Wotif shares plummet; Economic activity slowing: Midday Roundup

Travel booking website Wotif’s shares have plummeted this morning, as the company announced a downgrade in profit expectations for the first half.

In a statement to the Australian Securities Exchange, Wotif lowered its profit expectation for the 2013-14 half year to between $21.9 million and $22.6 million, compared to the corresponding period’s profit of $27.5 million.

Following the announcement, Wotif’s shares dropped by as much as 30%, currently trading 27.51% lower at $3.03 at 11:25am AEDT.

Economic activity slowing

The Westpac Melbourne Institute Leading Index of Economic Activity slipped in November, indicating a slightly slower pace of economic activity in the next three to nine months.

The index fell from 1.24% in October to 1.11% in November.

Despite the fall, the growth rate for the leading index has been has been above trend for the past 12 months.

Westpac chief economist Bill Evans says prior to the last 12 months, there had been a period of 18 months where growth was below trend.

“Recent above trend growth is pointing to an above trend outcome over the next few quarters… Westpac is expecting growth over the year to June 2014 of 2.4% while the Reserve Bank recently released its own growth forecasts to June at 2.5%,” he says.

“Both forecasts take into account a significant drag from the downturn in mining investment.”

Shares steady on open

Aussie shares have opened slightly lower this morning, following minor loses on Wall Street overnight.

The S&P/ASX200 benchmark was down 1.3 points to 5101.9 at 11:40am AEDT. The Dow Jones closed 9.31 points lower last night, down 0.06% to 15,875.26.