ASX ends up 1.3% at 5-week high after James Packer cops another grilling
James Packer opened up at the Crown inquiry, while the ASX surged to a five-week high following the business-friendly budget.
- ASX closes at 5-week high
- AGL takes first strike, slashes guidance
- Budget supportive of equities: Macq
- APRA welcomes super shake-up
Australian shares surged despite a shaky start, after Wall Street tumbled when Donald Trump suddenly called off talks on a new economic relief package. The S&P/ASX 200 surged 1.3 per cent to 6036.4 points, its best close in 5 weeks, with stocks exposed to the domestic economy outperforming after the budget. James Packer continued to give evidence in the Crown casino inquiry.
8.06pm: New US cases top 40,000
The number of new coronavirus infections reported in the US rose from a day earlier, as the president halted negotiations on a new relief bill.
The US reported 43,563 new cases Tuesday, according to data compiled by Johns Hopkins University, up from 39,562 on Monday and 35,504 on Sunday. There have now been more than 7.5 million cases reported in the U.S. overall, and nearly 211,000 people have died.
For the first time in a week, the US seven-day moving average was larger than the 14-day moving average as of Monday, 43,981 to 42,470. When the seven-day is larger than the 14-day, it suggests cases are increasing.
World-wide, more than 35.8 million people have been infected and nearly 1.05 million have died, according to the Johns Hopkins data.
8.01pm: Spending to create jobs makes sense: Evans
The 2020 federal budget was like no other, but we might need more bold decisions to right the ship, says Westpac’s Bill Evans.
The 2020 federal budget was like no other.
After only last year getting to within a whisker of a surplus, it is now staring into stunning deficit and debt profiles as restrictions to contain the pandemic cast a long shadow over the economy.
Even by 2023-24, when Treasury expects the deficit to have improved to $66.9bn, the budget deficit would still be weaker in dollar terms than at the peak of the GFC.
But the government is rightly playing its role in supporting household incomes, incentivising business investment and boosting infrastructure during this once-in-a-century shock. At 11 per cent of GDP, the 2020-21 deficit of $214bn is around the same proportion of GDP as most other developed nations. And as the Treasurer noted, net debt as a share of the economy is expected to peak at $966bn, or 43.8 per cent of GDP — half Britain, about a third of the US and about a quarter of Japan.
Importantly, interest payments on that debt as a proportion of GDP are actually expected to fall due to record low long-term bond rates. Financial markets are telling governments around the world they can run up debt to previously unthinkable levels to fill the hole created by the pandemic, due to a chronically weak outlook for growth and inflation.
Positively, the central theme of budget 2020 was job creation, aiming to boost demand and business investment while moving away from the blanket temporary income supports such as JobKeeper to more targeted policies aimed at encouraging new hiring.
As Westpac foreshadowed in its budget preview, the government brought forward Stage 2 of its income-tax plan by two years by applying it retrospectively from July 2020. In a minor surprise, Stage 3 of the tax plan wasn’t also brought forward to July 2022, a move the budget could have afforded (an annual cost of about $15bn out to 2023-24) and which would have further boosted incomes and demand.
Still, bringing forward Stage 2 and extending the Low and Middle Income Tax Offset for those earning up to $90,000 will boost incomes by $17.8bn over two years.
The real surprise was the sheer size of the government’s initiative to kickstart business investment.
7.48pm: Germany hits the brakes
Germany’s economic momentum stumbled in August, as industrial production in Europe’s largest economy unexpectedly fell back after three months of growth, official data showed Wednesday.
Industrial production declined 0.2 percent month-on-month in August, compared with a climb of 1.4 percent in July, federal statistics agency Destatis said.
The data marks an interruption of the consistent recovery seen since the lifting of pandemic restrictions in the spring, and is well below a forecast increase of 1.5 percent in an analysts survey by Factset.
“German industry is clearly struggling to gain further momentum,” said ING economist Carsten Brzeski, who called the data a “first setback” for the nation’s economy since the easing of coronavirus lockdowns.
In Germany’s all-important car industry, production fell 12.5 percent compared with the previous month -- partly due to summer shutdowns -- and sank to around 25 percent below the level of February 2020, the month before restrictions were imposed in Germany due to the pandemic.
Meanwhile, total industrial production in August was down 9.6 percent compared with the same month a year earlier.
6.25pm: Tokyo closes flat
Tokyo stocks closed flat on Wednesday after US President Donald Trump postponed talks on a new stimulus plan, while investors reacted positively to Japanese government subsidies for the hospitality sector.
The benchmark Nikkei 225 index inched down 0.05 per cent, or 10.91 points, to end at 23,422.82, while the broader Topix index edged up 0.04 per cent, or 0.72 points, to 1,646.47.
“Tokyo shares opened lower following losses on Wall Street but there were expectations on local economic recovery with the ‘Go To’ tourism campaign,” Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.
The government scheme was launched to help revitalise the virus-hit travel and leisure industries around the country, and was extended to also include Tokyo businesses from October.
AFP
6.09pm: Tesco profit surges
Britain’s biggest retailer, supermarket giant Tesco, announced Wednesday a 42 per cent jump in net profit in its first half on soaring online demand for food during the coronavirus outbreak.
Profit after tax jumped to £460 million in the six months to the end of August, compared with £324 million a year earlier, Tesco said in a statement.
This came despite exceptional costs of £533 million in response to the pandemic, notably the creation of 16,000 jobs to meet the growing online demand.
Sales were fuelled by Britons increasingly switching from Tesco’s largest stores to having their groceries delivered.
“Growth in the half was most marked in online with sales up 69 percent, with the rate of growth reaching 90 per cent during the second quarter,” Tesco said.
Britain began emerging in June from a nationwide lockdown that had lasted nearly three months.
Tesco added that sales at its small convenience stores grew 7.6 percent in the reporting period, with people working from home grabbing, for example, a sandwich at lunchtime.
Sales grew 1.4 percent in its big traditional stores visited by “customers seeking to shop less frequently whilst buying more on each visit”, Tesco added.
AFP
4.30pm: ASX ends up 1.3%; 5-wk high
Australian shares rose strongly Wednesday in a bullish reaction to the budget.
