Archive | Archive – world business

Snapshot on world business, week to 24 March 2002

18 March 2002

Harvey Norman Holdings Ltd increased net profit after tax by 18.8% to $A67.9 million in the 31 December half. Sales from the franchised Harvey Norman stores in Australia & the company’s New Zealand chain (excluding the Pertama stores in Singapore & the Australian Rebel chain which Harvey Norman too control of last July) rose 9.5% to $A1.4 billion. Same-store sales rose 6%. Sales for the 8 nmonths to February rose 9.7% to $A1.83 billion, with same-store sales up 5.9%. Pertama sales doubled to $A162.4 million in the half-year.

Foodland Associated Ltd (FAL) increased aftertax profit for the 26 weeks to 27 January by 119% to $A47.3 million on record sales from continuing operations of $A2.14 billion, up 25.8%. FAL’s benchmark for determining dividend — earnings/share from continuing operations before unusuals & goodwill amortisation — rose 29.6% to A60.9c. Earnings/share from all sources rose 117.7% to A49.2c. In the previous period FAL reported $A15.1 million of losses from tax from discontinued operations, arising mostly from closing the Deka chain in New Zealand. The company has increased its fully franked dividend by 28.8% to A33.5c, representing a 55% payout before goodwill amortisation, discontinued operations & unusuals, all after tax.

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Snapshot on world business, week to 12 August 2001

Latest: US imposes tariff on Canadian lumber.

12 August 2001

The US Government imposed a 19.3% tariff on Canadian softwood lumber on Friday, siding with the US sawmills that complained the Canadians gained unfairly from subsidies and against US housebuilders and consumer groups who have produced precise figures on how much more a house will cost.

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Snapshot on world business, week to 19 January 2003

14 January 2003

Le Monde Diplomatique extends the perceptive & thought-provoking tradition of the French daily newspaper. In its latest edition (subscription required), articles include a proposition that the US has only 1 option if it’s to protect its interests & world dominance: It must extend its global reach by imposing not just its military superiority everywhere, but also its administrative, legal & technical standards on international trade & finance. Among others is 1 which suggests that as the US reviews its oil source strategy, sub-Saharan Africa could account for 25% of US crude oil imports by 2015. 2 articles deal with US treatment of Europe: in the 1st, the Nato summit in Prague admitted several former Soviet republics and allowed the US to reassert its supremacy over its European partners; in the 2nd, Europe is defined as a trading area within the framework of US imperial strategy and, without much consultation, the US promises European Union membership to those states whose co-operation it needs.
Website: Le Monde Diplomatique

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Snapshot on world business, week to 1 December 2002

27 November 2002

Lance Poulsen, 59, made a successful career through the 90s taking over the rights to receivables of hospital & home healthcare companies waiting for payments from insurers & government agencies. His company, National Century Financial Enterprises, packaged the receivables into collateral for bonds, sold these in private placements to “sophisticated” investors, clipped the ticket and got top ratings from Moody’s Financial Services and Fitch Ratings. Mr Poulsen, with a business in Ohio, a couple of corporate jets and a Florida mansion, over-extended, lending increasing amounts against future receivables (people yet to receive their hospital operation). Last week National Century filed for Chapter 11 bankruptcy protection after using up $US3.35 billion in bonds. Credit Suisse First Boston said it would take a $US214 million hit.

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Snapshot on world business, week to 24 June 2001

Latest: Japanese growth short of target as bad loans mop-up continues, HK supermarket chain fails, some bright spots in US statistics, Howard Smith says Wesfarmers bid too cheap, Suncorp to tackle AMP’s general insurance.

24 June 2001

Japan’s Council on Economic & Fiscal Policy said growth would fall short of the official 1.7% target for the March 2002 year. But the Prime Minister, Junichiro Koizumi, endorsed restructuring proposals, saying reforms were needed to resume growth, which was expected to range from 0-1% over the next three years. Public spending will be cut, some public corporations will be privatised and the Government will cap its bonds on issue at 30 trillion yen. The state-run Resolution & Collection Corp will buy bad loans from the 16 main banks if they fail to get them off their books within three years. The banks will also be required not to make fresh loans to troubled companies.

