Rio plunges 34pc amid debt fears; Rudd flags deficit to boost growth; Demand for skilled jobs plunges; Qantas facing Moody's review; NRW slumps as Fortescue defers $87m Pilbara rail contract
Rio plunges 34pc amid debt fears
Rio Tinto shares plunged 34 per cent yesterday, wiping $10 billion off the mining giant's sharemarket value, as investors confronted the prospect that the company may have to raise billions of dollars to repay debt after BHP Billiton abandoned its $160 billion takeover plan. The West
Rudd flags deficit to boost growth
Prime Minister Kevin Rudd yesterday opened the way to the federal budget going into deficit as he delivered a grim update on the global and Australian economic outlook. The Fin Review
Demand for skilled jobs plunges
Vacancies for skilled jobs have collapsed to their lowest level in 15 years, stoking fears of a substantial downturn in the labour market as business investment and construction activity slow. The Fin Review
Qantas facing Moody's review
Qantas shares fell again yesterday on news that Moody's Investors Service was reviewing the airline's credit rating in the wake of its 64 per cent pre-tax profit downgrade. The Australian
NRW slumps as Fortescue defers $87m Pilbara rail contract
Contractor NRW Holdings yesterday felt the flow-on effects of Fortescue Metals Group's decisions to wind back spending, with its shares plunging 35 per cent on the confirmation that the iron ore group had deferred an $87 million contract in the Pilbara. The West
THE WEST AUSTRALIAN:
Page 1: The Rudd government's key $4.7 billion broadband promise has suffered a major blow after Telstra declared yesterday it would not roll out super-fast internet services to vast parts of the country because it would be unable to generate an adequate profit in many regions.
Page 3: The childcare arrangements of thousands of families have been thrown into chaos with about half of WA's ABC Learning centres at risk of closing next year after an assessment by receivers trying to salvage the ailing company.
Rio Tinto shares plunged 34 per cent yesterday, wiping $10 billion off the mining giant's sharemarket value, as investors confronted the prospect that the company may have to raise billions of dollars to repay debt after BHP Billiton abandoned its $160 billion takeover plan.
Page 4: About 500 protesters have rioted at a toy factory in southern China, flipping over a police van, storming the plant's gates and smashing computers over a pay dispute.
Kevin Rudd has changed his mind about driving the budget into deficit, saying yesterday that the impact of the global financial crisis might require the federal government to increase spending further while revenue continued to decline.
Page 5: Construction union boss Kevin Reynolds claimed a victory over the building industry watchdog yesterday after charges against a CFMEU official were dropped.
Employer groups fear militant unionists will start harassing workers at non-unionised workplaces under the Rudd government's new industrial relations laws, which have handed greatly expanded powers to the labour movement.
Business: Fortescue Metals Group chairman Herb Elliot has sold 16 per cent of his shareholding in the troubled iron ore producer, which yesterday admitted to a further production cut.
Contractor NRW Holdings yesterday felt the flow-on effects of Fortescue Metals Group's decisions to wind back spending, with its shares plunging 35 per cent on the confirmation that the iron ore group had deferred an $87 million contract in the Pilbara.
Rio Tinto has set out to hose down market concerns that it is financially vulnerable after BHP Billiton abandoned its $160 billion takeover bid.
BHP Billiton chairman Don Argus wanted to create a national champion by driving home his dream of merging BHP with long-time adversary in the global resources scene, Rio Tinto.
David Jones will rely on an accelerated cost-cutting program and tight inventory management to reach its forecast 5 to 10 per cent profit growth for the year, after reporting a 6.3 per cent fall in first-quarter sales and warning of worse to come.
At least a dozen investment banks that had been counting down to pay day after working hard around the clock on Project DeBello in the past year have suddenly seen more than $460 million in advisory fees evaporate.
BHP Billiton's Ravensthorpe nickel project could be on borrowed time, analysts said yesterday after the company took a hefty $3.3 billion write-down to see it join a handful of problematic WA projects that have cost shareholders and estimated $6 billion in 10 years.
