Obama set to reappoint Bernanke, Babcock & Brown to be liquidated: Economy roundup

US President Barack Obama is reportedly preparing to appoint Ben Bernanke as chairman of the Federal Reserve for a second term, in an event in Massachusetts.

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The paper reports a White House official as saying Obama will keep Bernanke as chairman due to his part in helping the US fight off the recession.

“The president thinks that Ben’s done a great job as Fed chairman, that he has helped the economy through one of the worst experiences since the Great Depression, that he has essentially been pulling the economy back from the brink of what would have been the second Great Depression,” the unnamed source told the WSJ.

Other administration officials have reportedly told the paper that the decision to keep Bernanke as chairman was partly due to a need to keep the market stable.

Obama is now set to make the announcement at 2300 AEST.

Meanwhile, the Australian share market has opened flat today, after activity cooled following a four day rally on Wall Street where stocks reached a 10-month high.

The benchmark S&P/ASX200 index was down 25.5 points or 0.58% to 4400.6 at 12.00 AEST. The Australian dollar also moved up to US83c.

ANZ shares have gained 0.4% to $19.89, with AMP shares also gaining 0.6% to $6.20. NAB shares rose 1.2% to $26.99 while Westpac shares fell 1% to $23.50.

Suncorp profit drops 40%

Suncorp-Metway has recorded a 40% decline in net profit to $348 million, and says it will now direct its focus towards its core banking and insurance offerings.

“The group expects economic conditions to remain volatile for some time as investment markets look for signs of economic recovery,” the company said in a statement.

The company announced a 16.9% jump in profit before tax and bad debts at $781 million, but $710 million in bad debt expenses erased any gains. Chairman John Story said in a statement the company has faced a challenging year.

“The 2009 financial year coincided with the most volatile period in Australian financial services history and, although underlying performance remained solid, each of our businesses was impacted by an unfavourable operating environment,” he said.

Property and retail company Centro Retail Group has recorded a $2.68 billion loss, and says the result is due to devaluations in the market. Total revenue was up to $99.4 million, from $92 million during the 2007-08 year.

‘While we are seeing positive signs of recovery in both markets, we remain cautious in our outlook and expect real estate fundamentals to lag the recovery in the broader economy,” chief executive officer Glenn Rufrano said in a statement.

Babcock & Brown creditors kill off company

Creditors of collapsed financial services company Babcock & Brown have voted to liquidate the company and will now be asked to contribute $400 each to help fund further investigations into the collapse of the company.

The administrators, David Lombe and Simon Cathro of Deloitte, want to investigate alleged conflicts of interest at the group and questions over whether it traded while insolvent.

“In particular, we are interested to further investigate a key question: ‘At what stage did the BBL Directors have regard to the interests of the noteholders and creditors in making their decisions about the conduct of the group’s business?’,” Lowe said at a creditors meeting yesterday.

Spotless in $100 million capital raising

Outsourcing and facility services group Spotless is now looking for $100 million in equity after recording a 64% increase in annual net profit. The company also recorded a 17.5% decline in underlying net profit to $4.1 million.

Spotless said the $100 million would help the company reduce its gearing and keep its balance sheet strong.

Overseas, on Wall Street, investors took a break after a four day rally that sent stocks to a 10-month high. A gain in prices for US treasury debt helped the market stay flat.

The Dow Jones Industrial Average gained 3.32 points, or 0.03%, to 9,509.28.