Shares hit 12-month low: Economy Roundup

The Australian share market has opened lower this morning at a 12-month low, following disappointing leads from European and Asian markets.

The benchmark S&P/ASX200 index was down 13 points or 0.31% to 4208.9 at 11.55AEST, while the Australian dollar rose to US83c.

Commonwealth Bank shares rose 0.9% to $48.23, while NAB shares gained 0.9% to $22.93. Westpac rose 0.8% to $20.96 as AMP lost 0.4% to $5.08.

Singapore Telecommunications has fuelled rumours of an Optus IPO after the company released data comparing the company’s performance to the ASX top 25, the AFR reported.

Chief executive Paul O’Sullivan told investors the company would be 19th on a revenue basis if listed on the ASX.

However, the speculation comes after SingTel chief executive Chua Sock Koong said the company was not planning a float after the telco’s full-year results were released last month.

“We have no plans currently to look at an IPO of Optus,” Chua said at the time.

Fairfax has also reported that Woolworths and Myer will move in to the $20 billion insurance market offering home, car and travel products.

Spokesperson Luke Schepen said the products would sit well against the current market offerings, saying insurance is an “everyday need and Woolworths is in the business of everyday needs.”

NAB matches Westpac on parental leave

National Australia Bank has announced its 25,000 employees will receive superannuation benefits on paid parental leave, emulating a similar announcement made by rival Westpac last week.

The new arrangement means NAB employees will receive 40 weeks of super payments, in addition to the 12 weeks already offered.

Chief executive Cameron Clyne said extending super payments to parents on unpaid leave was a “good idea” that would benefit staff.

“When we heard last week that one of our competitors had decided to extend superannuation payments to employees on unpaid parental leave, we thought that is a good idea.”

“Competition between the banks is a good thing, but it shouldn’t get in the way of a good idea like this. We investigated whether the initiative could work at NAB, found that it could, and decided to implement it as soon as practicable.”

Meanwhile, new figures from the Australian Bureau of Statistics reveal the trade surplus lifted by a higher than expected amount during May, with the balance of trade now at $1.64 billion, seasonally adjusted.

The figure represents an increase of $522 million from the revised April surplus. The announcement also comes after a Reuters poll showed expectations for just a $500 million increase.

Valemus chief executive Peter Brecht has said he understands why Bilfinger has postponed the company’s $1.2 billion initial public offering, saying that world markets remain volatile.

“However, due to the current adverse equity market conditions, we understand why Bilfinger Berger AG has taken the decision to postpone the IPO,” Brecht said. Bilfinger chief executive Herbert Bodner also made a statement.

“Bilfinger Berger’s asking price for the Australian business cannot realistically be achieved in light of the current adverse conditions on the stock exchange,” he said.

QBE buys Belgian group Secura NV

QBE Insurance Group has bought Belgian reinsurer Secura NV for nearly $400 million in order to continue its growth strategy through a series of acquisitions.

“The acquisition meets QBE’s objective of earnings per share accretion in the first year,” chief executive Frank O’Halloran said in a statement.

In the mining industry, BlueScope Steel has said it will defend itself against claims it misled a Hong Kong company during the sale of an iron sands mine in 2008.

“BlueScope steel strongly denies the allegations and will be vigorously defending itself against the claims,” a BlueScope spokesman told AAP.

Marcarthur Coal has upgraded its profit guidance after announcing its annual sales volume exceeded expectations.

The company said it now expects NPAT of between $115-125 million, before non-cash adjustments, well above the previous estimate of between $103-113 million.

In the United States, analysts say Wall Street stocks will suffer this week. The market was closed yesterday for the Independence Day holiday, but last week the Dow Jones Industrial Average dropped 4.5% – a trend analysts say will surely continue.