the global economy cause further havoc on sharemarkets. The Australian

Chinese Rio play embroiled in Lehman collapse
The battle for control of Rio Tinto has taken a dramatic twist after it emerged that a strategic stake in the resources giant secured by Chinese raider Chinalco has been caught up in the collapse of US investment bank Lehman Brothers. The Fin Review

Mills push FMG for freight cuts
Fortescue Metals Group has been forced to renegotiate deliver contracts with some struggling Chinese customers, as plunging steel prices push higher-cost mills to crisis point. The West

NAB to be first cab off the rank
National Australia Bank has all but doused speculation of more write-downs by bringing forward its full-year results announcement to next Tuesday and backing consensus estimates of an 11 per cent fall in cash earnings to about $3.9 billion. The Australian

 

THE WEST AUSTRALIAN:

Page 1: Hopes that Australia, and particularly WA, may withstand much of the world economic turmoil, were dealt a huge blow yesterday when investors slashed the share prices of Rio Tinto and BHP Billiton amid a growing realisation that commodity prices would be hit far harder by the US meltdown than previously thought.

Page 4: WA's public hospitals are in the grip of an acute shortage of at least 800 nurses that even relief nurses cannot fill, with a major Perth hospital resorting sending notes to patients on their meal trays warning of delays in non-urgent care.

Page 5: A leading WA fisheries researcher says a government decision to defer seasonal fishing bans aimed at protecting popular species had put them at risk of overfishing and at least one type - dhufish - may never recover.

Page 6: Economists are downgrading growth forecasts for Australia as fears mount that the federal government's $10.4 billion rescue package may not provide enough insulation against a US recession.

Page 7: Federal Climate Change Minister Penny Wong says the global financial crisis is no excuse to back away from tackling climate change and Australia has a moral duty to continue with an emissions trading scheme.

Rents in Perth's crammed CBD will crash through the record $1,000/sqm mark by the end of this year, with an 8.6 per cent rise in city office rents expected in the next 12 months, a market analyst predicts.

Page 9: Former police minister Gordon Hill, whose private company is charged with selling shares in failed fuel technology company Firepower without a prospectus, claims Firepower boss Tim Johnston misled him onto thinking the company compiled with the rules for a sharemarket listing.

Page 10: Big gas users in WA are paying three times more for gas than those in the eastern states because of the anti-competitive marketing arrangements of the North West Shelf joint venture partners, the project's customers say.

Page 14: The royalties for regions policy is beginning to appear a fraud amid further revelations that projects which already have funding could be re-badged as part of the scheme, the opposition says.

Business: Seven months after China's government-controlled aluminium giant Chinalco led a $US14 billion (20.9 billion) raid for 9 per cent of Rio Tinto in a desperate attempt to thwart BHP Billiton's takeover ambitions, the fate of the stake is in doubt after being caught up in the collapse of US investment bank Lehman Brothers.

Australia's No.3 internet provider iiNet, will not follow AAPT in quitting the Terria broadband consortium for fear Telstra could be gifted the government's $4.7 billion broadband subsidy if the group disbanded.

Australia's biggest oil and gas company, Woodside Petroleum, has trimmed its full-year production forecast but still managed to deliver a big rise in revenue for the third quarter after cashing in on soaring prices.

Fortescue Metals Group has been forced to renegotiate deliver contracts with some struggling Chinese customers, as plunging steel prices push higher-cost mills to crisis point.

Ten Network has refused to give any future earnings guidance after a terrible fourth quarter triggered a 24.7 per cent fall in annual profit.

National Australia Bank has sought to head off doubts over its financial health by bringing forward by two weeks the release of its accounts, which will show an 11 per cent drop in annual earnings.

 

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: The battle for control of Rio Tinto has taken a dramatic twist after it emerged that a strategic stake in the resources giant secured by Chinese raider Chinalco has been caught up in the collapse of US investment bank Lehman Brothers.

A $US60 billion Swiss government bailout of banking giant UBS raised the spectre of more global financial market turmoil as Asian sharemarkets were savaged after a slump in US consumer spending confirmed the onset of a recession.

Corporate leaders have warned Prime Minister Kevin Rudd against imposing tough rules on executive salaries as the government softened its stance on the issue, conceding that most banks were well run and their executives paid appropriately.

Page 3: The Barnett government's election winning pact with the National Party to spend $2.8 billion on regional projects over four years has been radically scaled back just weeks after it was sealed, with revelations the policy will involve only $1 billion of new spending.

International holidaymakers face surcharges of up to 40 per cent as travel operators pass on costs caused by the falling Australian dollar.

Page 5: Ford Australia has confirmed it will cut another 450 jobs, putting the Rudd government under intense pressure to release its support package for the car industry to stave off the predicted loss of up to 7,000 jobs at component makers.

Page 7: Industry has warned the national infrastructure adviser that the credit crisis could lead to a blow-out in the cost of projects and fewer bidders on deals.

 

THE AUSTRALIAN:

Page 1: Financial markets are tipping a 2.25 percentage point cut in official interest rates by Easter as fears for the global economy cause further havoc on sharemarkets.

Page 4: ExxonMobil has appealed to the federal coalition to use its numbers in the Senate to protect the petrol refining industry from being forced offshore by the Rudd government's proposed emissions trading scheme.

Business: Equities markets were in freefall as fears of a global recession overshadowed massive efforts to bolster the financial system.

Mining giants BHP Billiton and Rio Tinto suffered their biggest one-day falls in 21 years yesterday, as investor confidence in Chinese growth was sapped by falling commodity prices and Rio's comments that Chinese demand had slowed more than anticipated.

National Australia Bank has all but doused speculation of more write-downs by bringing forward its full-year results announcement to next Tuesday and backing consensus estimates of an 11 per cent fall in cash earnings to about $3.9 billion.

Resources stocks took another dive yesterday, as commodity prices sank lower and analysts tipped future projects were now in doubt.

China would maintain annual growth of at least 7.5 per cent for the next two decades, withstanding the worst of the global financial crisis to remain one of the fastest-growing economies in the world, Australia's ambassador to China said yesterday.

Switzerland became the latest European country to bail out its troubled banking sector last night by injecting SFr6 billion ($7.8 billion) into UBS, taking what could become a 9.3 per cent stake in the bank.

Tokyo shares dropped 11.4 per cent yesterday, but the real focus of regional concern remains the crash devaluation of the South Korean won.

Fears of a deep recession sparked the worst drop in the Dow Jones Industrial Average in 21 years, as retail sales tumbled, demand for commodities sank and bank earnings fell.
Former and current ANZ executives, including chief executive Mike Smith, could be questioned over the collapse of Primebroker Securities, after creditors yesterday agreed to put the Melbourne stock-lending firm into liquidation.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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