After a brief dip to 5944.7 after sharp falls on Wall Street as President Trump halted US stimulus talks, the S&P/ASX 200 rose steadily to a 5-week high of 6043.8 before closing up 1.3 per cent at 6036.4, its best close since September 3rd.
After rising the past three days the index has gained 4.2pc so far this week as investors reacted to a news of fiscal initiatives culminating in Tuesday’s announcement of a record $41bn stimulus in 2020/21 and $111bn over 4 years.
Shares of companies most reliant on the domestic economy - including banks, retailers, property trusts, and construction and infrastructure-related companies - were among the best performers.
Westpac rose 2.6 per cent, Wesfarmers gained 2.5 per cent, Woolworths rose 2pc, Goodman Group gained 1.7pc, Cleanaway climbed 4.8 per cent, and Macquarie Group rose 2.9 per cent.
Lachlan Moffet Gray 4.26pm: Packer questioned on Melco dealings
Mr Bell has asked Mr Packer whether he was aware Mr Johnston and Mr Guy Jalland had provided confidential information to Melco about Crown Resorts, prior to Melco taking a stake in the company.
“My recollection was that they provided information that said consensus was 2 per cent higher than actual in present year and 4 per cent above consensus forecast the following year,” Mr Packer said.
Mr Bell then asked Mr Packer whether at the time of the transaction he cast any thought back to the agreement he had with the NSW regulator regarding preventing Stanley Ho from taking an interest in Crown Resorts.
“I considered Melco Lawrence’s company, not Stanley.”
Mr Packer also said at the time of the deal, he had forgotten about the regulatory agreements with NSW.
“I thought that the legal work the CPH team...were preparing would cover all eventualities,” he said.
Mr Bell then asked Mr Packer if he knew that a private company connected to Stanley Ho, Great Respect, had a 20 per cent interest in Melco via convertible notes.
Mr Packer said he didn’t, but Mr Bell drew attention to remarks Mr Packer earlier today indicating he did in fact know.
“I’d forgotten Mr Bell, and I assume they’d have been picked up...” Mr Packer said, before Mr Bell interjected:
“The truth of the matter is you didn’t give a moment’s thought to the fact that Stanley Ho...had an interest at the time of this transaction,” Mr Bell said.
Mr Packer said he couldn’t recall before Commissioner Patricia Bergin cut across:
“It’s obvious you didn’t think about it Mr Packer, otherwise you would have done something about it, wouldn’t you?” she said.
Mr Packer said it was more to the fact he forgot about it rather than not turning his mind to it - but relented, and said they could be considered the same thing after questioning from Ms Bergin.
Mr Bell has now begun asking questions about remarks Mr Packer made to Mr Ho about the two becoming partners again following Melco’s acquisition of a 10 per cent stake in Crown Resorts.
“I believe I am partners with all Crown shareholders,” Mr Packer said.
Mr Bell also asked questions about the termination of the execution of the full Melco-Crown deal, asking why he allowed it to go ahead when the deal locked in a share price for Crown of $13 when they were trading on the ASX for $11.
“I would never hold Lawrence to something he didn’t want to do,” Mr Packer said.
“I recall Mr Ho saying he didn’t want to proceed...or that it was too difficult, or something like that.” Mr Packer said, also claiming he could not recall the specifics.
Commissioner Patricia Bengin asked Mr Packer if he and Lawrence Ho ever discussed the potential link between Stanley Ho, Melco and Crown.
“I can’t recall commissioner,” Mr Packer said after a sustained pause.
Mr Bell said he had no more questions and the inquiry began to wrap up when Mr Packer suddenly asked to clarify his answer regarding Lawrence Ho’s reasons for not proceeding with the full deal.
“Mr Ho mentioned that COVID was a once in a 100 year threat to the casino business...and he also wanted to concentrate his efforts on bidding for a license in Japan,” he said.
James Packer will return to the witness box at 10am on Thursday.
Lachlan Moffet Gray 3.53pm: Packer questioned on dealings with Ho family, CFO
Counsel Assisting Adam Bell has returned to the subject of the Ho family.
Reading from emails between Mr Packer and Lawrence Ho, Mr Bell asked what Mr Ho meant when he said he would discuss certain issues while attending a Belt and Road forum in Beijing.
“I discussed with Mr Ho whether he could get a sense of the Macau regulator authority’s opinion on Crown,” Mr Packer said.
Mr Bell asked when Mr Packer first discussed the purchase of Crown resort shares by Mr Ho.
Mr Packer said it occured on the 23 of April 2018.
“The substance of that conversation was Lawrence briefly touched on a full merger between Melco and Crown. It quickly got to the position where that didn’t suit him and it really didn’t suit me.
“Lawrence was interested in doing something with the Crown if we could make it work. He believed in the assets.
“At that point Mr Ho, or Lawrence, and myself, delegated the conservations to our respective CEOs.”
Mr Bell has asked Mr Packer whether requests made of Crown CFO Ken Barton to supply him with financial forecasts was so Mr Packer could construe a potential sale price for his Crown Shares to Lawrence Ho.
Mr Packer denied that.
“Why did you ask for a financial forecast that he believed in?” Mr Bell asked.
“Because it was his job,” Mr Packer said.
Commissioner Patricia Bergin interjected, asking why it was Mr Barton’s job as CFO of Crown to provide the figures to a shareholder on demand.
Mr Packer said that at that time, Crown was in the middle of an annual budgeting process.
Mr Bell then moved to read email discussions between Mr Packer and Michael Johnston over alternatives to Mr Packer selling 19.9 per cent of Crown to Melco.
Asking why Mr Johnston wanted to explore alternatives, Mr Packer said: “Because he thought $13 was too low a price.”
Lachlan Moffet Gray 3.23pm: Packer continued to instruct board after resignation
Mr Bell has continued to read emails that appear to show Mr Packer giving instructions to members of Crown’s executive team after he resigned as chair and as a board member.
In one email, Mr Packer tells Crown CFO Ken Barton:
“Make sure for your own sake we achieve the FY20 plan.”
He then forwarded the email to other Crown executives and said:
“Sorry Ken, I mean everyone.”
Mr Bell asked Mr Packer whether he was threatening the executives.
