Tag Archives: losses

Shares unlikely to recover yesterday’s losses today

By finance reporter Rebecca HyamUpdated February 22, 2013 09:25:37

The Australian share market looks unlikely to bounce back straight after yesterday’s big fall, with more weak leads from overseas.

Signs of further weakness in Europe and lingering concerns about the latest US Federal Reserve minutes have hurt global share markets overnight.

A report on the euro area’s economy signalled the region is struggling to recover from a recession.

In the US, the Fed minutes released yesterday showed policy makers think the central bank should be ready to vary the pace of its $US85 billion in monthly bond purchases, fuelling concern stimulus will be curtailed.

In official economic news, US data showed jobless claims rose more than forecast, with applications for unemployment benefits rising by 20,000 last week to 362,000.

A separate report revealed Philadelphia-area manufacturing has shrunk unexpectedly.

The Dow Jones Industrial Average closed down 47 points to 13,881, the S&P 500 Index fell 0.6 per cent to 1,502, and the Nasdaq gave up 33 points, or just over 1 per cent, to 3,131.

Across the Atlantic, UK insurance firm Aviva recovered some of its losses from the previous session.

However, losses among mining stocks weighed on the broader market and, by the close, London’s FTSE 100 Index had fallen 104 points, or 1.6 per cent, to 6,291.

It is set to be a flat start on the Australian share market after yesterday’s 2.3 per cent slide, and in futures trading the Share Price Index 200 was down 6 points to 4,961.

The Australian dollar was also weak, and was worth 102.4 US cents around 9:00am (AEDT).

West Texas crude oil eased to $US92.85 a barrel, Tapis was also weaker at $US120.06.

However, spot gold was fighting back from recent weakness, trading at $US1,577 an ounce.

Topics: business-economics-and-finance, markets, currency, futures, stockmarket, australia, united-kingdom, united-states

First posted February 22, 2013 09:24:28

Banks help market claw back losses

Posted February 22, 2013 18:32:46

The local share market closed higher today in a broad-based rebound that clawed back some of yesterday’s big losses.

The All Ordinaries closed up 0.75 per cent to 5,038 after rising as much as 1.5 per cent midway through trade. The ASX 200 closed up 38 points to 5,018.

The banks led the gains, with Westpac ending up 1.3 per cent, taking back some of yesterday’s sharp losses.

The major mining stocks were not so lucky, with BHP Billiton and Rio Tinto going into retreat late in trade. Both finished close to 0.9 per cent down.

There was another slew of results out today, with Billabong one of the worst.

Its shares dropped 5.5 per cent after the company reported a $500 million loss for the half-year and cut its forecast for its annual result.

The surfwear maker blamed write-downs in the value of its assets.

Rising development costs dragged down profits at Australia’s major oil and gas producer, Santos.

The company reported a 31 per cent slide in full year profit to $519 million.

But shares rose 1.2 per cent as investors focused on the increase in cash profit and the relatively positive outlook.

Crown Casino also opened its books today and blamed its slide in half-year profits on a change of gaming laws and poor consumer sentiment in Victoria.

From July last year Victoria banned ATMs from operating within licensed gaming venues.

Crown’s profits dropped 34 per cent to $180.8 million.

The Australian dollar rose almost a cent today, buoyed Reserve Bank governor Glenn Stevens’ upbeat assessment of the economy during testimony before the House Economics Committee in Canberra.

Shortly before 5:00pm (AEDT) it was buying 103.2 US cents, 78 euro cents, 67.4 British pence and 96.1 Japanese yen.

West Texas crude recovered to $US93 a barrel, Tapis dropped to $US119 and spot gold was at $US1,586 an ounce.

Topics: banking, business-economics-and-finance, markets, australia

Telstra confirms mass Sensis job losses

Updated February 21, 2013 15:54:14

Telstra has confirmed it will slash around 650 jobs from its directory business, Sensis.

The company says the restructure will see the creation of a digital customer management centre with around 50 staff, but is likely to result in an overall loss of about 648 jobs out of the 3,500 staff currently employed by Sensis.

The cuts will include 312 staff from Melbourne and 248 from Sydney, with the remaining 38 spread across Adelaide, Perth, Brisbane and Hobart.

Telstra says around 391 of those jobs are likely to be outsourced, with union representatives saying they have been hearing from Sensis staff that some or all of those outsourced positions may be moved offshore.

Telstra’s Nicole McKechnie says it is possible that at least some of the outsourced roles could be performed offshore.

“Potentially they could be outsourced to suppliers in the Philippines and India, some of whom are already providing directory services to businesses around the world and can provide an expanded range of services, including 24/7 capabilities,” she said.

Michael Tull from the CPSU says workers should be relocated within the company.

“Telstra is an enormous corporation. They’ve just posted a record $1.6 billion half-year profit,” he said.

The move comes as part of a restructure to move Sensis from its traditional print-based directory model towards digital advertising online.

“Until now we have been operating with an outdated print-based model – this is no longer sustainable for us,” said Sensis managing director John Allan.

“As we have made clear in the past, we will continue to produce Yellow and White Pages books to meet the needs of customers and advertisers who rely on the printed directories, but our future is online and mobile where the vast majority of search and directory business takes place.”

Sensis says it is consulting with staff and unions about the proposed job cuts and restructuring.

There had been reports of likely job losses before Telstra officially confirmed them shortly after 11am (AEDT).

Earlier this morning, Prime Minister Julia Gillard responded to those reports on DMG Radio in Adelaide.

“That’s dreadful news, really dreadful news, particularly for the staff members who are hearing that today,” she said.

“It’s always incredibly tough when someone loses a job. That’s why we do so much to try and make sure that there are job opportunities in our nation, because you need a job to build a life for you and your family.”

Topics: business-economics-and-finance, telecommunications, unemployment, work, australia

First posted February 21, 2013 11:31:52

Obama warns ‘cuts mean job losses’

President Obama said Republicans would rather impose cuts than close a “single tax loophole”

US President Barack Obama has warned Congress “people will lose their jobs” if deep budget cuts are allowed to take effect next week.

Mr Obama said $85bn (£55bn) in cuts was a harmful, “meat-cleaver approach” to deficit reduction, as he stood with emergency workers at the White House.

He also offered targeted spending cuts, supporting a proposal similar to that outlined by Senate Democrats last week.

Mr Obama has just returned from a three-day golf trip in Florida.

Fresh from his weekend round of golf with Tiger Woods, the president said: “These cuts are not smart, they are not fair, they will hurt the economy. This is not an abstraction. People will lose their jobs.”

‘Blocking tax reform’

The president added that the effect of the so-called sequester, as the raft of budget cuts are known in Washington DC, was already being felt in some government departments, noting the Navy had delayed the deployment of a carrier to the Gulf.

“Changes like this, not well thought through, not phased in properly, changes like this affect our ability to respond to threats in unstable parts of the world,” Mr Obama said.

He also said that while he was open to cutting back on unsuccessful or unnecessary government programmes, he accused Republicans of “ideological rigidity” for opposing tax increases.

He proposed closing some tax loopholes to increase revenue, and backed a budget plan put together by Senate Democrats last week.

Mr Obama said the deep, across-the-board spending cuts had originally been designed to be so unattractive that they would spur politicians to work together.

Congressional Republicans have given a frosty reception to the Senate Democrats’ proposal.

They point out that Mr Obama already won a revenue increase in the new year, when Congress allowed taxes to rise on families making more than $450,000 annually.

In response to the president’s remarks, House Speaker John Boehner said: “The American people understand that the revenue debate is now closed.

“Tax reform is a once-in-a generation opportunity to boost job creation in America. It should not be squandered to enable more Washington spending. Spending is the problem, spending must be the focus,” he said in a statement.

Congress is in recess this week, leaving little time to negotiate a budget solution ahead of the 1 March deadline.

Senate plan

Democrats have suggested increasing revenues by closing some tax loopholes, including tax breaks for the oil and natural gas industry, for businesses that have outsourced labour from the US, and ensuring millionaires pay a tax rate of at least 30%.

The Democratic plan does not include any changes to costly federal programmes such as the Medicare healthcare programme for over-65s and the Social Security pension programme.

Many Republicans have supported closing some loopholes, but they say the changes should be part of a broader overhaul of the tax code, not a way to plug gaps in the budget.

The “sequester” was originally due to take effect on 1 January, along with a series of other measures known as the fiscal cliff.

But, amid dire warnings that the package of across-the-board spending cuts and tax increases could tip the US back into recession, lawmakers pushed back the spending cuts by two months, saying the delay would give them time to shape a larger budget deal.

Little progress on such a plan has been seen in recent weeks.

Also on Tuesday, a bipartisan proposal from the co-chairs of a deficit-reduction committee recommended the government find savings of $2.4tn over the next 10 years.

The proposal from former Republican Senator Alan Simpson and Democrat Erskine Bowles, President Bill Clinton’s former chief of staff, suggests taking about a quarter of savings from changes to healthcare programmes and another quarter from new revenue from tax changes.

They have said the mandatory cuts are too steep and would damage the economy.

G4S Olympic losses increase to £70m

About 3,500 extra troops had to be deployed during the Games G4S, the firm that failed to provide enough security guards for the London 2012 Olympics, has struck a compensation deal with the Games’ organising committee, Locog.

The firm will now incur losses on the Olympics contract of about £70m – up from a previous estimate of £50m.

G4S chief Nick Buckles said he was “pleased” to have concluded talks.

He added that “the overall cost to the taxpayer has been reduced significantly against the planned cost”.

The company said that the main difference between this deal and the previous one was an agreement to waive a larger proportion of the project management charge.

G4S came under severe criticism ahead of the Games, when it emerged that it had failed to recruit and train enough of the guards it had promised for the event.

The government was forced to turn to the military to provide extra staff.

G4S also said it had incurred extra costs of about £11m “relating to charitable donations and external fees” and £7m relating to sponsorship and marketing costs.

“Whilst we are extremely disappointed to find ourselves in this position, we are pleased to have concluded these negotiations with Locog,” said Mr Buckles.

“We have accepted responsibility for the security workforce issues and, as a result of the settlement terms which we have announced today, have ensured that the overall cost to the taxpayer has been reduced significantly against the planned cost.”

Sony shares slump after losses

 Sony shares had rallied in January Shares in Japanese electronics maker Sony have slumped 10% after investors responded to the firm’s results.

It was Sony’s biggest share price fall in years. The company was the second-most traded stock on the Nikkei index.

After the close of market trading on Thursday, the firm had reported losses for the October-December period of 10.8bn yen ($115m; £73m).

The maker of the Playstation and Bravia TV has lost money for the past four years.

The latest quarterly figures brought total losses in the nine months to the end of December to 50.9bn yen, a 75% fall on the previous nine months. Sony made record losses of 557bn yen for the whole of 2011 financial year

Sony’s share price had seen a strong performance in January – rallying 42% – caught up with investor enthusiasm over a weaker yen.

The company is Japan’s largest exporter so it benefits from a weaker currency because that makes its goods cheaper overseas.

