Billabong’s market value falls by half following capital raising launch: Midday Roundup

Shares in troubled Aussie surf wear icon Billabong International plunged nearly 50% after coming out of a trading halt this morning.

Its shares were 90 cents, falling 49.2%, following last week’s earnings downgrade and the launch of a $225 million capital raising.

Billabong has completed the institutional component of its accelerated pro-rata renounceable entitlement offer and had raised about $155 million, or 79% of the new shares available.

Billabong launched the capital raising just months after knocking back a $3.30-a-share takeover offer.

Australia’s big four banks ranked most profitable in the world

Australia’s big four banks have been ranked the most profitable in the developed world for the second year running by the influential Bank for International Settlements.

The major banks enjoy wider interest margins and lower costs than most of their overseas peers, the annual report of the Switzerland-based institution shows.

Commonwealth Bank, Westpac, ANZ and NAB posted pre-tax profits equal to 1.19% of their assets in 2011, according to the report.

This was the highest level of profitability among banks from 13 nations included in the annual survey of bank profits, after the big four also topped the BIS profit league tables in 2010

Perpetual slashes profit guidance, and jobs

Fund manager Perpetual has slashed its profit forecast and has confirmed it may need to cut about 300 jobs over the next years as part of a corporate restructure.

The company will attempt to change itself over the next three years in order to cut down on costs and simplify its structure.

According to a statement to the ASX, the company said its full year net profit will drop to between $22 million and $29 million, down from the $62 million recorded in the last financial year.

Executives will also suffer pay cuts, with chairman Peter Scott to see his salary dropped by 42%. Remuneration for non-executive directors is to fall by an average of 25%, according to the company.

“The reductions to the board costs show that we are committed to a company-wide review to enable Perpetual to support a return to growth in value for shareholders,” Scott said in a statement.

“We needed to take an honest look at our business and it was clear our operating model was not sustainable and our operational structure not optimal,” said chief executive Geoff Lloyd.

Greek leaders to miss out on EU talks

Greece’s new prime minister and finance minister will both miss a key summit due to health reasons as the country begins to renegotiate the terms of its austerity-dependent bailout.

Prime minister Antonis Samaras must avoid travel after undergoing eye surgery, with foreign minister Dimitris Avramopoulos to represent the company. Finance minister Vasillis Rapanos was admitted to hospital last week after complaining of stomach pains.

The negotiations are critical as the country attempts to work out new terms for its austerity measures that the public will find acceptable.

Australian stock market falls below 4,000 points barrier

The Australian sharemarket continues to fall in morning trade, breaking the key 4,000 point barrier, as traders look to Europe to see what the region’s leaders will do next in their bid to solve the continuing economic crisis.

At 1100 AEST, the benchmark S&P/ASX 200 index slipped 1.22% to 3,998.7 points, while the broader All Ordinaries Index fell 1.16% to 4,046.3 points.

It is the second time the market has fallen below the point this month.

“Quiet and sombre look as though they will be appropriate descriptions for the Australian market in the last week of the financial year,” said Ric Spooner, chief market analyst at CMC Markets.

“The European Leaders summit looms as the key event for investors this week. The success of the summit can probably best be measured by whether it achieves a meaningful and lasting decline in Spain’s bond yields.”