ASIC hits Commonwealth Bank with $100,000 fine, Construction sector slide: Economy Roundup

The Commonwealth Bank will pay a fine of $100,000 to the Australian Securities and Investments Commission after receiving an infringement notice regarding its capital raising last December, which it scrapped due to criticisms that it did not reveal all relevant financial information.

Chief executive Ralph Norris said in a statement the bank is disappointed with the fine.

“Loan impairment expense is a single line item in the group’s profit and loss statement and cannot be considered in isolation,” Norris said in a statement.

“As noted in our ASX (Australian Securities Exchange) announcement at the time, we were experiencing strong volume and revenue growth which, in our view, significantly offset the forecast increase in loan impairment expense, such that the net impact on our overall profitability was not material.”

Meanwhile, new figures from the Australian Bureau of Statistics show the seasonally adjusted estimate of the total value of building work completed in the June quarter fell 5.3% to $16.9 billion, after a fall of 2.1% in the March quarter.

The estimate of the value of new residential work completed fell 1.2% to $8.2 billion, with work on new houses falling 1.8% to $5.5 billion and other residential buildings remaining flat at $2.7 billion. The value of non-residential building work fell 8.5% after a rise of 1.2% in the March quarter.

Telstra is urging for a Senate Inquiry in order to delay any debate on the proposed legislation that would see the company split its retail and wholesale divisions.

“If the Government decides to proceed with the Bill, we believe that it is only sensible that the Senate defer debate until after the conclusion of the constructive discussions between Telstra and the Government over the NBN and the completion of the Government’s NBN implementation study,” Telstra NBN engagement group chief Geoff Booth told The Australian.

The company is still opposed to the Government’s plans, saying any similar plan would hinder the success of the $43 billion National Broadband Network. Booth, along with director of regulatory affairs Tony Warren and director of public policy David Quilty, said the move would reduce industry competition and disadvantage rural customers.

But communications minister Stephen Conroy has said the Government does not need to delay any debate on the issue.

“What we’re seeing here is Senator Minchin and the Liberals being completely policy free,” Conroy told Sky News. “Ultimately what we have to do is find a win/win solution, which we’ve always believed is valid.”

Opposition communications spokesperson Nick Minchin has said the success of the NBN depends on the level of cooperation with Telstra, and that the Government should not rush the process.

Australian sharemarket rises despite Wall Street loss

The Australian sharemarket has opened higher today, despite a negative lead from Wall Street where Johnson & Johnson reported lower-than expected earnings.

The benchmark S&P/ASX200 index was up 20.1 points or 0.42% to 4805.8 at 12.00 AEST. The Australian dollar reached US91c during the offshore trading session – a new 14-month high – but remained steady this morning at US90c.

Commonwealth Bank shares increased 0.7% to $54.01, while NAB also moved higher 0.1% to $31.52. Westpac gained 0.3% to $26.40 as AMP lost 1.7% to $6.83.

CSL financial results on par with expectations

Pharmaceutical group CSL has said its first quarter trading is consistent with its expectations, but that the Australian dollar may affect its 2010 profit by up to 16%.

The company, which manufactures the Swine Flu and GARDASIL cervical cancer vaccines, said in a statement it will be forced to reduce its profit if currency rates remain steady.

“At the end of the first quarter of the current financial year, I can advise the company is trading consistently with our expectations,” chairwoman Elizabeth Alexander said at the company’s AGM.

“For the 2009/2010 fiscal year, we expect net profit after tax to be between $1.16 billion and $1.26 billion at 2008/2009 exchange rates,” she said, echoing guidance of a 14 to 24% lift in underlying operational profit given at the company’s full-year results in August.

On Wall Street, processing chip manufacturer Intel recorded positive results as the market for personal computers and laptop improves. The company recorded third quarter net profit of $US1.9 billion, with revenue falling 7.8% to $US9.4 billion.

But investors weren’t optimistic, with stocks falling as Johnson & Johnson reported disappointing financial results. The Dow Jones Industrial Average fell 14.74 points, or 0.15% to 9871.06.