Retail sector profits down $480m; government tells ASIC to “lift their game”: Midday Roundup

Aussie retailers have reported nearly $480 million worth of losses since the May federal budget was handed down, reports Fairfax.

Several big retailer players including Kathmandu, Pacific Brands, The Reject Shop, toy wholesaler Funtastic, Super Retail Group and footwear chain RCG Group have downgraded earnings forecasts in the past month, with most blaming the outlooks on unseasonably warm weather and a ‘tough’ federal budget curbing consumer spending.

The recent Westpac-MI Consumer Sentiment index fell from 99.7 in April to 92.9 in May, in the wake of the federal budget, down from a high of 110.3 last November.

Federal government tells ASIC to “lift their game”

The federal government says the Australian Securities and Investments Commission investigators must “lift their game” in the wake of the Senate inquiry into the Commonwealth Bank, reports The Australian.

Finance Minister Mathias Cormann was asked on radio this morning about ASIC’s failure to investigate tip-offs against the CBA.

“ASIC of course has come out and has acknowledged they got some of these things wrong, and they’ve certainly got to lift their game,” said Cormann.

The Senate inquiry yesterday condemned the conduct of the CBA, calling for a Royal Commission to investigate the scandal involving rogue financial planners.

The Commonwealth Bank has said it is sorry some of its financial advisers failed customers, but denies it has downplayed the wrongdoing and tried to minimise its compensation, according to The Australian.

Shares up on open

Aussie shares have inched higher at open, despite US stocks closing down on Wall Street.

“The local market is likely to trade near yesterday’s close in early trade even though US markets finished a little lower,” said Ric Spooner, chief market analyst at CMC Markets.

“A strong iron ore price in China yesterday should support the resource sector. Generally healthy US economic data and early signs of markets winding back the risk premium for Iraq are likely to set the scene for a benign start to early trading.”

The S&P/ASX200 benchmark was down 21.1 points to 5468.2 points at 11:45 AEST. On Thursday, the Dow Jones closed down 0.13%, dipping 21.38 points 16,846.1 points.