“The company’s stock has been bought because of a weakening yen, but unless it can show that its top line is also growing, it does not look very attractive,” said Hajime Nakajima from Iwai Cosmo Securities.

Losses narrow at online grocer Ocado

 Sales were up more than 11% last year Online supermarket Ocado has seen its losses narrow, thanks to increasing sales.

The company reported a loss of £600,000 in 2012 – down from £2.4m in 2011. Sales rose 11.4% to £716m – with a record week in the run-up to Christmas.

It is opening a second distribution centre in Warwickshire to help it compete against its rivals. The move will create about 1,000 new jobs.

Ocado shares rose 7% in morning trading to 111p.

While the shares are up more than a quarter so far this year, they are still below the flotation price.

Ocado shares were floated in July 2010 at a price of 180p.

Partner needed? Continue reading the main story “Shopping online for groceries is clearly of increasing importance to customers. ” said chief executive Tim Steiner.

“In 2013, we will continue to improve the attractiveness of Ocado to customers and we shall substantially increase our capacity with the opening of our second fulfilment centre.”

Matt Piner from the retail research agency Conlumino said that while the company had made impressive progress so far, it was hard to see it continuing to do so alone.

“There is no doubt that Ocado is a progressive, forward-looking business. However, it is difficult to see how it can continue to improve sufficiently without some sort of partnership with a bigger competitor. “

Ocado was set up in 2000 by three former Goldman Sachs bankers and has yet to make a pre-tax profit. Last month, the former Marks and Spencer boss, Sir Stuart Rose, was appointed as chairman.

Struggling Sony slashes losses

  The success of Skyfall, staring Daniel Craig, helped keep Sony’s film division in profit Signs that Sony’s recovery plan may be working came with news that the struggling electronics group has cut its quarterly losses.

Net losses for the October-December period fell to 10.8bn yen ($115m; £73m), from 159bn yen for the quarter in 2011, with sales up 6% to 1.9bn yen.

The maker of the Playstation games console and Bravia televisions has lost money for the past four years.

Sony has faced tough competition, plus a high yen that makes exports dearer.

The latest quarterly figures brought total losses in the nine months to end-December to 50.9bn yen, a 75% fall on the previous nine months. Sony made record losses of 557bn yen for the whole of 2011 financial year.

The news saw Sony’s shares rise 2.5%.

Sony’s film division made a profit, thanks to the success of movies such as Skyfall and Hotel Transylvania. The music division also made a profit. However, the TV division made a loss – and has done for several years.

‘Wow’ products

Sony’s statement confirmed a previous forecast that the company should return to profit for the financial year to end-March.

Kazuo Hirai, who took over as president nine months ago, has promised to deliver a new range of “wow” products in order to re-establish Sony as the premier electronics and entertainment company.

Sony says on the its own website that it “is reinventing itself to deliver new and exciting experiences”. New mobile devices, cameras and interconnected gadgetry are in the pipeline.

There is speculation that the company will soon announce its new-generation Playstation 4 console.

Sony’s problems have been echoed throughout Japan’s electronics industry. Last week, Panasonic and Sharp announced huge losses, and warned of more to come.

Fierce competition from the likes of Samsung, a strong currency – although there are signs the yen in weakening – and strategic mistakes, have undermined the country’s global leadership in electronics.

The industry has also been hurt by a Chinese consumer boycott of Japanese brands stemming from a territorial dispute between Beijing and Tokyo.

PM blames State for hospital job losses

Melbourne’s Royal Children’s Hospital is blaming Federal budget cuts for the loss of 50 jobs.

The hospital says it has lost $3.6 million in Federal funding this financial year as part of the Commonwealth’s revised contribution to Victoria’s health budget.

Twelve staff were made redundant this week and another 38 will go.

Half of the losses would come from existing vacancies not being filled and the remainder would be redundancies and redeployment

But the Prime Minister Julia Gillard is blaming the State Government.

“Our funding is going up $900 million,” she said.

“The Victorian Government’s funding is going down by more than $600 million.

“Of course Premier Baillieu is desperate to get away from political responsibility for that $600 million cut, so he has been representing to hospitals that somehow this is all about the Federal Government.”

Ms Gillard says the Federal Government is giving Victoria more money for health than it’s ever given before.

I’m happy to be judged by increasing Victorian funding for hospitals and health.

“I’m happy to be judged by increasing Victorian funding for hospitals and health,”

“I’m happy to be judged by making more money available to Victorian hospitals then has ever been available before,” she said.

The hospital’s Chief executive Christine Kilpatrick says the job cuts would be disruptive, but the hospital had no choice, given the unexpected budget cut.

“The positions are all non-bedside clinical roles, so there is no impact on the delivery of clinical care,” she said.

Professor Kilpatrick said a combination of measures taken since the funding cuts were announced in mid-December would save $2.5 million.

This is a difficult time for our staff, but we don’t have a choice around whether or not to act.

RCH Chief executive Christine Kilpatrick

She said the hospital treated the sickest children and those with the most complex medical conditions in the country, and it had a responsibility to keep beds open and to maintain the capacity of its emergency department.

“This is a difficult time for our staff, but we don’t have a choice around whether or not to act,” she said.

The Australian Medical Association’s Stephen Parnis says the Commonwealth and State Governments must resolve the funding issue as soon as possible.

“It does show how parlous the budgetary situation is, not only for the kids, but these decisions that are being made in every hospital executive around the State at the moment,” he said.

Last year, the Federal Government used new population data to strip Victoria of $107 in expected health funding over two financial years (2011-12/2012-13).

Topics: health, federal—state-issues, community-and-society, unemployment, business-economics-and-finance, melbourne-3000

First posted January 23, 2013 07:43:24

Ford shares down on Europe losses

Ford: “The industry will start to recover in 2014″

Shares in Ford have fallen 3.9% in early Wall Street trading on the rising cost of fixing its European business.

The US carmaker cautioned that 2013 losses in Europe would be $2bn, greater than its previous $1.5bn estimate.

The stock market reacted negatively, despite Ford reporting profits for the last three months of 2012 that beat expectations thanks to strong US sales.

Earnings after tax for the quarter were $1.6bn (£1bn), with underlying profits up 55% from the same period in 2011.

Revenues rose 5% overall, driven by a 13% rise in North America.

Ford boasted that its North American unit had enjoyed its most profitable fourth quarter and year since it first began recording the region’s performance in 2000.

The contrasting fortunes of the number two US carmaker on either side of the Atlantic reflect the broader market trends. While total US car sales hit a post-financial-crisis high last year, 2012 sales in Europe fell more than 8% from the previous year.

Ford, like many rivals, is in the process of downsizing its European business to reflect the shrinking market, with resulting losses due to redundancy payments and the write-off of the value of factories and other assets it owns in the region.

The company said these costs were turning out to be more than expected, thanks to the strength of the euro and the higher valuation of employee pension claims. It has also marginally cut its forecast for total European sales in 2013.

To add to the firm’s woes on the continent, chief financial officer Bob Shanks admitted to investors that the delayed launch of the new Mondeo in Europe would cost Ford several hundred million dollars in missed revenues.

PM blames State for hospital job losses

Melbourne’s Royal Children’s Hospital is blaming Federal budget cuts for the loss of 50 jobs.

The hospital says it has lost $3.6 million in Federal funding this financial year as part of the Commonwealth’s revised contribution to Victoria’s health budget.

Twelve staff were made redundant this week and another 38 will go.

Half of the losses would come from existing vacancies not being filled and the remainder would be redundancies and redeployment

But the Prime Minister Julia Gillard is blaming the State Government.

“Our funding is going up $900 million,” she said.

“The Victorian Government’s funding is going down by more than $600 million.

“Of course Premier Baillieu is desperate to get away from political responsibility for that $600 million cut, so he has been representing to hospitals that somehow this is all about the Federal Government.”

Ms Gillard says the Federal Government is giving Victoria more money for health than it’s ever given before.

I’m happy to be judged by increasing Victorian funding for hospitals and health.

“I’m happy to be judged by increasing Victorian funding for hospitals and health,”

“I’m happy to be judged by making more money available to Victorian hospitals then has ever been available before,” she said.

The hospital’s Chief executive Christine Kilpatrick says the job cuts would be disruptive, but the hospital had no choice, given the unexpected budget cut.

“The positions are all non-bedside clinical roles, so there is no impact on the delivery of clinical care,” she said.

Professor Kilpatrick said a combination of measures taken since the funding cuts were announced in mid-December would save $2.5 million.

This is a difficult time for our staff, but we don’t have a choice around whether or not to act.

RCH Chief executive Christine Kilpatrick

She said the hospital treated the sickest children and those with the most complex medical conditions in the country, and it had a responsibility to keep beds open and to maintain the capacity of its emergency department.

“This is a difficult time for our staff, but we don’t have a choice around whether or not to act,” she said.

The Australian Medical Association’s Stephen Parnis says the Commonwealth and State Governments must resolve the funding issue as soon as possible.

“It does show how parlous the budgetary situation is, not only for the kids, but these decisions that are being made in every hospital executive around the State at the moment,” he said.

Last year, the Federal Government used new population data to strip Victoria of $107 in expected health funding over two financial years (2011-12/2012-13).

Topics: health, federal—state-issues, community-and-society, unemployment, business-economics-and-finance, melbourne-3000

First posted January 23, 2013 07:43:24

Easyjet predicts much lower losses

Easyjet plane Easyjet is considering expanding its fleet to the disapproval of founder Sir Stelios Haji-Ioannou. Low-frills airline Easyjet made higher total revenues in the first quarter and has cut its loss forecast.

Total revenue grew 9.2% to £833m for the quarter ended 31 December, the company said in a statement.

It expects first-half pre-tax losses to fall to between £50m and £75m, compared with £112m for the same period the year before.

The number of passengers flying with the airline grew by 6.2% to 13.7m in the quarter.

Easyjet chief executive Carolyn McCall said the company “made a strong start to the year due to a combination of management action, competitor capacity reductions and the benign operating environment.”

Its “Europe by Easyjet” short-haul campaign was one reason why revenue-per-seat had grown by 3.9% in the quarter, taking into account currency fluctuations.

Continue reading the main story The airline is still under pressure from founder Sir Stelios Haji-Ioannou. Last week, he said he and his brother and sister each sold 200,000 shares in the company, taking their combined holding to just below 37%.

In an open letter to shareholders, he threatened to sell more shares in the company if it expanded its fleet any further, believing such a move would “destroy shareholder value.”

Sir Stelios has been arguing against the airline’s expansion since 2008.

As of 31 December 2012, Easyjet had 213 planes in its fleet, comprising 56 A320s and 157 A319s.

The company is considering switching to more cost-efficient 180-seater aircraft, replacing its 156-seater A319s. This would increase capacity by “3% to 5%, in line with Easyjet’s strategy of delivering sustainable growth and returns,” it said.

Delivery of next-generation aircraft would not be until after 2017, the company said.