QBE Insurance will raise up to $2 billion to fund an offshore buying spree, with the underwriting giant snapping up five insurance specialists, mostly aimed at bolstering its US footprint.
Perth jumped up the list of the world's fastest growing property markets even as office rents in the world's top addresses fell in the third quarter for the first time in almost seven years.
Elders Rural Services will axe 5 per cent of its staff across the country - 14 jobs - in the second stage of embattled parent Futuris' restructure plans for the agri-business.
Cooper Energy managing director Mike Scott yesterday underlined the difficulty Canadian group TransAtlantic Petroleum might have in pushing ahead with its bid for Cooper's one-time target Incremental Petroleum when he reaffirmed the group was "very happy" with its investment.
THE AUSTRALIAN FINANCIAL REVIEW:
Page 1: The ghost of Magma Copper loomed over BHP Billiton's directors as their two-and-a-half day board meeting got underway on Monday.
Prime Minister Kevin Rudd yesterday opened the way to the federal budget going into deficit as he delivered a grim update on the global and Australian economic outlook.
Telstra has thrown the Rudd government's broadband plans into doubt by rejecting the primary goal of connecting 98 per cent of Australians to faster services and opening the way for a legal fight over a core Labor election promise.
Some of the nation's wealthiest private investors who cashed up during boom times are wading back into the property market to snap up bargain buys as distressed sellers start offloading assets.
Page 3: Close to 40 per cent of ABC Learning's centres have doubtful profitability levels and could close by the end of the year, the receiver for the childcare giant has revealed.
The Australian Taxation Office will electronically match the sale and ownership records of racehorses against people's tax file numbers and other wealth indicators, as part of its crackdown on rich individuals.
Page 5: Australian coal companies are resigned to a grim outlook for the next 12 months as the world's steel makers scale back production in response to the global slowdown.
The global financial crisis has cost charities millions of dollars of investment income and has hurt their ability to deliver social services.
Vacancies for skilled jobs have collapsed to their lowest level in 15 years, stoking fears of a substantial downturn in the labour market as business investment and construction activity slow.
Page 7: Tougher controls on short selling are set to become law within a week as the Rudd government firms up support for the changes despite a coalition vow to oppose a key element of the reforms.
Corporate collapses in Australia had reached $25 billion to $30 billion since the global financial crisis struck, the Australia Securities and Investments Commission said yesterday.
Page 9: West Australian Premier Colin Barnett has welcomed BHP Billiton's decision to scrap its bid for Rio Tinto as being in the best interests of a competitive mining industry and of his state.
Employers might find it more difficult to make staff redundant or outsource business divisions under the federal government's proposed workplace relations laws.
THE AUSTRALIAN:
Page 2: Telstra won't put in a detailed bid for the $10 billion-plus national broadband network unless it gets a range of guarantees.
Top 100 companies pay chief executives a combined $112 million to leave, with PBL's John Alexander and the stock exchange's Tony D'Aloisio alone pocketing $22.7 million in termination payments.
Strong growth in construction industry in September quarter lifts hopes for Australia's economic growth.
Page 3: New software will allow teachers to identify gaps in students' literacy and numeracy skills.
The cost of petrol yesterday fell below $1 a litre as service stations opted to slash profits and sell fuel at close to wholesale price.
Australian expatriates are leaving Britain and returning home in record numbers as global financial crisis takes hold.
Page 4: Western Australia is on the verge of pulling out of the federal program to provide computers for all high school students, saying Kevin Rudd should pay for his own election commitments.
Business: Mining giant Rio Tinto went on the defensive about its huge debts yesterday as nervous domestic investors dumped its shares in a savage reaction to BHP Billiton's shock decision to abandon the $135 billion takeover.
QBE Insurance has bought the niche US underwriting agency ZC Sterling for $885 million and enhanced its capital position with a $2 billion institutional placement and other capital management initiatives.
Qantas shares fell again yesterday on news that Moody's Investors Service was reviewing the airline's credit rating in the wake of its 64 per cent pre-tax profit downgrade.
Australian newspapers to lose up to $1 billion in revenue in the next four years as classified advertising migrates online, media analysts say.
