Retail trade lower than 2008: Economy Roundup

Retailers are now trading at lower values than the corresponding period in 2008, according to new figures released by the Australian Retailer’s Association.

The ARA, which has been tracking week-by-week growth over the Christmas period, has found 54% of retailers are trading below the corresponding week from 2008. About 35% are trading above, while 11% are trading at the same level.

ARA Executive Director Russell Zimmerman says three consecutive interest rate rises has significantly affected the retail industry.

“With only 15% of retailers stating that last week’s trading met expectations, the projected $38.7 billion in retail sales this Christmas (NSW $12.6 billion, Victoria $9.3 billion, Queensland $8.1 billion, WA $4.1 billion, South Australia $2.7 billion, Tasmania $812 million, NT $386 million, ACT $735 million) will hopefully rush through retail registers before Christmas Day,” Zimmerman says.

“Retailers should use these last days of Christmas trade to promote and maintain a solid customer base by providing improved customer service and offer a competitive range of products and services.”

ASX criticises government over ASIC powers

The Australian Securities Exchange has hit out at the Government’s decision to rid it of some regulatory powers, and instead award them to the Australian Securities and Investments Commission.

It comes after ASIC released a discussion paper earlier this week promoting guidelines for listed companies on how to deal with leaks and rumours regarding raisings.

“It is important that there are adequate accountability mechanisms in place to ensure that the regulator is effectively carrying out its new responsibilities,” the ASX said in a submission.

“It is important that the framework legislation does not squander the opportunity, created by the Government’s decision to achieve greater role clarity and associated accountability for exchanges and regulators.”

The Australian sharemarket has opened flat today, despite Wall Street reaching a 14-month high on the back of positive new home sales data.

The benchmark S&P/ASX 200 index was up 27 points or 0.58% to 4731.3 at 12.00 AEST, while the Australian dollar continued its decline to US87c.

Commonwealth Bank shares dropped 0.1% to $52.53, while ANZ lost 0.1% to $21.45. AMP gained 0.9% to $6.61, while Westpac rose 0.7% to $24.33.

Telstra begins float process

As reported in The Australian, Telstra has now begun the process for the $US1 billion float of a Chinese real estate website, appointing at least five investment banks to manage the deal.

It is understood that UBS, JPMorgan, Goldman Sachs, Merrill Lynch and Deutsche Bank are now involved in the listing of Soufun. Telstra purchased a 51% share in the company three years ago for $342 million.

In the mining sector, Gloucester Coal shares have opened over 25% higher following a takeover offer from Macarthur Coal. Shares rose to $8.16 this morning, with Macarthur shares rising just 1.1% to $9.82.

Retail operator Asciano has now signed a $600 million contract with Whitehaven Coal which will more than double the rail capacity for the latter over two years.

“This long haul, take or pay contract is expected to generate at least $600 million of revenue for Asciano over the term of the agreement,” Asciano said.

Babcock & Brown Power has now signed a moratorium agreement with North West Shelf gas sellers, and has additionally restructured its loan agreement. Shares have now jumped over 26% as a result to about 9.2c at 11.00 AEST.

The company will see a number of one-off items as a result of the deal, but it said it would eliminate any short-time refinancing risk.

In the US, stocks rose on the back of good housing data. The National Association of Realtors said overnight existing home sales increased by 7.4% to an annual rate of 6.54 million units – the fastest pace since February 2007.

The Dow Jones industrial average rose 50.79 points, or 0.49%, to 10,464.93.