Easyjet’s shares were up more than 5% to 899p in afternoon trading and have more than doubled over the year.

Market ends flat after mining losses

The Australian share market has finished flat, with the mining sector and telcos among the bigger losers.

The All Ordinaries Index lost three points to close at 4,443, while the ASX 200 index also fell three points to 4,717.

The big miners BHP Billiton and Rio Tinto each fell around 0.1 per cent, while Fortescue Metals Group fell 1.9 per cent.

Rio had traded close to 1 per cent lower but its share price recovered after the company released its latest quarterly update, showing better results than had been predicted.

Rio says it achieved record iron ore production and shipments from its Pilbara operations last year.

It produced 199 million tonnes of iron ore during 2012 – a 4 per cent increase on the year before.

Rio’s iron ore production for the December quarter was 52 million tonnes, 2 per cent up on the same period in 2011.

Telstra also weighed on the market as it fell 1.3 per cent.

There was a mixed performance from the big four banks, with Westpac falling 0.5 per cent and NAB 0.1 per cent, while the Commonwealth and ANZ each rose about 0.2 per cent.

Retailers were a bright spot for the market, led by a surge from surfwear company Billabong after it announced yet another takeover offer.

Billabong shares closed nearly 16 per cent higher at 98 cents after the offer from a US consortium led by private equity firm Altamont Capital Partners and VF Corporation.

Harvey Norman rallied 1.3 per cent, David Jones rose 0.1 per cent and rival Myer ended the day flat.

JB Hi-Fi was among one of the few disappointments in the retail sector and there were also overseas signs of the problems faced by shops selling hardcopy CDs and DVDs.

Global music retailer HMV announced it was suspending its shares on the London Stock Exchange and has called in Deloitte as administrators because the company’s sales were not enough to meet its debt obligations.

More than 4,000 jobs are on the line, mostly in the UK but also in Hong Kong and Singapore.

HMV’s last Australian store closed in 2010.

Shortly before 5pm (AEDT) the Australian dollar was buying around 105.52 US cents , 78.99 euro cents, 65.64 British pence and $NZ1.25.

West Texas crude oil was worth around $US94.10 a barrel and Tapis crude was selling for about $US116.60 a barrel.

Spot gold was around $US1,671.80 an ounce.

Topics: markets, business-economics-and-finance, currency, australia

Opel losses to last until at least 2014: GM boss

OpelBERLIN: The head of General Motors in Europe said Sunday that losses at its struggling German arm Opel would continue for at least two more years and possibly longer depending on market trends.

“We will be in the red in 2013 and 2014,” Steve Girsky told Focus magazine in an interview. “In 2014, hopefully a bit less. Balanced books will only be achieved in 2015 or 2016, depending on the market situation,” he added.

GM’s European operations have run up billions of dollars in losses over the past 10 years. It had planned to sell Opel at one stage but pulled back when it could not find a suitable buyer.

Battered by a declining European car market, Opel announced in December that it would halt auto production at its Bochum plant in 2016 but pledged to keep the site running as a parts distribution centre.

Opel employs 37,400 people in Europe, including 20,300 at four sites in Germany, in Ruesselsheim, Bochum, Eisenach and Kaiserslautern.

Opel boss Thomas Sedran told Focus: “We do not plan further site closures.”

Last week, he insisted that “Opel was not for sale” amid rumours of a tie-up between the German firm and struggling French group PSA Peugeot Citroen.

Copyright AFP (Agence France-Presse), 2013

Losses deepen at laundry company

7 December 2012 Last updated at 09:19 GMT folded tablecloths Fishers is more than 100 years old and has 700 workers at a number of different sites Cupar-based Fishers Group has reported bigger losses in its latest accounts from £1.8m in 2010 to £3.5m last year.

The company which rents out textiles to hotels and restaurants and launders them said it had faced “unprecedented challenges” which were mostly down to rising textile costs.

Turnover at the group rose by £2.5m to more than £32m.

Fishers Group which employs more than 700 people said its key markets “remained extremely challenging”.

It said although its healthcare and garments business remained flat the hospitality sector grew by 11%.

Founded in 1900, Fishers has six plants in Scotland and the North East of England.

Man City losses halve in 2011-12

Manchester City Manchester City won the Premier League for the first time in 2011-12 Manchester City has revealed that its financial losses for 2011-12 have halved from a year earlier.

The Premier League champions announced a pre-tax loss of £93.4m, down from £189.6m in 2010-11.

Revenues increased 51% to £231.1m, with the club’s first appearance in the Uefa Champions League contributing more than £22m in new revenue.

The club’s sponsorship deal with Etihad Airways helped commercial partnership revenue double from £48.5m to £97m.

City’s operating loss also improved from a record £194.9m to £104.1m.

Uefa’s Financial Fair Play rules, which say clubs must break even over three years, come into full effect in 2013-14.

Investment impact

City was acquired by Sheikh Mansour of Abu Dhabi in 2008. In its annual report, the club said it had undergone a “significant period of investment” since then. Over that time, it has spent about half a billion pounds on new players.

“The club’s performance in the 2011-12 reporting period demonstrates the tangible and positive impacts of that investment across many areas of our operations,” it said.

It added that its player recruitment strategy had transitioned from one of rebuilding to one of refinement.

“With a relatively young squad that has won an FA Cup and a Barclays Premier League in consecutive seasons, our recruitment needs have been reduced.

“As a result, the amortisation of player contracts and the net impact of player trading on the club’s bottom line has decreased by 27% (£30.3m) over the previous year, consistent with our belief that the peak of the club’s investment in its playing squad has passed.”

The club’s wage bill increased to £178.2m from £153.7m the previous year.

That covered 237 football players and staff and 239 commercial and administration staff.

Lew warns of job losses due to GST threshold

Updated December 04, 2012 13:41:12

One of Australia’s richest businessmen has pointed the finger at the Reserve Bank and the Federal Government for the poor condition of the retail sector.

Solomon Lew – the chairman of Premier Investments, which owns Just Jeans, Portmans and other retail chains – says the retailing environment is the toughest he has seen in 50 years.

He says that is down to a combination of poor policy and a weak global economic environment.

“Domestic cost of living pressures, flawed interest rate settings and the uncertainties associated with minority government including the absence of a predictable public policy framework,” he told shareholders at the company’s annual general meeting.

However, Mr Lew saved his biggest criticism for the Federal Government’s announcement yesterday that it will take no immediate action to lower or remove the low value threshold (LVT) that makes overseas good imported into Australia GST-free if the shipment is valued under $1,000.

“My message to the Government is that we have all run out of time,” he said.

“No Australian online business is capable of reaching its full potential while a flawed two-tiered tax system remains in place.”

Premier retail’s chief executive, Mark McInnes, says the current policy is “ridiculous” and is “hurting the economy”.

Mr McInnes says the public does not understand that Australian retailers have to pay at least 20 per cent more for their products.

“It’s 10 per cent GST and it’s 10 per cent duty, so Australian retailers have to pay 20 per cent more for their product – the same item – than online retailers are paying for overseas,” he said.

“You would change any business if you had the same item and you could buy it 20 per cent cheaper of course you’d buy it [from overseas].”

Mr Lew says official Bureau of Statistics data estimates 22,600 retail jobs have been lost while the Government conducted reviews into the LVT.

He warns further jobs are likely to be lost if action is not taken immediately to put local retailers, including online stores, on an equal footing with their overseas rivals, citing an Ernst & Young report commissioned by the National Retail Association.

“Change needs to be made right now, and if the Government needs any further proof of what’s at stake I have one word for them, and that’s jobs,” he cautioned.

“The current Federal Government will be directly responsible for 30,000 jobs lost, according to Ernst & Young, by not abolishing the low value threshold.”

Topics: business-economics-and-finance, economic-trends, retail, money-and-monetary-policy, unemployment, tax, australia

First posted December 04, 2012 13:35:26

Bond prices trim losses after US factory data

NEW YORK: Prices on US government debt pared losses early Monday after a private report suggested the US manufacturing sector contracted in November, stoking worries about economic growth.

The Institute for Supply Management said its US factory index unexpectedly fell to 49.5 in November from 51.7 in October.

A reading below 50 indicates manufacturing is contracting.

Benchmark 10-year Treasuries prices were 6/32 lower with a yield of 1.634 percent.

They were down 8/32 with a 1.642 percent yield prior to the release of the ISM data.

Copyright Reuters, 2012

Thomas Cook sees losses widen

28 November 2012 Last updated at 08:28 GMT Thomas Cook Thomas Cook has been selling off some of its assets to reduce its debts Struggling travel group Thomas Cook has reported widening annual losses due to reduced capacity and higher fuel costs.

Pre-tax losses for the year to the end of September were £485.3m, up from £398.2m the previous year.

Revenue fell to £9.5bn from £9.8bn in what the company described as a “difficult trading environment”.

Despite the loss, the company said the final quarter had been a “major improvement” on a year ago and added it was “optimistic about the future”.

“These results reflect the major issues that Thomas Cook faced last year, but they mask the material improvement that we made in the fourth quarter,” said Harriet Green, who took over as chief executive in the summer.

The company also said it had reduced its debts by more than £100m over the period, to £788m from £891m.

Lower bookings

Thomas Cook said plans to stabilise the business in the UK were now complete, with the closure of 149 shops contributing to significant cost savings and an improvement in profit margins.

Bookings in the UK during the year were down 2%, however, while they fell by 9% in west Europe and by 3% in north Europe. Bookings in Germany were up by 9%.

The company has struggled with high debt and the wider downturn in the global travel sector.

It got into particular difficulty last year when the unrest in the Middle East and North Africa affected its operations in Egypt and Tunisia.

In May this year, the group secured a £1.4bn refinancing package, giving it a further three years to repay its debts.

Coal industry warns of more job losses

Updated November 23, 2012 11:26:18

Coal industry groups are warning of further job cuts, with the sector caught off guard by continued price weakness.

The Australian Coal Association says the dramatic slump in global commodity prices, which has prompted thousands of job losses around the country, caught the industry off guard.

It is estimated more than 7,500 jobs have been lost in the sector this year, with the bulk of those in Queensland, as resources firms cut spending by closing mines and shelving projects.

The Coal Association’s chief executive Nikki Williams says, while commodity prices are cyclical, no one was prepared for the breakneck pace of the latest slump.

“What is unprecedented is the speed of the price drop and the ramp up in costs and that price crunch,” she said.

“Literally it was like going off a cliff. It just happened very quickly – a very steep decline – it was not a slowing down of the cycle which you’ve typically seen in many past cycles.”

Queensland’s Resources Council is warning of more job losses in the coal industry, with mining companies continuing to close mines and postpone projects to save money.

The Resources Council’s executive director Michael Roche has told Radio National mining firms feel things are even worse now than they were during the global financial crisis.

“It is a perfect storm because at the time of the GFC costs weren’t as high,” he said.

“So costs have got out of control in the industry, and then we’ve had the added burden of an Aussie dollar stubbornly well above parity, and then governments come along from 1 July with the carbon tax, and then from 1 October in Queensland, higher royalties.”