22 June 2001

Mainland Chinese supermarket group Guangnan (KK) has been unable to break into the Hong Kong market, going into liquidation this week with $HK209 million of debt after losing $HK145 million this year. Guangnan took over a local chain in 1996 and had 34 stores. Jardine Matheson’s Wellcome chain and Cheung Kong’s ParknShop have 70% of the market, with China Resources (Holdings)’ CRC chain a tenuous third with 56 shops. Jardine’s overseas supermarket operator, Dairy Farm International, is being dismantled in Australia (Franklins chain) and faces similar treatment in New Zealand (Woolworths).

21 June 2001

US housing starts were steady from April to May at 1.62 million and 3.1% ahead of May 2000. The National Association of Home Builders’ housing market index, updated on Monday, rose 2 points to 58 points to get back where it was in March, but still well below last November’s peak of 65. Builders’ expectations about single-family home sales improved, which may keep a US recession at bay a while longer. The US index of leading indicators, out on Wednesday, rose 0.5 points, making up for ground lost since last November.

Howard Smith Ltd said its scheduled 29 June general meeting to approve the buyback of up to 20% of the company’s stock would be deferred until further notice because of a takeover bid from Wesfarmers Ltd of Perth.. Howard Smith directors’ initial reaction to the Wesfarmers bid of two shares plus $A12 for five Howard Smith shares was that it was inadequate. They expect their bid response to go out mid-July. Howard Smith chairman Frank Conroy said Wesfarmers’ proposal didn’t reflect the significant synergies it would gain from merging its Bunnings hardware business with Howard Smith’s BBC Hardware and Hardwarehouse.

Suncorp-Metway Ltd of Brisbane is issuing 41.3 million shares at $A13.30 to raise $A550 million to buy AMP’s Australian general insurance operations.

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Snapshot on world business, week to 17 August 2003

15 August 2003

Australian retail group Coles Myer Ltd increased 4th quarter sales by 7.4% to $A6.7 billion, and full-year sales by 6.1% to $A27 billion. Myer Graces Bros and Megamart sales rose 5.4% in the 4th quarter but were flat for the year.

Lend Lease Corp Ltd will sell its Lend Lease Mortgage Capital business in the US to Wachovia Corp for $US42.5 million, $US1.5 million above book value.

AMP Ltd will release its June half result on Wednesday 20 August. The 10am media briefing & 12.30pm analysts briefing (Sydney time) will run live on AMP’s website and all presentation material will be published on the website.
Website: AMP Ltd

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Snapshot on world business, week to 30 March 2003

30 March 2003

AMP Ltd will transfer its British banking portfolio to the Newcastle Building Society as it tries to restructure back to health. AMP’s UK ban has a £360 million mortgage portfolio, £60 million deposit portfolio & £12 million of loans on policy. The transfer should be completed within 3 months, subject to regulatory approval & contractual obligations. AMP aims to release $A500 million in capital by the end of 2003.

28 March 2003

The World Trade Organisation has followed last year’s declaration against US tax breaks for exporters through foreign sales companies, in which the WTO trade panel awarded Europe the right to impose $US4 billion of trade sanctions, by finding in an interim decision today that steel tariffs President Bush imposed last year were also illegal. Meanwhile US airlines have their hands out again, and Republican senators are supporting a $US3 billion aid package to tide them over the Iraq war period.

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Snapshot on world business, week to 29 April 2001

Latest: US Q1 gdp up 2%, Germany weak link in stronger Europe, Japanese output falls, national interest defeats Shell bid for Woodside, Village Roadshow sells rest of European assets, Jardine Matheson battle resumes.

29 April 2001

The US gross domestic product rose 2% in the first quarter, double economists’ expectations, after a 1% December quarter rise and 2.2% rise in the September 2000 quarter. Exports fell 2.2%, after falling 6.4% in the December quarter and mostly low-double-digit returns in the previous four quarters. Imports fell 10.4% after falling 1.2% in the December quarter. That was a turnaround from mostly high-double-digit import growth in the previous six quarters. In sum, there’s some US consumer resilience, but yes: they are putting up the shutters.