“No, I was saying I expected them to hit their budgets,” Mr Packer said.
“I was frustrated because I had been saying for a good part of the previous financial year that people were being too optimistic.”
Mr Packer said his remarks could have just been him being “dramatic”.
Mr Bell asked Mr Packer whether he thought it was in the best interests of Crown Resorts that his requests be followed.
Mr Packer agreed.
“I thought it was the best interest of Crown Resorts to have conservative budgets and keep costs under control,” Mr Packer said.
Mr Packer has told the inquiry that he believed any “requests” he made to Crown executives while no longer a board member was in the interest of other shareholders.
“I believed I was fully aligned with Crown Resorts shareholders and my requests were in all shareholders’ best interests,” he said.
Counsel Assisting Adam Bell again asked Mr Packer whether he fully expected his requests to be followed at all times.
“I expected them to listen to me and push back if they disagree,” Mr Packer said.
Mr Bell asked Mr Packer if that ever happened.
“I can’t recall,” Mr Packer said.
Mr Bell then asked if in issuing these recommendations Mr Packer was acting as if he was still director of Crown Resorts.
“I was under the impression that I could communicate the way I was communicating,” Mr Packer said.
Lachlan Moffet Gray 3.13pm: Packer probed on quiting Crown board
Counsel assisting Adam Bell is now asking Mr Packer about his decision to step down from the board of Crown Resorts and his private director Consolidated Press Holdings in March of 2018.
Mr Bell asked, and Mr Packer confirmed, that after this point he was still receiving confidential information about Crown’s commercial activities through the company’s executive team, “practically on a daily basis” through a shareholder protocol.
Furthermore, Mr Packer said “on at least one occasion” he emailed CFO Ken Barton if the daily information was not relayed to him in a timely manner.
Mr Bell also asked whether Crown employee Todd Nisbet kept Mr Packer up to speed on a number of other issues, including Crown’s sightline litigation with infrastructure NSW, to which Mr Packer answered in the affirmative.
Mr Packer was also referred to updates on the company provided to him by other Crown executives including John Alexander and Andrew Demetriou.
Mr Bell asked Mr Packer if he expected to be kept up to date by his team. After a long pause, Mr Packer replied: “yes.”
Mr Bell then asked Mr Packer if he issued instructions in addition to receiving information.
“Not to the best of my recollection,” Mr Packer said.
Following Mr Packer’s claim that he cannot recall whether he issued instructions while no longer on the Crown board, Mr Bell read out an email where he appeared to have given explicit instructions to Crown executive John Alexander.
He then followed by reading a similar email directed at Ken Barton where Mr Packer asked the CFO to prepare a financial forecast.
“You asked him to prepare something for you, that you could bank,” Mr Bell said.
“Those are the words in the email, Mr Bell, so yes,” Mr Packer replied.
Mr Bell then read out an email already presented to the inquiry wherein Mr Packer described Mr Alexander for taking a world trip to visit restaurants as “excessive” and inferred that these could also be considered instructions.
Mr Packer said he was presenting his opinion, but Mr Bell read responses from Mr Alexander that showed he was ready to act on Mr Packer’s advice.
He also read a further email from Mr Packer where he gives Mr Alexander his “blessing” to cut costs.
Mr Packer said that he was merely agreeing with cost cutting proposed by Mr Alexander.
“I expected Mr Alexander to act on what he said,” Mr Packer said.
3.08pm: ASX continues to rally
Australia’s share market has continued to surge on the back of a highly stimulatory federal budget.
After a brief dip after overnight falls following US President Trump’s call for a halt to US stimulus talks, the S&P/ASX 200 has surged 1.1pc to a 4-week high of 6029.84.
Not only has it broken above its 50-day moving average at 5993, the index has tentatively regained its 200-day moving average, currently at 6027, for the first time in almost 5 weeks.
The index hasn’t traded significantly above this line since February.
Index last up 1.1pc at 6028.
Geoff Chambers 2.45pm: NSW gets coal power boost
A major upgrade of the Vales Point coal-fired power station has been backed by the Morrison government in a bid to fast-track an additional 30MW into the electricity market and reduce emissions by more than 1 million tonnes.
Energy Minister Angus Taylor has allocated $8.7m in support of Delta Electricity’s upgrade of its 1320MW Lake Macquarie coal plant, which currently provides 13 per cent of NSW’s generation capacity.
The power station upgrade, one of 12 projects short-listed under the Morrison government’s Underwriting New Generation Investments program, will not extend the coal plant’s life beyond its planned closure in 2029.
Under an ad hoc grant process, Delta Electricity will need to submit a grant application to the Department of Energy to support its plant upgrade and “reduce emissions, improve efficiency and improve reliability”.
Mr Taylor said the additional electricity output from the NSW Hunter Region power station would contribute to the government’s 1000MW target.
“The Vales Point power station is a major supplier of electricity in NSW. This grant will make Vales Point more reliable, more efficient and deliver much needed dispatchable power in NSW,” Mr Taylor said.
Lachlan Moffet Gray 2.42pm: Crown casino inquiry resumes
The NSW Independent Liquor and Gaming Authority Inquiry into the operations of Crown Resorts has returned from an abrupt adjournment.
James Packer is again answering questions from Counsel Assisting Adam Bell, who is continuing where he left off: asking Mr Packer questions about the extent of his knowledge of the deed of arrangement between the board and Crown Resorts.
The deed contains stipulations stating Crown Resorts must monitor to ensure parts of the company does not come into direct or indirect ownership of controversial Chinese gambling magnate, the late Stanely Ho.
It is relevant because Mr Packer last year announced plans to sell half of his stake in Crown to Stanley’s son, Lawrence Ho, with whom he also had a JV in Macau through Ho’s Melco group.
Earlier Mr Packer told the inquiry that he knew Stanley Ho had an interest in Melco through a private company named Great Respect as early as 2006.
The deed of arrangement between Crown and the NSW government is what Crown’s Barangaroo Casino and Hotel’s license to operate is based on. If this inquiry doesn’t go well, it could be revoked.
1.50pm: Aussies ditch their credit cards
Australians have paid $6.34 billion off personal credit card debt since March, according Canstar’s research of the latest Reserve Bank data.