Topics: business-economics-and-finance, economic-trends, coal, unemployment, australia, qld

First posted November 23, 2012 10:15:04

Elders says losses getting better

Posted November 19, 2012 13:52:41

Rural services company Elders has reported a $60.6 million loss for its latest financial year.

However, it is smaller than last year’s loss of $395.4 million.

The company says its improved performance was partly due to a 15 per cent reduction in debt to $295 million.

That helped offset a further fall in sales revenue, which was down 5 per cent to just under $2.2 billion.

Elders has been selling some of its divisions to help pay down its heavy debt burden: it is continuing the sale of forestry assets; the company also says it is well advanced in the sale of Futuris Automotive; and it is preparing to sell its rural services business.

The company says, excluding one-off costs, its net profit after tax was up 47 per cent to $13.2 million in the year to September 30.

Topics: business-economics-and-finance, company-news, agribusiness, australia

Gas shortage: Fertiliser manufacturers claim losses of nearly Rs5b

Revenu­es have declin­ed 31%, profit­abilit­y by a whoppi­ng 139%.  Total urea produced by SNGPL-based plants in the first nine months of 2011 stood at 564,000 tons, which has declined 60% to 226,000 tons in the same period of 2012. PHOTO: FILE

LAHORE: In the first nine months of 2012, Sui Northern Gas Pipelines (SNGPL)-based plants, which include Agritech, DH Fertilizers, Pakarab, Engro’s new EnVen plant, as well as Sui Southern Gas Company (SSGC)-based Fauji Fertilizer Bin Qasim lost profitability by 139% and incurred a collective loss of Rs4.8 billion.

The same manufacturers had recorded a collective profit of Rs12.3 billion in the first nine months of 2011, says a release issued by the Fertiliser Manufacturers Pakistan Advisory Council (FMPAC) here on Tuesday.

During the period under review, all SNGPL-based plants and SSGC-based FFBL faced a 31% loss in revenue compared with the same period of 2011. They collectively generated total revenues of Rs44.5 billion in the first nine months of 2012, as compared to last year’s Rs64.3 billion.

During the timeframe, all SNGPL-based plants collectively suffered a loss of revenue of Rs10.1 billion, compared to the same period of 2011, due to gas curtailment and lower urea sales. Total urea sales by SNGPL-based plants stood at 216,000 tons, which is 346,000 tons less than the 562,000 tons of urea sold in the first nine months of 2011, indicating a 62% volumetric decline in sales.

Total urea produced by SNGPL-based plants in the first nine months of 2011 stood at 564,000 tons, which has declined 60% to 226,000 tons in the same period of 2012. SNGPL-based plants have operated at only 13% of installed capacity in 2012, as compared to 33% last year.

According to a FMPAC official, SNGPL-based plants are facing the worst-ever crisis in their history. Gas outages went in excess of an unprecedented 200 days in the first nine months of the calendar year. The official said that despite an investment of over $2.3 billion in new production capacity, the country is sitting on idle urea capacity of 2.7 million tons.

Fertiliser sector officials warned that if the same level of gas curtailment continues during 2013, SNGPL-based fertiliser plants will be forced to shut down permanently – resulting in the layoff of highly-skilled manpower. They also warned that the exchequer will feel the pressure once it is forced to import urea to meet the shortfall in the country.

“It is not just fertiliser plants that will face the brunt of industry closure: the whole farmers’ community as well as the government would be the ultimate losers if fertiliser plants are shut down,” an official claimed..

He said the government needs to support the fertiliser industry to ensure the supply of cheap local urea to farmers.

Published in The Express Tribune, November 21st, 2012.

View the original article here

US 10-year notes nurse losses, eyes on fiscal cliff

SINGAPORE: US 10-year Treasuries struggled to regain ground in Asia on Wednesday after retreating the previous day on optimism that lawmakers will reach a deal to avoid a fiscal crisis that could dent economic growth.

Ten-year notes held steady in price with a yield of about 1.668 percent. The 10-year yield had hit a two-month low of 1.556 percent last Friday, but has risen since then.

Treasuries have come under pressure this week after leading US legislators expressed confidence on Sunday that they could reach a deal to avert the “fiscal cliff” of spending cuts and tax hikes due to take effect in early 2013.

Data showing that US housing starts rose to their highest rate in more than four years in October added to a sell-off in Treasuries on Tuesday, when the 10-year yield rose about 5 basis points.

Market positioning at this point does not seem tilted too heavily toward being long Treasuries, suggesting that the potential for any long liquidation and further weakness in Treasuries might be limited in the near-term, said a trader for a US brokerage in Tokyo.

“I don’t think that dips from here will become that big,” the trader said.

Copyright Reuters, 2012

Elders says losses getting better

Posted November 19, 2012 13:52:41

Rural services company Elders has reported a $60.6 million loss for its latest financial year.

However, it is smaller than last year’s loss of $395.4 million.

The company says its improved performance was partly due to a 15 per cent reduction in debt to $295 million.

That helped offset a further fall in sales revenue, which was down 5 per cent to just under $2.2 billion.

Elders has been selling some of its divisions to help pay down its heavy debt burden: it is continuing the sale of forestry assets; the company also says it is well advanced in the sale of Futuris Automotive; and it is preparing to sell its rural services business.

The company says, excluding one-off costs, its net profit after tax was up 47 per cent to $13.2 million in the year to September 30.

Topics: business-economics-and-finance, company-news, agribusiness, australia

Japanese bank balance sheets saddled with heavy equity losses

Tokyo:- Japan’s three mega banks posted earnings that were dragged down by heavy losses on their equity portfolios, renewing investor concerns about the practice of lenders holding stakes in clients including the country’s money-losing electronics makers.

Combined stock-related losses at Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group and Sumitomo Mitsui Financial Group (SMFG) more than tripled in April-September from a year earlier as the benchmark Nikkei average declined 12 per cent over the six-month period.

Shares in embattled Sharp Corp have plunged nearly 70 per cent since the start of the fiscal year as the firm struggled with competitive markets and a strong yen. Yet in September, MUFG and Mizuho, which hold stakes in the troubled TV maker, agreed to extend 360 billion yen in additional loans to the 100-year-old debt-ridden company.

“Although banks say they will make further reductions in stock holdings, they are unlikely to drastically cut their exposure in the short term as it’s hard to sell stocks in this market,” Chikako Horiuchi, director at Fitch Ratings in Hong Kong, said before the earnings announcements on Wednesday. “So, their challenge is to come up with effective hedge measures.”

Article continues below

While banks are bound by law to limit their holdings to small stakes of under 5 per cent, they have a large number of holdings across many industries. That exposes them to the ups and downs in the Japanese economy, which shrank in the September quarter for the first time since last year.

Panasonic Corp is axing another 10,000 jobs by end-March as its businesses continue to bleed money and its shares languish at multidecade lows. Still, Japan’s biggest commercial employer managed to win $7.6 billion in loan commitments last month from banks that include MUFG and SMFG.

Total stock-related losses at Mizuho, MUFG and SMFG widened to 534.1 billion yen ($6.72 billion) in the fiscal first half from 169.5 billion yen a year ago, their earnings reports show.

“We have been continuously reducing equity holding. It’s a shame that we had to book such large (stock-related losses),” Mizuho President Yasuhiro Sato said at a news briefing. “It’s hard to find ways to sell clients’ shares without affecting our business with them.”

In the quarter ended September, Mizuho’s net income plunged 99.8 per cent to 356 million yen, while MUFG, Japan’s biggest bank by assets, saw a 45 per cent slump to 107.6 billion yen.

SMFG booked a profit increase of 99 per cent to 213.2 billion yen, helped by investment gains from the trading of government bonds.

Japan’s big banks have shed billions of dollars of equity holdings in the past decade to reduce their exposure to stock market volatility. While the banks say publicly they will make further cuts in their holdings, some executives privately acknowledge they are slow in coming.

Outstanding loans by Japan’s big banks fell for a 36th straight month in October, Bank of Japan data shows, after the country’s economy shrank in July-September.

To counter a poor domestic loan book, SMFG, Mizuho and MUFG have aggressively expanded overseas, and their efforts are starting to pay off. The banks’ overseas lending showed strong growth in the first six months.

Earlier this year, SMFG acquired Royal Bank of Scotland’s

aircraft leasing business for $7.3 billion.

In June, Mizuho said it had agreed to buy a Brazilian unit of Germany’s WestLB.

Shares of Mizuho have climbed some 17 per cent this year, while SMFG is up 10.5 per cent and MUFG is 5.5 per cent higher.

The three lenders have so far outperformed a 2.5 per cent gain in the benchmark Nikkei average

Japanese banks also dominate global project finance, with MUFG ranking No.1 in the league table of mandated arrangers for January-September, Thomson Reuters data shows. SMFG and Mizuho held the No.3 and No.4 spots, respectively.

Hills flags job losses from restructuring

Updated November 02, 2012 09:16:35

Hills Holdings says a significant number of jobs are to go as it restructures the business, but it has not specified how many.

The company says it will consolidate and close some plants, including at its Orrcon and Fielders steel operations.

Hills also plans to stop making its solar hot-water range of products.

The company says it will record up to $110 million of write-downs and impairments.

It has described markets as challenging and says its earnings potential for the short term is lower.

Hills says its growth plans will focus on technology and communications and it will strengthen its home and hardware offerings.

The company has taken aim at the Federal Government for a lack of support.

CEO Ted Pretty said Hills missed out on the Government’s $300 million steel transformation plan, which aimed to encourage investment in steel manufacturing.

“The downstream guys get put under pressure, the big guys get the cheques and we’ve got to actually think a bit more about the structure of the Australian economy, which is it’s largely medium to small business and that’s where they need the support,” he said.

Topics: manufacturing, company-news, industry, business-economics-and-finance, sa, adelaide-5000, australia

First posted November 01, 2012 14:29:01

Councils to recoup GFC losses after court ruling

Updated November 05, 2012 20:07:55

Ratings agency Standard and Poor’s says it will appeal against a landmark ruling which will allow 13 local councils to recoup losses they suffered during the 2008 financial crisis.

The New South Wales councils, including Bathurst and Corowa, brought a class action against S&P, investment bank ABN AMRO and Local Government Financial Services (LGFS).

The councils claimed they were misled into losing almost $16 million in the financial crisis, saying S&P led them to buy complex investments called constant proportion debt obligation notes (CDPOs), which the agency had given a AAA rating.

Today’s ruling found that rating was misleading and deceptive.

Federal Court Justice Jayne Jagot described the ABN AMRO products as “grotesquely complicated” and said that the LGFS breached its fiduciary duty to the councils by not properly investigating the products.

She said S&P had been “sandbagged” while ABN AMRO “simply bulldozed the rating through”.

The three financial agencies have each been ordered to pay one-third of the amount lost by the councils, plus interest.

That means the councils will recoup about $30 million.

