Friday, October 28, 2011

Tycoon James Packer defends his gaming interests and attacks the personal nature of the pokies debate

James Packer is known to be media shy but like his late father Kerry, he comes out fighting when his interests are under attack.

The gambling tycoon defended his business interests in this rare interview with 3AW's Neil Mitchell.

Qantas boss stays the course as unions vow to fight on

Qantas chief executive Alan Joyce has used the airline's annual general meeting in Sydney to warn unions he will not give in to their demands.

But as anticipated, the airline's board faced tough questions from angry shareholders and union representatives.

I spoke with Alan Joyce on AM a few hours before he faced a fiery annual meeting.

My colleague Emily Bourke attended the meeting and outlined the issues and the raw emotions when she spoke to The World Today.

A pay rise for Mr Joyce was approved in a vote amid jeers from small shareholders, union representatives and the airline's pilots.

Angry investors demanded to know why Mr Joyce and the company's executive directors deserved a pay rise.

The Australian Shareholders' Association calculated that in the last five years executive pay at the airline had continued to rise despite the company's share price falling 65 per cent and dividends from 36 cents to zero.

The chairman of Qantas' remuneration board, James Strong, defended the pay and denied that Mr Joyce would receive a 71 per cent pay increase.

He said it was much less than the $5 million reported.

Thursday, October 27, 2011

NAB posts record $5.21 billion annual profit after breakup with banking club. But will the "peoples' bank" pass on rate cut if RBA acts on Melbourne Cup Day?

The National Australia Bank has posted a record full-year net profit of $5.21 billion after strong gains in its personal and business banking divisions.

The 23.6 per cent improvement in the year to 30 September comes two years after the NAB announced a campaign to split with its traditional "big four" rivals.

Here's my analysis of the "peoples' bank" result post divorce from the Big Four club, broadcast on The World Today.

NAB remains Australia’s fourth biggest bank by market capitalisation, behind the Commonwealth, Westpac and ANZ.

The bank’s preferred measure of cash earnings also set a new record of $5.46 billion for the year, up 19.2 per cent.

In addition to a 5.7 per cent increase in revenue driven by business and personal banking, NAB’s charges for bad and doubtful debts was down $441 million to $1.81 billion.

The bank’s mortgage book also improved, growing at more than three times the rate of the banking industry.

Despite this NAB chief executive Cameron Clyne would not commit to passing on an official interest rate cut if the Reserve Bank of Australia decided to cut official interest rates next week.

"We don't give a forward looking view on interest rates or speculate on what the Reserve Bank might do," he said.

Wednesday, October 26, 2011

Soft inflation result heightens chance of Melbourne Cup rate cut

An interest rate cut on Melbourne Cup day is shaping up as a slightly safer bet after the official reading of inflation came in softer than expected.

Listen to my analysis broadcast on The World Today.

The all important figure for underlying inflation came in lower than economists had forecast at 0.3 percent in the September quarter.

One of the Reserve Bank's preferred measures, the trimmed mean, came in at an annualised 2.3 percent, close to the bottom of the RBA's target band.

According to the ABS, headline consumer inflation was in line with forecasts, posting a 0.6 percent increase in the quarter and 3.5 percent over the year.

Read the statement from the Australian Bureau of Statistics.

When the RBA board meets next Tuesday the option of a 0.25 percent cut to 4.5 percent will be at the top of the agenda.

Apart from inflation, the Board will reassess the deepening debt crisis in Europe which could be at a dangerous new level if Eurozone leaders are unable to agree on a comprehensive solution.

Tuesday, October 25, 2011

RBA inflation hawk Battellino signals chance of rate cut on Melbourne Cup Day but warns coming mining boom needs to be managed

The Reserve Bank has signalled once again that tomorrow's official inflation result could be the trigger for an interest rate cut on Melbourne Cup Day.

The RBA's deputy governor Ric Battellino says the recent updated outlook makes inflation less concerning while the debt crisis in Europe remains the big global fear.

But Mr Battelino has warned the central bank is still on inflation watch as it waits for the pressures from the next mining boom to hit.

Read Ric Battellino's speech delivered in Sydney this morning.

Read my story on ABC News Online and listen to my analysis of Mr Battellino's comments broadcast on The World Today.

Here's the RBA's cash rate target going back to January 1990.

Mr Battellino, like all economists, will be anticipating tomorrow's consumer inflation data from the ABS to determine whether there is a case to cut the cash rate to 4.5 percent or to sit back and wait for more information.

Most economists believe inflation for the September quarter will be noticably lower. But the Reserve Bank but will need to see underlying inflation at or below 0.6 percent on the quarter or 2.6 percent year on year.

But Mr Battellino, who is regarded as an inflation hawk, says he does see inflation as "less concerning".

On the world's biggest worry - the debt crisis in Europe - he believes it is possible that the global economy could take a sharp turn for the worse, making the point that the situation in Europe is "particularly disturbing".

However, Mr Battellino said recent economic data has been better than expected given that the jobless rate for September unexpectedly fell from 5.3 to 5.2 percent.


Depression fears grow as Europe debt crisis deepens; Towers Watson puts the D word at the top of its fifteen extreme global risks

The almost daily indecision on how to solve Europe's debt crisis and the growing hostility between some Eurozone leaders now has some economists talking openly about a Depression.

The global pension fund advisor Towers Watson has put a Depression sparked by Europe at the top of the fifteen risks confronting the world.

The second biggest risk is catastrophic debt default by a major developed economy, a banking crisis and a breakup of the single Euro currenency.

I spoke with Towers Watson's head of global investment Roger Urwin on this morning's edition of AM.

Read the Towers Watson report which outlines the entire fifteen risks here.