15 Feb 2013
• Companies that reported included CBA (positive – bumper result), JB Hi Fi (positive), Boral (neutral), Stockland Group (positive), CSL (positive), Car Sales (positive), Leighton Holdings (positive).
• Wesfarmers also released a solid result – Coles (in line with expectations), Bunnings (upgrades required), Resources (outlook tough), Target (terrible), Kmart (strong).
• Rio Tinto has released a statement citing that the Australian Competition Tribunal had ruled that RIO did not have to open its key rail lines to other miners wanting access to the line…. common sense prevailed.
• While cash and term deposit rates continue to fall, owners of these blue chip companies got a pay rise this week.. RIO (dividend up 15% on last year), Wesfarmers (dividend up 10%), and CBA (dividend up a whopping 19%).
• Tough conditions continue in retail with David Jones still struggling.
• News just in that Warren Buffet’s Berkshire Hathaway (together with a private equity firm) will buy food giant H.J. Heinz Co for $23.2 bn in cash…who said baked beans were boring!
• Home loan approvals fell in December for the third consecutive month. Finance approvals for the construction and/or purchase of newly-built homes only increased 2% versus the prior year.
• For all loans, the first-home buyer share slumped to a 9 year low – have dropped sharply in NSW (shortage of supply and unaffordable inner city prices), whilst WA is still clearly strongest. Note, first home buyers are normally stimulated most by lower rates.
• President Barack Obama gave his State of the Union speech – key highlights included: laying down a challenge to Congress warning he’d use executive powers on wide ranging issues; announced talks for a US - European Union trade deal; called for the minimum wage to be raised to $9/hour (that’s right, a whole $9) to stimulate the economy.
• The Australian Government now admits they got the projections on the mining tax wrong with only $126m raised in its first 6 months….original projections were that it was supposed to raise $2bn this financial year and $10.5bn over 4 years - impossible in its current format.
• Speculators are speculating (which is apparently what they do best) that Kevin Rudd will launch a final showdown with Julia Gillard in the coming weeks over the Labor leadership.
• Tony Abbott is again missing from the headlines this week….apart from his proposal to build 100 dams across the country - the proposal was apparently leaked. The proposal has been met with condemnation from the Greens and Labor given it will most likely lead to increased water prices given the construction cost required.
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