Piper Alderman partner Amanda Banton, who represented 12 of the 13 councils taking action, said the decision was a major blow for ratings agencies.

“No longer will rating agencies be able to hide behind disclaimers to absolve themselves from liability,” she said in a statement.

But in a statement, S&P says it is disappointed with the court’s decision and intends to appeal.

Claimants and their losses: Bathurst Regional Council: $1 millionCooma Monaro Shire Council: $1.86mCorowa Shire Council: $933,225Deniliquin Council: $466,613Eurobodalla Shire Council: $466,612Moree Plains Shire Council: $1.9mMurray Shire Council: $933,225Narrandera Shire Council: $1.86mNarromine Shire Council: $466,612Oberon Council: $933,225Orange City Council: $1.4mParkes Shire Council: $2.8mCity of Ryde: $933,225

“We reject any suggestion our opinions were inappropriate, and we will appeal the Australian ruling, which relates to a specific CPDO rating,” the statement read.

Class action funder IMF Australia says the ruling is likely to have global ramifications, particularly in Europe where more than $2 billion worth of CDPOs were issued.

“This has been a long time coming,” IMF executive director John Walker told The World Today.

“It not only involves or assists people in New South Wales, it also potentially can be relied upon by people around the world.

“It fundamentally arose by rating agencies and investment banks looking after their own interests and potentially being a material cause of the global financial crisis. I don’t say that lightly.

“So much of these synthetic derivatives created huge credit risks outside regulated markets that were really outside the control of our regulators.”

He says his organisation is looking into funding further litigation in Australia, New Zealand, The Netherlands and the UK.

“Here we have Standard and Poor’s, which is a live breathing ratings agency that has a business that everybody in the financial markets relies upon. And we’re looking to sue Standard and Poor’s in those four jurisdictions,” he said.

City of Ryde spokesman Roy Newsome says he is delighted with the ruling.

“Parties that we relied upon for their advice and their due diligence obviously didn’t prove to be correct,” he said.

Les Finn from Parkes Shire Council says they can now move forward.

“We’ll be able to shift our focus now onto getting some services back on the ground, rather than servicing debt,” he said.

The ruling follows another in September against the now collapsed Lehman Brothers, which was found to have breached legal duties when it sold toxic derivatives to a group of charities, councils and church groups who collectively lost about $250 million.

Topics: courts-and-trials, local-government, international-financial-institutions, nsw

First posted November 05, 2012 10:13:20

Asian markets bounce back after recent losses

HONG KONG: Asian shares rose Wednesday as a Greek debt sale soothed fears over the country’s future and as dealers picked up bargains after a recent sell-off fuelled by concerns over the US fiscal cliff.

The euro, which sank to a two-month low against the dollar in Europe on Tuesday, edged up against the greenback and yen as a little confidence returned to the market.Tokyo ended flat, edging up 3.68 points to 8,664.73, Sydney gained 0.20 percent, or 8.60 points, to 4,388.4 and Seoul rose 0.23 percent, or 4.34 points, to 1,894.04.

Hong Kong climbed 1.20 percent, or 253.34 points, to 21,441.99 and Shanghai rose 0.37 percent, or 7.53 points, to 2,055.42.Regional markets have suffered big losses since last week’s re-election of US President Barack Obama, with dealers fearing a stand-off in Congress in addressing the fiscal cliff of tax hikes and spending cuts that are due to come in on January 1.

If a deal is not brokered in Washington the package, drawn up during fraught spending cap talks last year, will most likely tip the world’s biggest economy back into recession.Adding to the selling pressure is uncertainty over Greece after European finance chiefs put off for a week a decision on granting Athens the latest installment of a multi-billion-euro bailout.

And in Germany a survey showed investor confidence had worsened in November as the region’s crisis began to drag on its biggest economy.

However, there was some good news for Greece with the threat of a default this week receding after it raised 4.0 billion euros ($5.1 billion) in short-term bond auctions, which should help plug a financing gap left by the stalled loan.

In forex trading the euro — which touched a two-month low of $1.2662 in London — bought $1.2732 in afternoon Asian trade from $1.2703 late Tuesday in New York.

The European single unit also rose to 101.77 yen from 100.85 yen, while the dollar firmed to 79.92 yen from 79.38 yen.

On Japan’s Nikkei, troubled electronics firm Sharp surged on news reports that it is in final talks with chip giant Intel over a possible $500 million cash injection by the US firm.

In China eyes were on the Communist Party’s latest congress which ended Wednesday after approving its next leadership — to be announced Thursday — with investors hoping for an indication of future economic policy.

“Once that’s known it will set the tone a bit. If there is a reform-minded set-up then that give Chinese markets some support,” Lorraine Tan, vice president of research Asia at S&P Capital IQ in Singapore, told Dow Jones Newswires.

Wall Street finished in the red Tuesday. The Dow dropped 0.46 percent, the S&P 500 fell 0.40 percent and the Nasdaq lost 0.70 percent.

Oil prices were higher. New York’s main contract, light sweet crude for December delivery was up 17 cents to $85.55 a barrel in afternoon trade and Brent North Sea crude for delivery in December added seven cents to $108.33.

Gold was at $1,727.30 by 0820 GMT compared with $1,726.30 late Tuesday.

In other markets: Taipei rose 0.33 percent, or 23.70 points, to 7,159.75.

Smartphone maker HTC climbed 4.0 percent to Tw$234.0 while TSMC was 0.22 percent higher at Tw$90.5.

Manila ended flat, dipping 4.83 points to 5,451.09.

SM Investments fell 0.49 percent to 814 pesos and Alliance Global rose 0.8 percent to 15.12 pesos.

Wellington closed 0.38 percent, or 14.99 points, lower at 3,955.56.

Telecom was down 0.84 percent at NZ$2.375, Fletcher Building was off 0.94 percent at NZ$734 and Contact Energy was flat at NZ$5.27.Mumbai was closed for a public holiday.

Local market ends down after resource losses

Posted November 12, 2012 18:14:47

The local share market edged lower in late trade to close down around a third of a per cent, with resource and energy stocks leading the falls.

The All Ordinaries lost 13 points to 4,470, while the ASX 200 gave back 14 points to close at 4,448.

The resources sector was a drag on the market; BHP Billiton gave up close to 0.5 per cent, but falls were only very slight for Rio Tinto, while Fortescue added 3 per cent after iron ore prices pushed higher.

Shares in insurer QBE slumped after the company revealed superstorm Sandy in the US could cost it just under $500 million.

The insurer has as a result cut its insurance profit margin forecast from 12 to 8 per cent, but says it still expects an improvement in full-year profit.

Shares in the company dropped around 14 per cent on the initial announcement, but by the close were off 8 per cent.

Industrial stocks Incitec Pivot and Orica both lost over 3 per cent on the back of disappointing earnings.

The big banks were mixed; the Commonwealth added 1 per cent while ANZ and NAB lost around 0.5 per cent.

There was little economic data out today except housing finance figures, which showed a glimmer of recovery in the housing market.

Official figures show an almost 1 per cent rise in the number of owner-occupier loans approved in September, while the value of loans approved for investors jumped by 8.6 per cent.

The figures provide evidence the housing sector is beginning to respond to the lower interest rate environment – something the RBA has been betting on.

The Australian dollar picked up pace against the greenback throughout the day and just after 5:30pm AEDT was worth 104.2 US cents.

It was also buying 81.8 Euro cents, 65.5 British pence and 82.8 Japanese yen.

On commodity markets, West Texas crude was slightly higher, worth $US86, while Tapis was up to $US115.

Spot gold was almost flat at $US1,733 an ounce.

Topics: business-economics-and-finance, markets, stockmarket, australia

Sindh suffers over Rs500bn agricultural losses in 3 years

KARACHI: Sindh has suffered losses of more than Rs500 billion during the last three years, as floods and rains have devastated the crops and properties in the province, said an official on Tuesday.

Syed Mehmood Nawaz Shah, general secretary of Sindh Abadgar Board, said that the agriculture sector had suffered from two angles, one was natural disaster and the other was low prices.

Official estimates say that the province suffered loss to crops, animals and other properties of Rs240 billion in 2010 floods. Rains of 2011 damaged crops and properties of around Rs200 billion, while the current year’s loss is around Rs80 billion, he said. Besides natural disasters, prices of cotton and paddy this year were low, which also affected the growers’ income, said Shah.

Trade with India is also hampering Sindh agriculture as the country imported onions, tomatoes, bananas and mango from India, while it did not export any agricultural commodity. “Punjab markets are full with the Indian bananas,” he said.

Haji Shahjahan, president of Falahi Anjuman Wholesale Vegetable Market, said that the government is importing tomatoes and green chillies from India, which were abundant in Sindh. “The government’s action shows that it is suppressing growers here,” he said. Earlier, onions were also imported.

Shahjahan suggested that all such agricultural products that were available in the country should not be imported from India, as it hurts the growers. “A no objection certificate (NOC) on tomatoes and green chillies import should be cancelled,” he said.

Besides vegetables, major Kharif crops, cotton and paddy, have also suffered huge damages in Sindh and Balochistan, he said. Sindh’s paddy faces damage of around 15 percent in monsoon rains, while several growers faced losses of more than 90 percent in the affected areas, said Arif Hussain Mahesar, a grower and president of the Sindh Balochistan Rice Millers Association.

Low lying areas of paddy growing belt, where water can be stored for more than five days, faced heavy damages, while the majority areas were still safe, as paddy was mature by the time of the rain, he said.

Dera Murad Jamali and Osta Muhammad faced heavy damages, while the affected districts in Sindh included Jacobabad, Shikarpur and Kashmore-Kandhkot. “Individual growers have suffered huge losses, while overall crop production in Sindh will be covered from lower Sindh areas, where paddy benefited from the rain,” said Mahesar.

Upper Sindh’s five districts of Jacobabad, Larkana, Shikarpur, Kashmore-Kandhkot and Kambar-Shahdadkot produce around 70 percent paddy in Sindh over an area of two million acres. Along with the rain, arrival of water from Balochistan after damages to the Right Bank Outfall Drain (RBOD) increased the damages. Cotton on the left bank was already affected, he said.

According to official figures, recent monsoon rains have affected around 5.250 million people in 20 districts of the province, while crop standing on around 250,000 hectares were perished, besides agriculture land of around 1.5 million hectares was also affected.

Cotton affected in the left bank districts of River Indus in upper Sindh included mainly Ghotki, Khairpur and Naushero Feroze, which received heavy rains. “Trees and mango will benefit from the rains,” said Abdul Majeed Nizamani, president of Sindh Abadgar Board.

Dr. Younis Soomro, a grower from Shikarpur, said that the rains affected the paddy crop at a large scale, while estimates are underway.

Cotton benefited in parts of lower Sindh water was not stored in fields, as rain would remove white fly and other insects, which infected the crop, said Mehmood Nawaz Shah.

“Cotton Leaf Curl Virus (CLCV) is mostly transferred by white fly, which will be removed. However, Sindh is not infected by the CLCV at a large scale,” he said.