Meanwhile businesses have knocked $324.7 million off credit card debts over the same period.
For the month of August, Australians had 84,801 fewer personal credit card accounts compared to the month prior month.
“The decline in credit card balances accruing interest has been relentless throughout the pandemic,” said Canstar finance expert Steve Mickenbecker.
“Even if necessity might see some bounce back into debt, it is clear that the penny has dropped and people are looking for their way out of credit card debt.
“With the number of personal card accounts also down, by over 580,000 since March, it looks as if people have every intention to avoid a recurrence of credit card debt.
1.48pm: Govt should be commended on budget: Adbri
Adbri chief executive Nick Miller says the government’s budget will support job creation and stimulate economic growth.
“Combined with the recent positive progress in gas policy, the investment directly into state infrastructure projects while encouraging business investment through tax write-offs for critical assets will help drive competitiveness, efficiency and support Australia’s economic recovery,” he said.
“Investment in priority infrastructure projects can help secure jobs for thousands of Australians in the short term and importantly benefit future generations through much needed investment in road safety, rail upgrades, water security and regional development.
“In particular, the investment flows into regional transport safety improvement projects can be delivered without complex procurement processes, meaning jobs and economic stimulus can be secured almost immediately.”
Adbri, formerly known as Adelaide Brighton, produces construction materials and lime.
1.39pm: Shares surge on “go Australia” budget: AMP
Australian shares are surging after a “go Australia” budget, according to AMP Capital Portfolio Manager Dermot Ryan.
“This year’s federal budget is a go Australia moment like no other and business is leading the charge,” he says
“Business spending stocks – like auto and equipment exposed sectors - are all up strongly.
He notes that business and middle-income support packages accounted for half the $100bn spending in the Morrison government’s recovery budget.
“This is a big win for real businesses with a domestic focus,” Mr Ryan says.
“Business is getting fired up across all sectors with spending, tax and hiring incentives, which will help those who can to grow and prosper again.”
He also notes that the retail, property, healthcare, agriculture and construction will be able to access the JobMaker program and boost youth employment.
And he sees room for stimulus measures to support tourism, migration and mobility, once the path is clearer on a vaccine/containment strategy.
“The budget measures are set to fire up demand and should get the country up and running and on the road to recovery.”
The S&P/ASX 200 was last up 0.9pc at 6013.2 after hitting a 4-week high of 6020.
Robyn Ironside 1.36pm: Virgin administrators claim court victory
Virgin Australia’s administrators have won their appeal against a Federal Court ruling that would have seen them liable for the cost of returning leased aircraft engines to the US.
In a significant victory for Deloitte, the Full Court of the Federal Court found the original judge had erred in his interpretation of the term “to give possession”.
Deloitte’s lawyers argued that the term meant they had to make leased engines and aircraft available to their owners for collection, rather than to redeliver the machinery in accordance with the original contract.
The administrators were concerned that in the current pandemic it would not only be difficult and expensive to return the engines to Florida by the deadline date of October 15, but the ruling would open the floodgates to other lessors to demand the same.
Court documents showed Virgin Australia had 78 leased aircraft and engines, with the cost of redelivering all of the items estimated to be considerable, and likely to further reduce the amount of money able to be returned to unsecured creditors.
Read more: Virgin to avoid costly engines return
Eli Greenblat 1.19pm: Lew welcomes federal budget measures
Retail billionaire Solomon Lew is the latest corporate leader to welcome Tuesday night’s Budget, calling it a “shot in the arm” for job growth and one of the best crafted budgets he had seen in his long business career.
“In my business career I have never witnessed such a well-thought out budget, one that benefits nearly every single business in the country,’’ Mr Lew, who is also chairman of Premier Investments said on Wednesday.
“It cannot be understated just how much this will provide a shot in the arm to employment, youth job creation, consumer confidence and spending. This budget will help bring the Australian economy out of the doldrums and back to where it needs to be.
“Treasurer Frydenberg and the Morrison Government should be commended for delivering such a formidable, and importantly manageable, budget that will provide a much-needed boost to national economy and the broader retail environment.”
Joyce Moullakis 1.01pm: Lloyd to exit NAB after MLC deal
National Australia Bank’s MLC boss Geoff Lloyd will part ways with the bank at the end of October, after the division was sold to wealth group IOOF in a $1.44bn transaction.
Mr Lloyd joined advice and superannuation group MLC two years ago to lead changes ahead of a planned separation from NAB, which was replaced by a divestment of the business to IOOF announced in August.
MLC’s chief corporate services officer Andrew Morgan will take over the division’s operations while NAB works toward completing the sale to IOOF.
“This is a natural progression and reinforces the focus he brought to the process and to achieving the best outcome for customers, colleagues and shareholders. Having completed the task with distinction, he is now able to take some well-deserved time and consider his next role,” NAB chief executive Ross McEwan said in a memo to staff on Wednesday.
“In his time with us, Geoff has built the highest quality leadership team and set about building, communicating and driving a strategy that gave clarity to refocus, modernise and grow.
“The team has significant momentum with the wrap business back into net inflow, significantly increased client NPS (net promoter score) and reduced longstanding outflows on the master trust business.”
Mr McEwan said Mr Lloyd had led MLC through a challenging period as his team worked through 16 programs for customer compensation payments, the unit’s separation from the bank and the difficulties associated with the fallout of COVID-19.
12.57pm: Budget measures lift ASX
The local share market has surged 0.9 per cent to a four-week high of 6013.6.
The budget seems to be the driving force, with the S&P 500 down 1.4pc overnight.
Stocks that will benefit from faster economic activity and infrastructure spending are among the best performers with Wesfarmers up 2.7pc, Woolworths up 1.9pc, CBA up 1.1pc and Macquarie up 2.3pc.
A big increase in fiscal stimulus in the federal budget contrasts with a lack of new stimulus in the US, with President Trump calling off talks on more stimulus until after the election.
If it closes above last week’s high at 5995.4 today, the index will have formed a “double-bottom” pattern which could lead traders to expect a further rise to about 6120 in the short-term.
The 200-day moving average still offers resistance at 6115.
