Housing loans fall 1.7% during October, Abbot says Work Choices not completely dead: Economy Roundup

The total value of owner occupied housing commitments, excluding alterations and additions, decreased by a seasonally adjusted 1.7%, according to the latest figures from the Australian Bureau of Statistics.

Additionally, the total value of personal finance commitments fell by a seasonally adjusted 1.5%, with fixed lending commitments and revolving credit commitments dropping 1.9% and 1.2% respectively.

In commercial finance, the seasonally adjusted series for the value of total commitments fell by 16.3%, while fixed lending commitments and revolving credit commitments dropped by 17.1% and 14.4% respectively. The total value of lease finance commitments also increased by 0.5%.

Oil giant Woodside Petroleum has now embarked on a $2.5 billion capital raising in order to fund its expansion into the LNG sector.

Shareholders will be able to acquire one new share for every 12 held at $42.10 per share.
Royal Dutch Shell is expected to take up its full entitlement for $862 million.

“This will give them a fair leeway in terms of building up their equity position and their ability to service debt,” Pengana Capital portfolio manager Tim Schroeders told Reuters. “They may need more capital down the track, but we’re talking some two-plus years out.”

Shares flat despite Wall Street leads

The Australian sharemarket has opened flat today despite strong leads from the US on Wall Street, as both weaker gold and oil prices have weighed down the market.

The benchmark S&P/ASX200 index was down 12 points or 0.27% to 4622.6 at 12.00 AEST, while the Australian dollar has also fallen slightly to US91c.

ANZ shares gained 0.3% to $21.36, while Commonwealth Bank shares fell 0.5% to $52.26. NAB lost 0.7% to $28.01, as AMP gained 0.6% to $6.27.

AMP and AXA SA have now made a revised bid for AXA Asia Pacific Holdings, upgrading the offer’s cash component by 16.4% to $1.92 per share.

An extra $515 million in cash will be offered under the new terms, with $100 million of that amount to be contributed by AMP and the rest from AXA APH’s parent company in France.

“AXA APH has an enviable position in Asia delivering strong growth and an Australian and New Zealand business that is well positioned to take advantage of the recovery in markets and to respond to the anticipated future regulatory changes,” AXA APH chairman Rick Allert said in a statement.

Meanwhile, Bank of Queensland chief executive David Liddy has warned the Australian banking sector is heading towards a “retail-style oligopoly”.

In an interview with the Sky News Business Channel, he said the increased competition seen over the last decade and a half is “basically gone in the past 18 months”.

“I’ve used the expression that we don’t want a retail-style oligopoly in banking and I think we are heading towards that,” he said. “The majors today are writing about 95 to 98% of all new mortgages so we have an issue in terms of consumer choice.”

“I think what we need to do is look to the long-term implications of having that sort of control in just four hands.”

Tony Abbott says Work Choices not quite dead

Additionally, federal opposition leader Tony Abbott has said the coalition’s old Work Choices legislation is “dead”, but some aspects of the program could remain policy.

“I should point out that just because Work Choices is dead, it doesn’t mean we don’t still need a free as well as a fair labour market, and I would certainly like to see less union power than we have been witnessing under the Rudd Government,” he told Macquarie Radio today.

“So Work Choices is well and truly dead but there are some aspects, many aspects of the Howard government policies, until Work Choices went too far, that we do need to keep… The interesting thing about what Mr Rudd has done, is that he hasn’t just undone Work Choices, he has undone the 1996 changes negotiated between Peter Reith and the Democrats.”

“He has even undone many of Mr Keating’s changes brought in, in 1993, which were an important part of our economic success, an important part of ensuring that the global financial crisis didn’t jack up unemployment the way all previous crises of that kind had.”

In the telecommunications sector, Telstra and the National Broadband Network Company are reportedly close to fixing a deal in which the telco would transfer some of its home phone network traffic and copper infrastructure to the NBN Co.

The Australian Financial Review reports the deal will not involve an agreement for the NBN Co. to purchase any major underground infrastructure, but instead could lease parts of its network.

Obama introduces new finance regulatory reform

Meanwhile in the US, investors are nervous ahead of the Federal Reserve’s final 2009 meeting next week, but have also been hit by the move by Congress to approve a sweeping reform of banking regulation laws.

The reforms, which were introduced by president Barack Obama in June, are the biggest since the Great Depression and could see the president’s approval polls start to head upwards. The bill creates an agency to watch risk in the economy and in credit rating agencies, the creation of a financial consumer watchdog agency and will give Congress the ability to scrutinise parts of the Federal Reserve’s monetary policy.

“Americans don’t choose to be victimised by mysterious fees, changing terms, and pages and pages of fine print. And while innovation should be encouraged, risky schemes that threaten our entire economy should not,” Obama said in a statement.