Naseem Usman, chairman of the Karachi Cotton Brokers Association, said that the rains have affected the cotton crop in Upper Sindh, while it benefited cotton in those areas, where there were light to moderate showers.

Zafar Shah, a grower from Badin, said that heavy rains fell in Badin, which damaged tomato and other vegetables, while paddy was also affected in low lying areas of the district.

FBR investigates revenue losses on import of tea, commodities

KARACHI: The Federal Board of Revenue (FBR) has started scrutinising of revenue losses on import of tea and other commodities through misdeclaration and smuggling, official sources said on Monday.

The FBR directed Pakistan Customs to conduct an analysis of import of tea, plastic, cloth/fabric and other items showing a declining trend in revenues to check misdeclaration and undervaluation, the sources said.

“All collectors of Pakistan Customs have been directed to prepare monthly report on such items,” said an official at Pakistan Customs on the condition of anonymity.

The data released by Pakistan Bureau of Statistics revealed that black tea import into Pakistan declined significantly during the first quarter of the current fiscal year. Tea import registered a 19.47 percent decline to $68.55 million during July-September 2012 as against $85.12 million in the corresponding quarter of the last fiscal year.

Similarly, the import of plastic material came down by 14.72 percent to $331.31 million during the period under review as against $388.49 million in July-September, 2011.

Sources in Pakistan Customs said that after the resumption of Nato supplies the smuggling of various commodities was rising again. Pakistan, on July 3, approved to reopen key Nato supply routes, which were suspended on November 26, 2011 over the loss of Pakistani soldiers.

In a report presented to the Supreme Court of Pakistan on ‘ISAF Containers Scam’, the Federal Tax Ombudsman (FTO) identified various commodities, including tea, which was smuggled from Afghanistan to Pakistan.

The FTO observed: “As soon as the Afghan trucks carrying transit cargo to Afghanistan cross the border they are offloaded and the cargo is carried back to Pakistan. Fully loaded trucks or pickups bring back the transit cargo from Afghanistan to Pakistan to various warehouses along the border. This cargo is then transferred to Pakistani trucks for their return journey back into the Pakistani markets.”

FBR Chairman Ali Arshad Hakeem, in a meeting last month with customs officials was annoyed over the inefficiency of the authorities, saying the country was flooded with smuggled goods. The chairman said that due to lack of examination of import consignments, the incidences of duty evasion and misdeclaration were rising. Early this month, Pakistan customs unearthed a scam of importing huge quantity of black tea and clearing the same without paying tax liabilities.

A Peshawar-based importer was importing black tea and managed to clear the commodity without paying additional sales tax. The sources also said that this also raised questions over customs officials’ performance in preventing misdeclaration and illegal import into the country.

American Business Council (ABC) of Pakistan, in its suggestion for Trade Policy 2012-2015, proposed the government should prepared a negative list of items, which are not utilised in Afghanistan, yet are imported and make their way into Pakistan.

The ABC said the Afghan Transit Trade is causing unlimited damage to the Pakistan economy as goods which are imported to be used in Afghanistan only are freely available in the Pakistan market without any customs or import duty. “Very little is being done to control this despite written agreement on papers,” the council added.

Local market ends day down after global losses

Posted October 22, 2012 18:00:00

The Australian share market finished the day weaker as traders followed Friday’s losses on Wall Street and in Europe.

The All Ordinaries index hit a 14-month high at the end of last week, but lost 29 points today, or 0.6 per cent, to close at 4,565.

The ASX 200 index fell 30 points to 4,541.

It was a bad day for the miners, big and small. Rio Tinto fell 2.4 per cent and BHP Billiton ended the day 0.9 per cent lower.

Fortescue Metals Group lost 2.1 per cent and Mount Gibson Iron 2.6 per cent.

One of the only miners to gain ground was Sundance Resources, which returned to trade after a month’s suspension. Its shares rose more than 2.9 per cent.

The banks mostly lost ground. NAB fell 0.8 per cent, Westpac 0.7 per cent and the Commonwealth 0.3 per cent.

ANZ traded flat though, and the Bank of Queensland rose 1.4 per cent as traders returned to the company after it announced a loss last week.

Retailers were mixed. JB Hi-Fi gained 1.6 per cent and David Jones rose by 0.4 per cent, but Myer fell 1.5 per cent.

Telstra fell 1 per cent to $4.03 a share.

Graincorp easily made the strongest gains of the day, rising nearly 39 per cent after confirmation of a takeover bid from US rival ADM.

The Ten Network rose 7.1 per cent, taking back some of the ground it lost last week after announcing a full-year net loss.

In other finance news, the Federal Government released its Mid-Year Economic and Fiscal Outlook which included $4 billion worth of savings to deliver a surplus of $1.1 billion this year.

The savings include cuts to the baby bonus and a change to make large businesses pay tax monthly instead of four times a year.

About 5.30pm (AEDT) spot gold was worth around $US1,726 an ounce, West Texas crude oil was weaker at around $US90 a barrel, while Tapis crude oil was fetching around $US116 a barrel.

The Australian dollar was buying around 103.26 US cents, 79.07 euro cents, 82.15 Japanese yen, 64.4 British pence and 126.13 New Zealand cents.

Topics: markets, currency, australia

Swan Brewery to close in Perth with job losses

Updated October 17, 2012 17:31:00

The company that owns the Swan Brewery has decided to close its operations in Perth, with the loss of 80 jobs.

Lion says the Swan Brewery has been operating substantially below full capacity for some time and investment to maintain its current operations is no longer sustainable.

Lion’s Leela Sutton says that means the brewer’s key West Australian brands of Swan and Emu beer will now be brewed in South Australia.

“We certainly committed to continuing to produce Swan and Emu,” she said.

“We will be moving that production obviously out of WA and we recognise that not everyone will like that news.”

Ms Sutton says the company has five breweries across the nation and the Swan Brewery is the least productive.

“Our Swan Brewery is actually the least utilised within the group and requires significant capital investment just to maintain its current operations,” she said.

“Unfortunately, this is no longer sustainable and our intention is to close down operations by the end of March 2013.”

Lion says it will invest $70 million into its West End brewery in South Australia to expand its capacity.

It says new roles created by the move will be offered to WA workers but unions say employees are unlikely to shift.

Unions WA’s Meredith Hammat says workers were sad to hear the news.

“People are shocked, people are obviously concerned about what it means for them and for their futures, and like everyone, will be saddened to hear the news,” she said.

She says they will help negotiate payouts for workers affected by the closure.

“Looking at ways to negotiate an arrangement that’s going to perhaps soften some of the blow for those workers that are affected,” she said.

“Clearly a lot of them are not in a position to be able to move interstate and many of them have probably worked there for a long period of time.”

The Swan Brewery closure will end a 175 year tradition of brewing its beer in Perth.

For many years, the brewery was located on the banks of the Swan River before it was moved into a factory at Canning Vale.

The old premises was turned into a restaurant and apartments.

Topics: company-news, alcohol, perth-6000, adelaide-5000

First posted October 17, 2012 14:13:37

News Qld defends Cairns Post job losses

Posted October 18, 2012 09:53:22

News Queensland regional director Jason Scott says the quality of the Cairns Post newspaper in the state’s far north will not suffer because of job cuts.

Mr Scott says fewer than 20 staff will go when the printing press closes next Thursday night.

He says the newspaper will be printed in a more advanced facility in Townsville.

“The quality of the paper will be better in terms of print quality because it is being printed on a Rolls Royce of a printing press,” he said.

“In terms of deadlines, the deadlines do not change significantly and let’s face it, in today’s modern media landscape, how often do we hold the presses for a front page splash?”

He says the decision to move the printing operation to Townsville was not made lightly.

“It’s been a long process where we’ve had to look at our cost base,” he said.

“There’s a lot of press capacity in Australia.

“We spent several million dollars on a press upgrade in Townsville that has excess capacity, so in the modern media landscape it doesn’t make sense to have two print plants … four hours apart.”

Mr Scott says he cannot rule out further job cuts in the future.

“No significant business, be it in Cairns or Brisbane or anywhere else in Australia, can guarantee that they won’t reduce their cost base sometime in the future,” he said.

“That’s just unrealistic but … I don’t have a plan in front of me to reduce journalist numbers at the Cairns Post.”

Topics: rural-media, print-media, media, community-development, regional, regional-development, cairns-4870

Securitas sees 400 job losses from cost cut plan

Wednesday, 17 October 2012 12:25 Posted by Parvez Jabri

STOCKHOLM: Security services group Securitas expects about 400 people to lose their job under a cost cutting plan aimed at saving a net 300 million crowns ($45.18 million) a year from 2013, the company said on Wednesday.

“This is mainly higher and middle level managers in Europe and North America,” said communications director Gisela Lindstrand.

The job losses were due to the plan to merge two divisions, the mobile and monitoring divisions and the European security services division, she added.

Copyright Reuters, 2012

Govt bracing for Gunns losses

Updated October 01, 2012 11:25:37

The administrator of the collapsed Tasmanian timber company Gunns has confirmed the State Government is among thousands of creditors who could lose money.

About 22,000 hectares of state forest is tied up in Gunns’ plantations which now stand in limbo after the company went into administration last week.

The administrator Daniel Bryant says that makes the Tasmanian Government a creditor.

“As a landholder they have an interest in this, yes.”

Economic Development Minister David O’Byrne could not say how much money the Government stands to lose, but insists it is in talks with Gunns administrators and receivers about several issues.

“Our focus is two-fold it’s about making sure Tasmanian taxpayers interests are well served but also that we’re able to maintain a business that can employ Tasmanians,” he said.

About 200 private landowners have lease agreements with Gunns.

The administrator says it will hold information sessions for them in a few weeks.

Topics: states-and-territories, timber, hobart-7000, tas, launceston-7250

First posted October 01, 2012 09:45:16

Shares set for weekly losses

Image Credit: AFPThe Hong Kong Stock Exchange. The benchmark Hang Seng Index jumped 224.74 points to 21,223.79 in the first minutes of trade yesterday, finally closing 0.7 per cent higher

London: European shares and the euro steadied on Friday, with both on course to end the week down as worries about the euro zone’s crisis strategy, the upcoming US election and slowing global economic growth limit the appeal of riskier assets.

A central bank stimulus-inspired rally that pushed global equities up around 15 per cent since early June has stalled this week as investors wait to see whether yet-to-be-deployed ECB bond purchases can calm the euro zone’s crisis and whether stuttering global growth will revive.

Having enjoyed a 1.2 per cent gain on Thursday, the Euro STOXX 50 index of top European blue-chips had dropped back 0.2 per cent to 2478.57 points by mid-morning, leaving it on course to end the week 1.4 per cent lower.

“With concerns over the state of the global economy coming to the fore this week, along with negative sentiment surrounding a Chinese slowdown, and earnings season and the fiscal cliff garnering negative attention in the US, visibility for equity markets in the short term remains clouded to say the least,” said Daniel Victory at Capital Spreads in London.