Bridget Carter 12.42pm: Analysts back Northern Star, Saracen merger
Gold mining analysts have largely thrown their support behind Northern Star Resources’ $16 billion merger with Saracen Mineral Holdings.
However, analysts at Citi say that Saracen will need to sell the ‘merger of equals’ to its shareholders as a valuation uplift to make it look attractive, given the absence of a premium.
But Citi estimates the valuation uplift for Saracen following the deal is 15 per cent compared to 6 per cent for Northern Star.
“In our view, it’s better to be together - a combined entity makes sense, especially in Western Australia and would position MergeCo for a valuation re-rate,” the analyst said in a research note.
On Tuesday, Northern Star and Saracen, which both already jointly own the Kalgoorlie Super Pit gold mine, announced a merger deal where Saracen shareholders would receive 0.3763 Northern Star shares for every Saracen share held.
Saracen would also pay a special, fully franked dividend of 3.8c each.
The deal is expected to result in synergies worth $1.5bn to $2bn over ten years.
Analysts at Goldman Sachs said the proposed merger was consistent with the strategy for both companies, benefitting from a complementary asset base and management style.
“The merger would combine the two best organic growth profiles in the Australian gold sector,” the Goldman Sachs analysts said in a research note.”
Citi analysts said that based on their assumptions, the newly merged entity would be 6 per cent earnings per share accretive and cash earnings per share accretive of between 10 to 11 per cent to Northern Star shareholders in the 2021 to 2022 financial year.
The newly merged company operating under the Northern Star banner would be the ninth-largest gold producer by production and a close-second on the ASX behind Newcrest Mining, capitalising on the thematic that generalist investors reward scale.
Analysts at UBS said that the merger was a rare example of a mining merger that had clear and material synergies to unlock.
They said that the deal would offer scale, asset diversity, with three production centres located in tier one locations and sector leading production growth of about 5 per cent per annum.
Lachlan Moffet Gray 12.25pm: Packer grilled about Ho links
James Packer has been questioned about Crown’s venture with the Ho family outfit, Melco, and what he knew about the late gambling magnate Stanley Ho.
Through a series of questions, casino inquiry counsel assisting Mr Bell attempted to establish the extent of Mr Packer’s knowledge regarding Mr Ho’s interests in Melco, which in April sold its stake in Crown.
After being presented with transcripts of old interviews with the Victorian gambling regulator in 2006, Mr Packer said he was aware that Mr Ho held a 10 per cent interest in Melco through various trusts and investment vehicles.
Last year Crown announced a plan to sell half his stake in Crown to Melco resorts, a controversial decision as Melco’s boss, Lawrence Ho, is the son of Stanley Ho - a man blacklisted from controlling gambing interests in NSW due to his alleged links to organised crime.
The younger Mr Ho and James Packer previously ran a joint venture in Macau through Melco.
Mr Packer’s attention was called to a Melco annual report from 2006 which outlines the share ownership of Melco international.
The report showed that Stanley Ho was the beneficiary of more than $100m Melco convertible notes through a private company called Great Respect that could be converted upon the completion of the City of Dreams casino-hotel in Macau.
Mr Bell asked if Mr Packer was aware of this, to which Mr Packer responded in the affirmative.
Mr Bell then asked about Mr Packer’s knowledge of Crown’s regulatory arrangement with the NSW Independent Gaming and Liquor Authority.
Within the arrangement with the NSW Independent Gaming and Liquor authority was a clause requiring Crown to monitor and report any interests in Crown that may be acquired by Stanely Ho.
Mr Packer said he did not have detailed knowledge of the arrangement with the NSW authority.
Commissioner Patricia Bergin interjected to adjourn the proceedings until 2.30pm.
Mackenzie Scott 12.10pm: Victoria sees spike in housing demand
Housing demand rose spiked in Victoria last week in response to the easing of restrictions on Melbourne’s real estate industry, according to Realeatate.com.au.
The site’s Weekly Demand Index, which measures high-intent buyer activity, showed demand rose 24.5 per cent last week in Victoria to become the largest increase in the state since the first week of January in 2019.
Activity had already begun to increase (up 6.8 per cent) in the week leading up to the August 2 easing of restrictions, which allowed real estate agents the opportunity to show people through properties one-on-one for the first time in eight weeks.
REA Group’s director of economic research Cameron Kusher expects the trend to continue.
“Over the coming weeks I expect further increases in demand in Victoria and stronger overall demand in other states with no upcoming long weekends,” he said.
The national index recorded its strongest rise in 16 weeks as a result of the burst in Victorian activity, up 4.4 per cent last week.
Western Australia also recorded a rise in demand of 1.1 per cent, while the ACT (down 8.4 per cent) and South Australia (down 4.7 per cent) recorded the largest falls.
12.08pm: ASX hits 6-day high
The Australian share market seems to be getting a boost from a business-friendly and highly stimulatory federal budget, although it was mostly as expected.
The S&P/ASX 200 was up 0.3pc at 5983.1 after hitting a 6-day high of 5988.1 in morning trading.
If it ends above 5964.92 today this will be the best close in four weeks.
“We believe this pro-growth budget is supportive for equities,” Macquarie Equities said in a report.
Shares are also benefiting from expectations of further domestic monetary policy stimulus after the RBA meeting yesterday.
Reflecting that speculation, the 3-year government bond yield fell as much as 4 basis points to a new record low of 12.2 basis points.
Significantly, the rise in local shares came despite a 1.4pc fall in the S&P 500 and a 0.2pc fall in futures this morning after US President Trump said he would stop fiscal stimulus talks until after the election.
Share trading volume in Australia remains well below average amid NSW school holidays, but the outperformance versus Wall Street is nonetheless encouraging.
The Consumer Discretionary sector is leading broad-based gains with AP Eagers up 4.5pc after flagging a 17pc rise in first-quarter sales and Wesfarmes up 2pc.
The major banks rose as much as 0.7pc. Materials lagged with Newcrest down 3pc after a retreat in gold prices.
Bridget Carter 12.03pm: Booktopia priced at $350m for IPO
Australia’s largest online book retailer Booktopia is on track to price as a company worth more than $350 million including debt for its initial public offering, say sources.
The pricing will equate to between 4.5 times and 5 times its gross profit.
