PRESS DIGEST-Australian Business News - June 25

by Reuters
Monday, 24 June 2013 21:43 GMT

(Deletes incorrect price tag on Rio Tinto diamonds arm in excerpt 13. Adds date)

June 25 (Reuters) - Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Retiring Metcash chief executive Andrew Reitzer said the survival of local operations of about six food manufacturers, including SPC Ardmona and Simplot, was under threat from the high Australian dollar and the "marketing war" between retail chains Coles and Woolworths . The Australian Competition and Consumer Commission should consider limiting petrol discounts from the major retailers as it uses power in one market to provide advantage in another, added Mr Reitzer. Page 15.

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The 60 basis point rise in yields on 10-year Australian Government bonds since late last week has put the Australian bond market into a "wipe-out" situation, said Australia and New Zealand Banking Group chief economist Warren Hogan yesterday. The dramatic move could damage the value of other asset classes and put pressure on government financial positions, according to Mr Hogan. Page 15.

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APN News & Media may look to sell out of its Adshel street furniture joint venture with United States company Clear Channel Communications to reduce its debt level. Sources have identified two complications with this move: Clear Channel already has high debt and would need approval from creditors for the deal and Adshel needs some investment which may be difficult for APN to fund. Page 17.

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Origin Energy's A$1 billion Ironbark coal seam gas project in Queensland is likely to be the energy provider's next approved development, said chief executive Grant King. With its Australia Pacific liquefied natural gas project due to start production in 2015, Origin would have substantial cash inflows, giving sole capacity to fund Ironbark, Mr King explained. Page 17.

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Online insurance comparison company iSelect listed on the Australian Securities Exchange at midday yesterday at A$1.85 per share and closed at A$1.56 a share, losing 15.7 percent of its market capitalisation of A$479.3 million. iSelect's technology was "not groundbreaking" and there was already strong competition in its field with more possible, said Evan Lucas, market strategist at foreign exchange and contract for difference firm IG. Page 19.

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The retail banking market in Australia lacks competition, with the major banks taking 90 percent of the mortgage market, said HSBC Bank Australia's new chief executive Tony Cripps. Asian banks should increase their presence in Australia as trade flows between Australia and the region increase, with HSBC forecasting that by 2020, 80 percent of exports from Australia will go to Asia, explained Mr Cripps. Page 19.

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Guy Debelle, assistant governor at the Reserve Bank of Australia (RBA), over the weekend was appointed chairman of the market committee of the Bank for International Settlements for the next three years. The committee facilitates monitoring of financial markets around the world and the appraisal of consequences for central banks from changes. Dr Debelle also continues in his RBA role. Page 19.

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The plan to build an invitation-only casino and luxury hotel from James Packer's Crown Limited has a higher probability of attracting high rollers to Sydney than rival Echo Entertainment Group's proposal, according to David Green of independent casino advisory firm Newpage Consulting. Crown has international experience that included operators of casino junkets whereas Echo experience was confined to domestic Australia, explained Mr Green. Page 22.

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The average cost to Australian companies of data breaches during 2012 was A$2.72 million, according to research from information security specialist Ponemon. Many companies were unaware of this type of risk until impacted directly, said Gail Pemberton, former chief information officer at Macquarie Bank and currently director at PayPal Australia. Page 23.

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National Australia Bank will shortly commence trials of smartphone and tablet digital wallets with MasterCard's MasterPass and Visa's V.me, said Antony Cahill, NAB's executive general manager of digital and direct banking. The systems keep electronic records of loyalty cards and payments, with NAB's version allowing usage of cards from other banks and issuers, explained Mr Cahill. Page 23.

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THE AUSTRALIAN (www.theaustralian.com.au)

Wealth management firm AMP has warned that profits are expected to fall to between A$415 million and A$435 million, below market expectation of over A$500 million. AMP said the industry was experiencing increased pressures from life insurance and income protection claims and policy lapses, including A$32 million combined "experience loss" for the five months to May 31. Page 17.

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The United States Federal Reserve recent qualitative easing announcement and concerns surrounding liquidity in China's banking system have soured Australian market conditions for initial product offerings (IPO) during the second half of the year, coming off a five-year high. IPO volumes increased to A$786 million for the first half of this year, a four-fold rise on the corresponding six months of 2012, according to Thomson Reuters data. Page 17.

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Rio Tinto cited falling markets behind the decision to abandon plans to sell its diamonds business. Rio spent 15 months examining divestment options, but diamonds and minerals chief Alan Davies said to "generate maximum value" for shareholders the best outcome involved retaining the diamonds businesses. Page 18.

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Alan Machet, most recently a divisional director for investment firm Macquarie Private Wealth, has moved to head up finance company Citibank's Australian credit card business. Mr Machet's appointment will assist in "deepening our customer relationships", said Julian Potter from Citibank. Page 18.

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Newcrest Mining Ltd will cut around 150 out of 5,000 jobs at its Papua New Guinea Lihir gold mine. General manager of operations, Karl Spaleck, outlined the intent of "optimising the plant and simplifying operations", targeting an annual output of 1.2 million ounces. Positions will also go as part of 20 to 30 percent cost cuts at Newcrest's Hidden Valley operation. Page 18.

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Retiring Metcash chief executive Andrew Reitzer yesterday reported a net profit of A$206 million after tax for the 12 months to the end of April for the food, liquor, hardware and auto parts wholesaler. Although the overall increase was 129 percent on the previous financial year, sales from the core Metcash Food and Grocery division dropped 2.3 percent to A$9.1 billion. Page 19.

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Continuous disclosure requirements motivated casino investor Echo Entertainment to release details of its A$1.1 billion Pyrmont redevelopment plan after first seeking permission from the New South Wales government. The government approved the media conference held on Sunday as long as it "did not descend into a slanging match with Crown", according to one source. Page 19.

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Online travel accommodation provider Wotif yesterday issued a net profit after tax downgrade to between A$50.5 million and A$51.5 million for the 2013 financial year. A$1.74 million of the A$2.5 million asset write-down related to some of its Asia Web Direct domain names receiving lower ranks following Google algorithm changes. Page 19.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Independent expert Grant Samuel has recommended GrainCorp shareholders accept the Archer Daniels Midland (ADM) takeover offer of A$12.20 per share, plus dividends, which could take the offer to A$13.97 a share, despite saying a higher offer from a third party could eventuate. The 19.85 percent owned by ADM would not deter a "determined bidder", and there is time in which to make such an offer, Grant Samuel said. Page 23.

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