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London’s FTSE 100, Frankfurt’s DAX and the CAC in Paris were all in negative territory and MSCI index of global stocks was flat.

Japan’s Nikkei fell to its lowest level in more than two months in Asian trading, while US stock futures pointed to a fractionally higher open on Wall Street where the main focus will be on JP Morgan earnings, the University of Michigan’s preliminary consumer sentiment survey and September PPI data.

Many markets have become stuck in ranges since the start of the month as investors wait to see whether Spain requests a bailout, a prerequisite for the ECB to buys its bonds.

The euro, which has tracked between $1.28 and $1.3070 over the last two weeks was at $1.2974, up 0.4 per cent on the day but down 0.4 per cent week-on-week. The dollar was a tad weaker when measured against a basket of currencies.

With the ECB waiting in the wings, currency strategists think there is limited downside to the single currency at present.

“Negative news from the periphery of Europe is now being viewed as nudging Spain closer to seeking assistance from the EU,” analysts at Morgan Stanley, wrote in a note.

“We believe that EUR/USD has traded a corrective bottom, holding above the 200-day moving average at 1.2825. We now expect a resumption of the recovery trend to start to unfold.”

Following better-than-expected national figures earlier in the week, euro zone data confirmed factory output in the bloc grew much more than forecast in August. It is unlikely to prevent the region sliding back into recession.

German Bund futures tracked gains in US Treasuries, but traders expected another quiet session with no more clarity yet on when Spain will seek a bailout. Ten-year Spanish bond yields were down 3.6 basis points at 5.75 per cent but were within recent ranges.

Next week will be another opportunity for the bloc to make progress with its crisis strategy when EU leaders meet in Brussels on Thursday.

One of the main issues markets hope to be ironed out is the apparent back pedalling by Germany, the Netherlands and Finland on plans to share the cost of recapitalising Spanish banks.

“Once the single supervisory mechanism is established the ESM (euro zone bailout fund) should be rapidly given the possibility to recapitalise banks directly,” Italy’s Prime Minister Mario Monti urged late on Thursday.

Asian stocks rose, with the regional benchmark index headed for its first gain this week, after US jobless claims fell more than estimated and China and Japan agreed to hold talks over a territorial dispute that has disrupted trade between Asia’s biggest economies.

Toyota Motor Corp, a Japanese carmaker whose sales in China slumped last month after rioters torched dealerships in protests over disputed islands, added 1.1 per cent. China Cosco Holdings Co. climbed 8 per cent, leading Chinese shipping companies higher, after rates for hauling commodities rose. Softbank Corp plunged 17 per cent, dragging the Nikkei 225 Stock Average to a fourth day of declines, on talks to invest in loss- making Sprint Nextel Corp

The MSCI Asia Pacific Index gained 0.4 per cent to 120.77 as of 7:36pm in Tokyo, with more than three shares rising for every two that fell. The measure is poised for a 1.5 per cent slide this week, its biggest weekly drop since August, after the International Monetary Fund cut its global growth forecasts and Japanese car sales fell in China. The two countries have agreed to hold talks to reduce tensions.

“It will take a while to fully recover the pre-dispute situation, but at least we’re seeing some gradual improvement in the China-Japan relations,” said Yoji Takeda, who oversees about $1.2 billion as head of Asian equities at RBC Investment Management (Asia) Ltd “As investors see more positive earnings reports, people may start to turn confident. We’re seeing moderate growth in the US and the stock market there has held up quite well.”

The MSCI Asia Pacific Index gained 5.7 per cent this year through yesterday as central banks from Europe to the US and Japan added stimulus measures to counter a global economic slowdown and the European debt crisis. The Asian benchmark traded at 12.7 times estimated earnings on average, compared with 13.7 times for the Standard & Poor’s 500 Index and 12 times for the Stoxx Europe 600 Index.

Singapore’s Straits Times Index climbed 0.4 per cent, erasing losses of 0.2 per cent. The country’s central bank unexpectedly refrained from easing monetary policy even as the economy contracted last quarter, saying inflation will remain elevated for some time.

Hong Kong’s Hang Seng Index advanced 0.7 per cent. China’s Shanghai Composite Index and Australia’s S&P/ASX 200 Index added 0.1 per cent. South Korea’s Kospi Index was little changed.

The BSE India Sensitive Index slid 0.7 per cent as a cut in sales outlook for Infosys Ltd outweighed a report showing the nation’s industrial production rebounded in August.

Infosys Ltd fell 5.4 per cent to 2,395.35 rupees as India’s second-largest software services exporter cut its annual revenue forecast and said higher wages and currency fluctuations will hurt profitability.

BofA chief sees further job losses

Bank of America Corp Chief Executive Officer Brian Moynihan will cut more jobs as the US’s second-largest lender works through mortgage losses and global economic growth sputters.

“I think we continue to reduce our headcount, you can see it in our patterns, it’s really based on demand,” Moynihan, 53, said in an interview with Bloomberg Television in Tokyo on Thursday. “As we continue to get through the mortgage issues at Countrywide you’ll see the headcount come down substantially.” BofA is among banks cutting jobs and other expenses to restore profitability after the 2008 financial crisis sent borrowers into delinquency and the global economy into the deepest slump in at least seven decades. Moynihan announced $3 billion of cuts at BofA’s investment bank, trading and wealth- management units in July.

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Smuggling of tyres causes annual losses worth $80m

KARACHI: The national exchequer is suffering from annual losses worth $ 80 million as smuggling of used tyres from India and China is on the rise once again with no check by the government to control its supply into the local market, said a local tyre manufacturer.

The smuggling of used tyres is putting a huge dent on the exchequer by way of taxes and duties that cause evasions of hundreds of million of rupees every year because Pakistan has been a dumping ground for many years for countries like China, and now India, to sell out scrap at bulk, sources said.

The local manufacturers said that used tyres have been made available largely in the local markets due to the negligence of the government, which is reluctant to take action against the smugglers. The government has failed to provide protection to the local industry, which has set up millions of dollars worth of manufacturing plants, they said.

The situation of the tyre industry can be gauged from the fact that market share of smuggled tyre constitutes two-third of the market as compared with locally made tyres, which stands at one-third share, the local manufacturers said.

The disproportionate market share is undermining the efforts of the local industry that has been established over the years with investments of million of dollars to provide employment while saving foreign exchange, they further added.

Sources said the menace of smuggling has already hurt the government, the industry as well as the importers. Smuggling, which has been going on for decades has become easy through the loopholes that existed in the Afghan Transit Trade Agreement of 1965. Strong administrative measures are required to stop smuggling beginning with a positive change in the ATTA, they said.

They stated that it is the responsibility of the government to provide level playing field to the industry and protect its survival but on the insistence of the trading community (who have no assets on ground) the government reduced the import duty on truck/bus tyres to just five percent to stop smuggling.

Sources said that as a result of these failures, the only unit manufacturing truck tyres has reduced its production as it could not compete, and thousands of employees would suffer if this goes on for a long period.

In 2010, the market size of passenger car tyres was around 1,968,000 units with smuggled tyres share at 20 percent, imported tyres share at 37 percent and locally made tyres share at 43 percent.

Similarly, market size of light truck tyre was 1,834,000 units with smuggled tyres share at 52 percent, imported tyres share at 33 percent and locally made tyres share at 15 percent.

Further, trucks/buses tyres volume was 1,509,000 units with smuggled tyres market size at 47 percent, imported tyres share at 50 percent and locally made tyres share at three percent.

Sources said the agreement of 1965 did not put a limit to the number of tyres that could be imported and transited duty free across Pakistan. Just before the new agreement was signed in presence of foreign powers, the industry had implored the government to put quantitative restrictions on all imports and to ensure all Letter of Credits would be opened in Kabul and a copy forwarded to Pakistan Customs, who would then allow duty free access to these imports only. Sources said the industry’s genuine concerns were thrown out leaving local manufacturers at the mercy of smugglers as well as corrupt border officials.

The industry stakeholders suggested that raids be carried out in Rawalpindi / Islamabad on tyre shops and all tyres that have no papers to back up should be confiscated. Similar raids should also be carried out in Lahore, Karachi, Peshawar and Multan etc, they said.

Meanwhile, experts said that second hand tyres are also not compatible for use in the vehicles as due to their low quality, they can be the cause of traffic incidents and consequently, loss of precious lives.

Financial job losses up in Europe

London: Financial job losses in western Europe surpassed 30,000 this year as firms including Royal Bank of Scotland Group Plc and UBS AG cut positions amid the sovereign debt crisis.

While the 33,437 reductions are less than half of the 76,654 made in region during the same period a year ago, analysts expect the cuts to increase. Financial firms have announced more than 60,000 cuts globally so far this year, data compiled by Bloomberg Industries show.

“Last year’s cuts were designed to deal with the new market paradigm,” said Christopher Wheeler, a London-based analyst at Mediobanca SpA. “This year’s cuts show how much deeper the banks have had to go. Job losses will continue through year-end as banks focus on costs rather than revenues, given the current environment.”

Firms in the City and Canary Wharf, London’s financial districts, and lenders across Europe are eliminating more employees as the sovereign debt crisis triggers a slump in trading, stock and bond offerings. The 17-country euro area economy will contract 0.4 per cent this year, and grow 0.2 per cent in 2013, less than the 0.7 per cent predicted three months ago, the International Monetary Fund said on Tuesday.

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“Some banks might expect, and others hope, that the world economy will pick up again next year,” said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics. “In reality, much will depend on how the markets will be fairing in the coming years to determine whether the pain is behind, or in fact still ahead of us.”

RBS, Britain’s biggest government-owned lender, said on September 24 it will cut 300 more jobs at its investment banking unit in addition to 3,500 announced in January. UBS AG, Switzerland’s biggest bank, plans to cut about 80 to 90 positions in its European investment-banking division as part of a global revamp, two people with knowledge of the matter said last month.

Nomura Holdings Inc., Japan’s biggest brokerage, is eliminating about 100 investment banking jobs in Europe as its unwinds a four-year-old international expansion, three people with knowledge of the plans said in September. Julius Baer Group Ltd., the Swiss private bank established in 1890, may cut more than 1,000 jobs as it combines Bank of America Corp.’s non-US Merrill Lynch wealth units.

Financial firms “still require massive cuts,” said Jason Kennedy, chief executive officer of Kennedy Group, a recruiting firm.

Electricity worth Rs970.20m wasted in transmission losses in August

ISLAMABAD: Electricity valuing Rs970.20 million has been wasted in the head of transmission losses during the month of August, according to a petition submitted by the central power purchasing agency (CPPA) with the National Electric Power Regulatory Authority (NEPRA), on Wednesday.

The petition seeks reduction in the power tariff by four paisas per unit.

Member Licensing Shaukat Ali Kundi and Member Tariff Khawaja Naeem expressed alarmed after knowing that the fact that electricity of Rs970.20 million has been wasted just in the head of transmission losses in the month of August.

They also expressed concern over the increasing inefficiency in reducing the losses.