It comes after meetings were held with investors last week about the up-coming IPO of the online book retailer.
Chief executive and co-founder, Tony Nash, is expected to retain his stake in the business once listed and all of the senior management and shareholders will stay on after the float.
The sell down is expected to be relatively modest, with a small amount raised.
For the 2021 financial year, the company’s revenue is expected to be about $200m.
Booktopia’s prospectus is due out in November ahead of its listing in December.
Online retailers such as Booktopia and Adore Beauty that are preparing to float have experienced soaring sales amid COVID-19.
Booktopia made efforts to list in 2016, seeking to raise $40m to float with a $100m market value, but those plans were later shelved.
Working on the listing this time is Shaw and Partners and Morgans.
Operating for 16 years, Booktopia has a customer database of 4.5 million, with 1.4 million active customers.
It sold more than 6.4 million books in the 2020 financial year.
Lachlan Moffet Gray 11.50am: Packer questioned on remuneration
The inquiry has resumed and Counsel assisting Adam Bell has asked Mr Packer whether it is true that three Crown executives knew about the questioning of an employee by Chinese police in Wuhan but did not inform him about it.
“I’m sure,” Mr Packer said.
Mr Bell then asked Mr Packer if he could have forgotten whether he had been told or not. On Tuesday, Mr Packer told the inquiry that he takes “strong medication” that impacts his memory.
Mr Packer said: “No, I would have emailed Mr Cragie and Mr Rankin in the first instance and said what’s happening, or ask for an explanation.”
Mr Bell then mentioned a proposal to install Mr Packer as head of the global VIP business, for which he would be paid $11.5m.
The plan never materialised.
Mr Packer said he could not recall if he was aware of this in December and January of 2015-16 as he was particularly unwell at that time.
Discussing a board meeting that occured in March of 2016, Mr Bell, mentioned that an item for discussion involved the firm Hellman and Friedman process update.
He asked Mr Packer if there was a proposed takeover of Crown Resorts by Hellman and Friedman.
“I don’t know if I would use the word takeover - they were looking at a financial restriction and a capital injection,” Mr Packer said.
“I can’t remember if it was a full privatization or if it was the privatisation of the Australian assets.”
On Tuesday Mr Packer answered questions about a confidential email thread that involved a “Z co.” interested in a takeover of Crown.
Mr Packer admitted to “shameful” behaviour directed at a Mr X from Z Co within the emails, pinning his behaviour on bipolar disorder.
Mr Bell asked whether at the time, Mr Packer’s private company Consolidated Press Holdings did not agree to a service agreement with Mr Packer given the agreement with Hellmen and Freedman.
CPH didn’t want to agree with the service agreement with you at this time given the current process agreement with Hellman and Friedman.
Expanding on the previously mentioned service agreement between Consolidated Press Holdings and Crown Resorts, Mr Bell asked whether Mr Packer knew about the agreement and that it allowed CPH executives to collect fees for services provided to Crown.
Mr Packer said he was aware.
Mr Bell then asked whether Mr Packer was aware that the service agreement allowed CPH to obtain confidential information about Crown.
“I wasn’t sure exactly how I was accessing confidential information but I knew there was an agreement in place,” Mr Packer said.
Mr Bell then shifted to questioning Mr Packer about Crown’s venture with the Ho family outfit, Melco.
Through a series of questions, Mr Bell attempted to establish the extent of Mr Packer’s knowledge regarding late gambling magnate Stanley Ho’s interests in Melco.
After being presented with transcripts of old interviews with the Victorian gambling regulator in 2006, Mr Packer said he was aware that Mr Ho held a 10 per cent interest in Melco through various trusts and investment vehicles.
Last year Crown announced a plan to sell half his stake in Crown to Melco resorts, a controversial decision as Melco’s boss, Lawrence Ho, is the son of Stanley Ho - a man blacklisted from controlling gambing interests in NSW due to his alleged links to organised crime.
The younger Mr Ho and James Packer previously ran a joint venture in Macau through Melco.
11.40am: ASX turns positive
After a shaky start, the ASX turned positive in late morning trade, as Wesfarmers and CSL lifted strongly.
The market started slightly weaker after big US falls, following Donald Trump’s cancellation of stimulus talks.
The ASX was recently up 0.32 per cent at 5980.9. Wesfarmers was up 1.6 per cent and CSL up 0.5 per cent.
Among the major banks, Commonwealth Bank was up 0.6 per cent while Westpac was trading up 0.5 per cent and Macquarie was up 1 per cent.
BHP was weighing on the market, down 1.2 per cent at $35.85.
Nick Evans 11.31am: AGL in first strike, downgrade
AGL Energy has confirmed a major earnings downgrade for the current financial year, as the company took a first strike against its remuneration report.
Chief executive Brett Redman told shareholders at the company’s annual meeting today the company expected underlying after-tax earnings of $560m to $660m for the current financial year, well below the $816m in underlying profit last financial year – itself a 22 per cent drop on the previous period.
The expected year-on-year decline in earnings reflects the accelerating impact of the COVID-19 pandemic on a number of pre-existing market and operating headwinds,” he said.
Mr Redman said the “headwinds” included the impact of higher supply costs in its wholesale gas sales as legacy supply contracts mature, as well as lower year-on-year gas prices, and the impact of sharply declining wholesale prices for both electricity and large-scale renewable energy certificates.
As shareholders braced for reduced earnings from the energy major, AGL chairman Graeme Hunt told the meeting shareholders had also delivered a first strike vote against the company’s remuneration report, based on proxy votes cast ahead of the meeting.
Mr Hunt said concerns raised over the executive pay structure by influential proxy advisers and major shareholders had led to a significant vote against AGL’s remuneration report, and against the grant of long term incentive rights to its chief executive.
Read more: AGL cops first strike ahead of AGM
11.29am: Tokyo stocks open lower
Tokyo stocks opened lower, tracking falls on Wall Street after US President Donald Trump called off talks on a new stimulus plan until after the election.
The benchmark Nikkei 225 index was down 0.59 percent or 138.53 points to 23,295.20 in early trade, while the broader Topix index declined 0.62 percent or 10.16 points to 1,635.59.