Most European countries remain on a stronger growth path, with an average 2.5% gain expected this year, 3% in France, but a forecast reduction in Germany from 2.75% to 2%. The German average through the 90s was only 1.5% growth/year, held back by continuing disintegration of East Germany.

Japan’s industrial output fell 2.1% in March, 3.7% in the first quarter, inventories rose 1.1% in February, 0.7% in March. The Japanese CPI fell 0.4% in the March year.

26 April 2001

Jardine Matheson Holdings Ltd’s controlling Keswick family has rejected restructuring proposals from the largest minority shareholder, Brandes Investment Partners of San Diego, in an addendum to the notice of 17 May’s annual meeting. Chairman Henry Keswick said his view remained that the Brandes resolutions wouldn’t create either medium or long-term shareholder wealth. He said Jardine Matheson achieved 17% compound average annual growth in $US shareholder returns over the past three years and 18% over the past 10 years. The seven Jardine Matheson core businesses include property (and including Colliers Jardine), hotels and supermarkets (Dairy Farm International/Woolworths NZ).

23 April 2001

The Australian Government has turned down Shell’s $A10 billion bid for Woodside Petroleum. Treasurer Peter Costello said it would be against the national interest for Shell to control the operator and its joint venture partner in the North West Shelf gas project. He weighed up the national interest of maximising value from this project against possible corporate strategies which would pit this project unfavourably against competing projects elsewhere in the world — the kind of reasoning which has been rejected by New Zealand governments in their support of foreign big business since 1984.

Melbourne-based Village Roadshow has sold its remaining European cinema interests for $A94 million, using $A49 million to reduce debt. It profited from its Athens sale and achieved book value in Switzerland and Hungary. The entertainment company has already sold out of Germany, Hong Kong and the Village Entertainment Property Trust.

Jardine Matheson’s value could rise 80% if the controlling Keswick family gave in to rebel shareholder demands, according to a report from Salomon Smith Barney last Friday. The main rebel, San Diego-based Brandes Investment Partners, has 10.5% of Jardine Matheson and 2.3% of Jardine Strategic Capital, and will present resolutions again at the 17 May annual meeting in Bermuda to unravel the structure which keeps the Keswicks in control.

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Snapshot on world business, week to 3 February 2002

29 January 2002

US undersea cable operator Global Crossing has filed for chapter XI bankruptcy protection, declaring $US22.4 billion of liabilities but only $US12.4 billion of assets. Two Asian operators, Hutchison Whampoa of Hong Kong and Singapore Government-controlled Singapore Technologies Telemedia, have stepped into the breach, planning to take 37.5% each of Global Crossing for $US375 million each. Their takeover is conditional on US court confirmation of a reorganisation plan by August. Global Crossing lost $US3.4 billion in the September quarter and is due to report its December result on 26 February.

Singapore’s gross domestic product fell 2.2% last year, headed by an 11.5% fall in manufacturing. The country’s economic development board said electronics output fell 21.4%, but biomedical science output rose 10%.

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Snapshot on world business, week to 12 May 2002

12 May 2002

National Australia Bank Ltd increased net profit 11% to $A2.256 billion in the March half on strong regional results. New Zealand rose 31%, Asia 33%, Australia 22% & Europe 18%. Bank ratios included the cost to income ratio for banking operations down 140 basis points to 48%, return on assets significantly higher at 1.2%, capital position strengthened to a tier 1 ratio 7.9%.

8 May 2002

The Enron scam gets worse: Californian state officials are seeking to recover billions of dollars after documents suggest collapsed energy trader Enron created an appearance that the state’s power grid was congested, then arranged for the state to pay Enron to relieve the supposed congestion.

Dutch pension fund ABP Investments US Inc has appointed Lend Lease Hyperion Capital Advisors to manage a new below-investment-grade commercial mortgage-backed securities (cmbs) account. ABP is one of the biggest pension funds in the world. Lend Lease Hyperion is a joint venture between Lend Lease Real Estate Investments and Hyperion Capital Management. It focuses exclusively on managing cmbs investments.

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