The member licensing during the hearing also said that many units of Northern Power Generation Company are not generating electricity but to keep the units standby, 50MW from the Wapda’s system is being consumed, and the financial burden of this was transferred to the consumers, which is sheer injustice to them.

However, NEPRA has reduced the power tariff by five paisas per unit. This would be first relief to the consumers which is too minor reduction in tariff.

Nepra has factually reduced the power tariff by Re0.05 per unit just on account of the fuel adjustment mechanism. The regulator had fixed the reference fuel cost for the month of August at Rs6.69 per unit, but the factual fuel cost on one unit of electricity stood at Rs6.64 meaning by that total fuel cost in the month of August stood at Rs60 billion.

The decision to reduce the power tariff by five paisas per unit will not be effective on the life line consumers who consume just 50 units in one month.

During the hearing, it was also disclosed by the authorities concerned that the cost to generate electricity by using high-speed diesel as fuel is Rs19.15 per unit, furnace oil Rs15.59 per unit, gas Rs5 per unit, coal Rs3.73 per unit and hydro generation cost is just eight paisas per unit. In the month of August, the share of hydro generation in electricity volume was at 39 percent, thermal generation on furnace oil 30 percent, gas 23 percent, HSD 1.34 percent, and nuclear share in electricity generation stood at 3.60 percent.

Paddy farmers face severe losses due to monsoon rains

KARACHI: Approximately 15 percent of Sindh’s paddy crop was damaged due to the monsoon rains while growers faced losses of more than 90 percent in the affected areas, said Arif Hussain Mahesar, grower and president of Sindh-Balochistan Rice Millers Association on Friday.

Mahesar said that while some low lying areas of paddy growing belt suffered from stagnant water for five days which led to heavy damages, a majority of the areas were still safe as paddy had matured by the time of rain.

Balochistan’s Dera Murad Jamali and Osta Muhammad faced heavy damages while affected districts of Sindh included Jacobabad, Shikarpur and Kashmore-Kandhkot. “Individual growers have suffered huge losses while overall crop production of Sindh will be covered from lower Sindh areas, where the paddy benefited from the rain,” he said.

Upper Sindh’s five districts: Jacobabad, Larkana, Shikarpur, Kashmore-Kandhkot and Kambar-Shahdadkot produce around 70 percent paddy in Sindh over an area nearly two million acres.

Syed Mehmood Nawaz Shah, secretary general of Sindh Abadgar Board said Balochistan’s rain water is still coming in Sindh’s Larkana area and damages to paddy are likely to increase.

Shah further said that cotton was already affected on the left bank. Estimates of the losses are still not available as water continues entering in Sindh’s boundaries, he added.

Dr Younis Soomro, a grower from Shikarpur said that rain had affected the paddy crop at a wider angle and estimates of damages are underway.

President Sindh Abadgar Board Abdul Majeed Nizamani also said that cotton had been affected in left bank districts of Indus River in upper Sindh mainly Ghotki, Khairpur and Nausheroferoze, which received heavy rain.

Chairman Karachi Cotton Brokers Association Naseem Usman said that rain had affected the arrival and quality of cotton in many areas, while it benefited cotton in those areas, where there were light to moderate showers. Zafar Shah, a grower from Badin said that heavy rain fell had damaged tomato and other vegetables in the area, while paddy was also affected in low lying areas of the district. Canals have been closed while drains are still taking water away, he said.

PC for legislation to arrest power losses

KARACHI: The Planning Commission has proposed a revised tariff regime to eliminate tariff differential, subsidy and improved tariff collection with necessary legislations for penalties to arrest the power sector losses that have mounted to 21 percent, sources said.

The implementation plan of framework for growth strategy of the Planning Commission has laid its prime emphasis on improved governance to attain energy security through reformed energy sector institutions for improved performance and comprehensive action plan to reduce losses, control theft and improve efficiency.

Besides, amended NEPRA and Conservation Acts, ensuring recovery of cost could prevent recurrence of the circular debt, they said.The implementation of the growth strategy as per the plan would result in increased supply of electricity and gas in efficient, affordable and friendly manner to spur and sustain growth, according to the plan.

The growth strategy aims at reducing the electricity sector losses to 16 percent, elimination of power outages, reduction in gas distribution losses to five percent and elimination of gas outages by 2015-16.

The commission’s plan noted that better guidance and enforcement of rules and regulations through revamped generation companies and Water and Power Development Authority’s hydel, privatisation of distribution companies and induction of professional management could result in fully corporatised and privatised energy sector. The commission has been skeptical of weak regulatory bodies and proposed regulatory reforms to establish a single independent energy sector regulatory body.

The power subsidies have been a plaque to the country’s finances, the plan said and proposed rationalised energy prices tariff policy reforms and rational producer-consumer pricing. The implementation plan envisages enhanced efficiency in the energy generation and use through expanded hydro, coal-based and optimised renewable energy production.

Asian markets mixed after Wall Street losses

HONG KONG: Asian markets were mixed on Tuesday following losses on Wall Street and as profit-takers moved in after last week’s huge gains sparked by the US Federal Reserve stimulus plan.

Anti-Japan protests across China also weighed on shares in both countries, with three of Japan’s biggest car makers saying they had closed their factories or cut production in China as a result.

Tokyo rose 0.15 percent by the break, Sydney fell 0.20 percent, Seoul lost 0.10 percent and Shanghai gave up 0.35 percent while Hong Kong was flat.

Investors were taking a step back after the Fed on Thursday said it would start a third round of bond-buying, known as quantitative easing (QE3), in a bid to jumpstart the US economy.

The announcement, which followed a European Central Bank plan to buy the debt of under-pressure eurozone nations, had injected global markets with some much-needed risk appetite on Friday.

But profit-taking on Wall Street Monday was fuelled by data showing the Fed’s Empire State manufacturing index for the New York region fell for a second straight month in September.

The Dow fell 0.30 percent, the S&P 500 slid 0.31 percent and the Nasdaq shed 0.17 percent.

“The big question was how long the exuberance of QE3 was going to last. Not very long it seems,” Tim Waterer, senior trader at CMC Markets in Sydney, told Dow Jones Newswires.

On currency markets the dollar was changing hands at 78.63 yen in early Asian trade, compared with 78.70 yen in New York late Monday.

The euro fetched $1.3110 and 103.03 yen, down from $1.3114 and 103.22 yen.

With the Fed and ECB action unveiled, eyes are now on a two-day policy meeting of the central Bank of Japan that starts Tuesday, while China is due to release manufacturing activity figures for September on Thursday.

Tokyo and Beijing are locked in a political stand-off over a disputed group of islands in the East China Sea that have seen violent protests across China which have hit shares.

Honda Motor said it had temporarily closed all five of its China plants, while Nissan shut two of three factories and Toyota said it had scaled back some production without elaborating.

The decisions came after Panasonic said it suspended operations at some of its facilities in China and Fast Retailing temporarily closed seven of its 145 Uniqlo stores in the country.

Kenichi Hirano, market analyst at Tachibana Securities, said the islands are like “clouds hanging low in the sky”, adding some retailers who had outlets in China could be negatively affected.

Oil prices rose, with New York’s main contract, light sweet crude for delivery in October, adding 31 cents to $96.93 a barrel and Brent North Sea crude for November delivery gaining 32 cents to $114.11.

Gold was at $1,756.80 at 0240 GMT compared with $1,770.20 on Monday. (AFP)

Pakistan Railways suffers Rs100m in losses a month

Hike in fuel prices compou­nds revenu­e proble­ms at railwa­ys with the depart­ment suffer­ing losses worth Rs300,000 a day.  Railways is suffering losses worth Rs300,000 a day due to hike in fuel prices. PHOTO: AFP

LAHORE: Pakistan Railways (PR) while announcing a hike in fares on Saturday, disclosed that it will continue to suffer a loss of Rs100 million a month from the government’s decision to raise fuel prices.

PR sources said that the department is already facing a financial crisis and several trains have been suspended to arrest losses.

After the government raised prices of petroleum products again on Saturday, sources said its daily losses amounted to Rs300,000 daily.

As a means to balance the books in light of the hike, the department announced a five per cent increase in fares from September 1.

Corporate results: KESC switches to profit after six years of losses

Profit marks first billio­n made by UAE-based Abraaj Capita­l post acquis­ition.  The profit also marks the first billion made by Dubai-based Abraaj Capital since it acquired management controls of the city’s sole power distributor in November 2005.


Karachi Electric Supply Company (KESC) has switched to a profit regime in fiscal 2012 after a gap of six years.

The electric supplier posted net profit of Rs2.62 billion, more than the total amount the company made in the last ten financial years, in fiscal 2012 compared with loss of Rs9.4 billion in the same period a year ago, says a notice sent to the Karachi Stock Exchange.

The profit also marks the first billion made by Dubai-based Abraaj Capital since it acquired management controls of the city’s sole power distributor in November 2005. The management posted a profit of Rs321 million in the year it took over and since then has been incurring a loss. The utility witnessed a profit only twice in the last twelve years.

The core increase in profitability stems from tariff adjustment, one of the three ways the electricity distributor generates revenue, data shows. Revenue from tariff differential electrified 56% to Rs70 billion in the outgoing financial year compared with the preceding year’s Rs45 billion.

Overall revenues grew 24% to Rs163 billion compared with the preceding year’s Rs131 billion.

The company also managed to trim expenses incurred in transmission, generation and distribution by 8% to Rs13.3 billion in fiscal 2012 from Rs14.5 billion.

Transmission and distribution losses have come down to 32.2% of the total from 34.43% in fiscal 2005, the year it switched from being a state-owned enterprise to a private company. The line losses are still higher than the national average of around 22% and more than double the global average of around 15%.

The company’s shares rose 22% or Rs0.81 to Rs4.49, the highest since May 3 during trade at the Karachi Stock Exchange.

The result will help us position KESC favourably in the investors’ community and help us generate funds for our future mega projects, added Gauhar. A profitable KESC will help us attract the required financial resources from local and international financiers,” said KESC CEO Tabish Gauhar in a press statement.

Raising capital

The new management has had to raise large amounts of capital in order to switch the entity into a profit regime.

During the last few years, KESC has been successful in arranging substantial funds for its development project from Asian Development Bank, International Finance Corporation and OEKB along with many local financial institutions.

In July 2011, the company decided to issue 7.25% right shares, hence 29 new shares for every 400 ordinary shares held by stakeholders.

The management launched term finance certificate worth Rs2 billion to the general public in May 2012, to finance KESC’s permanent working capital requirements.

In the latest move, KESC will list secured term finance certificates of Rs1.2 billion to raise capital. Privately placed term finance certificates are offered to banks, other financial institutions and not the general public. KSE notified on Wednesday that trading in the second such term finance certificate of KESC will start on the Exchange from August 13, 2012.

“We are grateful to our international shareholders who have been very patient and our international and local lenders who entrusted us with their money,” said Gauhar.

Published in The Express Tribune, August 9th, 2012.