AFP
Lachlan Moffet Gray 11.13am: Packer ‘incredibly upset’ with Crown culture
Commissioner Patricia Bergin has begun to discuss with Mr Packer the extent to which Crown’s drive for profits led to the arrests of 19 staff in China in 2016 and whether Mr Packer would have taken action to ensure their safety if he was aware of the risk.
“Am I to presume that if you were informed of the matters to which Mr Bell has taken you....you would have secured the safety of your staff?,” she asked.
“Absolutely Madame Commissioner,” Mr Packer said before launching into an uncharacteristic soliloquy.
“I would have taken a conservative approach with the best advice we could get - and I would have spoken to Mr Rankin, who was China expert, um, but there is no way we would - the VIP businesses is not a huge part of profitability of the overall business, as I know you understand that Commissioner,” he said.
“To put ourselves at risk on so many fronts for 7 per cent of our profit - I know that was a number that was used last week...just makes no sense.
“We tried as an organisation to build a very good culture. We were named employer of the year by the aus government three times between 2010 and 2014, I believe.
“I’ve always said there are four stakeholders in the business: there are government and regulators, there’s staff, there’s customers and community and there’s shareholders.
“If you do a good job on the first three of those stakeholders hopefully the shareholders come out ok as well.
“But this was not the culture of the company I was trying to build....and this was not the culture I believe existed to a significant extent.
“And for that I am incredibly upset.”
Commissioner Bergin then again asked if he would have taken action had he specific knowledge about the risk of Crown’s staff in China.
“Certainly if there was a risk of people being arrested and going to jail, absolutely,” Mr Packer said.
Commissioner Bergin asked Mr Packer whether it is possible Mr Packer was “kept in the dark” about the sovereign risk in China because staff felt they had to “please” Mr Packer.
Mr Packer denied this, saying he was often displeased in news relating to company budgets, and that he wanted to hear about all aspects of the business.
“I believe, Madam Commissioner, I always wanted bad news,” he said.
Ms Bergin then proceeded to ask about whether Mr Rankin knew about these risks, and why he didn’t share his knowledge with Mr Packer.
Mr Packer said he asked Mr Rankin to do “due diligence” regarding the risks in China shortly after the arrests of Korean casino staff.
The inquiry has adjourned for a 10 minute break.
11.10am: Goldminers backtrack on lower gold price
The major goldminers have lost ground in early trade on Wednesday after the price of gold fell overnight on a higher US dollar.
“Gold futures declined as the US dollar strengthened after talks between Democrats and Republicans on a fourth fiscal stimulus package before the November 3 election failed,” said Commonwealth Bank mining and commodities research director Vivek Dhar.
Newcrest last down 3.2 per cent at $30.06 while Northern Star is down 1.2 per cent at $15.11 and Evolution Mining is 2.5 per cent lower at $5.71.
The spot gold price fell 0.6 per cent to $1,903.97 overnight.
Lachlan Moffet Gray 11am: Packer accepts ‘some’ blame for failures
Mr Packer has claimed he did not have knowledge of a Chinese employee’s questioning by police in Wuhan and the requirement to send the Police a letter from the company, despite Barry Felstead, Michael Johnston and Ishan Ratnam all being aware of the issue.
Mr Bell asked Mr Packer if he agreed that it was “extraordinary” that the three executives failed to inform him of the issue.
“I don’t know if it’s extraordinary, it’s incredibly disappointing,” Mr Packer replied, before agreeing with Mr Bell that it represented a failure to follow the proper lines of reporting within Crown Resorts.
“Mr Felstead should have reported it to Mr Cragie and Mr Cragie should have asked Mr Felstead what was happening in China,” Mr Packer said.
Mr Bell then raised earlier comments by John Alexander at the inquiry which said the incident represented a corporate governance failure.
Mr Packer said he agreed with the statement.
Mr Bell then asked Mr Packer if he accepted responsibility for Crown’s failure in ethics, risk management and Corporate Governance.
“I accept some. Not all, but some.”
Mr Bell then asked if the failure was caused by an excessive focus on profits.
“I don’t agree with that,” Mr Packer said.
Mr Bell then asked what was the ultimate cause.
“I just don’t know Mr Bell,” Mr Packer said
Lachlan Moffet Gray 10.50am: Craigie ‘did not do his job’
Counsel assisting Adam Bell has asked Mr Packer if he knew Crown’s man in China Michael Chen was planning to source Singapore or Hong Kong work visas for Crown’s Chinese staff so they could “falsely” tell the Chinese authorities that they were working in China on a business trip.
Mr Packer said he was not aware of this and agreed with Mr Bell’s subsequent statement that the situation amounted to a failure of ethics, and that it should not have occured.
Mr Bell then read an email from Michael Chen to an external Chinese lawyer Kenneth Zhou about whether Crown should pull its people out of China and stop any executive from visiting the country in the wake of the gambling crackdown.
Mr Packer said he was not aware of the exchange.
Mr Bell then read advice from Mr Zhou to Mr Chen saying that executives should refrain from visiting mainland China and that an option for the regular staff could be moving them to an offshore location.
Mr Packer said he was not aware that this information was given and agreed with Mr Bell’s statement that executives should have known of it.
“I think it should have been elevated to the CEO and from the CEO to the board,” he said, agreeing with Mr Bell’s assertment that it amounted to a failure of the risk management process.
However, Mr Packer then levied the blame on Rowen Craigie.
“I believed Mr Cragie should have been on top of this information and should have brought it to the risk management committee, to the board to myself. I don’t know how he could not have been aware of this if he was doing his job,” Mr Packer said.
Commissioner Patricia Bergin has begun to ask Mr Packer whether he was aware Mr Falstead previously told the inquiry that he did not inform Mr Cragie of numerous important matters.
Mr Packer said he had not watched the specific inquiry.
When asked by Commissioner Bergin whether he could explain this, Mr Packer said:
“Mr Cragie must have been asking no questions - and I accept your proposition that Mr Falstrad accepts that he did not tell Mr Cragie - but for an incident like this, for a chief executive not to drill down especially when I had asked him to, is difficult to understand,” Mr Packer said.
Commissioner Bergin remarked that it would be difficult for Mr Cragie to drill down without being given “the tools” to do so. Mr Packer agreed.
Counsel assisting Adam Bell has begun to ask Mr Packer about his knowledge of certain events in China, including the 2015 questioning of a Crown employee in Wuhan by the Chinese government.
Eli Greenblat 10.45am: Woolworths chief welcomes budget support measures
Woolworths chief executive Brad Banducci has welcomed the federal government’s Budget on Tuesday night, saying it was a good roadmap to resuscitating the economy and creating jobs.
“We welcome the budget as a positive measure to move the economy back towards a path of sustainable economic growth and job creation,’’ Mr Banducci said on Wednesday.
“I wanted to particularly call out the increase in funding for mental health services, which are absolutely critical in supporting our collective wellbeing in these challenging times.”
On Tuesday night JB Hi-Fi chief executive Richard Murray also made positive comments about the Budget, saying it would help businesses to re-establish themselves and create jobs.
10.43am: Budget supportive of equities: Macq
Macquarie Equities says the federal budget is “pro-growth” and “supportive for equities”.
The broker continues to favour the resources sector and an “ongoing rotation to value.”
It backs an expansion of the transport infrastructure investment pipeline and housing stimulus as “Australia’s contribution to a global wave of fiscal stimulus focused on infrastructure and construction.”
Key local beneficiaries on infrastructure spending are expected to be Downer, Monadelphous, Cimic, Service Stream and Transurban, while construction spending favours CSR, Adelaide Brighton and Boral.
And Macqarie also sees a global wave of infrastructure stimulus “as positive for resource stocks” with more US stimulus expected after the presidential election.
Eli Greenblat 10.40am: Retailers mixed following budget measures
There was a mixed response by listed retailers following Tuesday night’s federal Budget that promises to inject tens of billions of dollars into households through tax cuts and other spending programs, as investors position themselves to win from retailers likely to capture that spending.
Shares in consumer electronics, white goods and housewares retailer Harvey Norman rose 3 cents to $4.68, consumer electronics rival JB Hi-Fi, which also owns The Good Guys, rose 36 cents to $47.40, and Wesfarmers whose businesses include Bunnings, Officeworks, Target and Kmart fell 11 cents to $44.82.
Among the supermarkets, Woolworths rose 10 cents to $37.13, Coles fell 2 cents to $17.41, and wholesaler Metcash rose 2 cents to $2.79.
Department store owner Myer shares were unchanged at 20.5 cents, while Super Retail Group, which has chains such as Rebel, BCF and Macpac rose 24 cents to $11.48.
Solomon Lew’s Premier Investments, which owns fashion brands such as Portmans, Just Jeans, Dotti and Peter Alexander, rose 8 cents to $22.18.
Lachlan Moffet Gray 10.37am: Crown staff fears ‘should have been elevated’
As James Packer gives evidence to the casino inquiry, counsel assisting Mr Bell tables evidence showing that Crown staff operating in China were scared of being arbitrarily detained prior to their arrest.
Mr Bell asked Mr Packer if he should have been aware of this.
“It should have been elevated to the board,” Mr Packer said.
Mr Bell, submitting an email to former CEO Mr Barry Felstead that showed he was aware of the staff’s concerns, asked whether attention to this issue should have been brought to people more senior than he.
“I agree,” Mr Packer said.
Mr Bell then changed his line of question to inquire as to whether Mr Packer was aware of the Chinese government’s attention to crack down on companies luring Chinese citizens overseas for the purposes of gambling in February of 2015.
“I can’t recall,” Mr Packer said.
Mr Bell has asked Mr Packer whether the Chinese government’s announcement in February 2015 that they would crack down on gambling junkets represented an “obvious escalation of risk to the safety of the staff in China.”
Mr Packer responded in the affirmative before being shown various gaming industry reports on the issue to see if he remembers reading them at the time.
“I can’t recall,” said Mr Packer before denying that Mr Barry Felstead and Mr Ishan Ratnam both informed him of the issue.
“I can’t recall when it became obvious and I do remember clearly, was at the time of the Korean arrests, which I think was in March 2015,” Mr Packer said, referring to the 2015 arrest of 13 casino managers by Korean police in an attempt to crack down on gambling junkets.
Mr Bell then proceeded to ask whether the failure of Crown to appreciate the implications of the announcement amounted to a lackluster risk management process.
“Do you agree that the failure to ensure that the crackdown on foreign casinos announced by the Chinese authorities in 2015 was drawn to the full board of Crown resorts...demonstrates a failure in the risk management of Crown Resorts at the time?” Mr Bell asked.
“Yes I do,” Mr Packer said.
“I believe Mr Rankin and Mr Cragie let the side down.”
Ben Wilmot 10.35am: Retail landlords could be budget winners: Maqu
Beaten down retail landlords could be winners from the federal budget’s stimulatory settings as income tax cuts and support payments to pensioners hit the tills.
Further benefits from temporary tax write-offs spread over three years for eligible capital assets acquired by businesses, should also boost retailers like JB Hi-Fi and Officeworks.
Macquarie Equities analysts Stuart McLean and Darren Leung said landlords like Aventus Group were likely key beneficiaries of these stimulus measures.
“We expect the dispersion in spend we are currently witnessing to continue (i.e. favouring consumer durables), with significant rent relief still required by traditional mall landlords given headwinds tenant categories such as services, cafes,” they said.
But the boost for the residential sector was dubbed “minor” as there was no change in the HomeBuilder package, even though the number of places in the First Home Loan Deposit Scheme increased by 10,000. The cap on purchase value also lifted although net overseas migration is still expected to shrink, hurting the sector.
“The extension of the FHLDS is a positive but is not enough to materially change our forecasts,” Macquarie said.
The broker said the $1.5bn provided to support the Australian manufacturing sector and $10bn of state infrastructure payments, as well as $4.5bn spending on the NBN, would spur demand for industrial assets. This would be positive for developments by Goodman, GPT, Stockland and Dexus.
10.26am: ASX opens a little lower after US plunge
Australia’s S&P/ASX 200 slipped 0.2pc to 5956 in early trading after Wall Street dived after President Trump halted stimulus talks.
S&P 500 futures turned down 0.4pc in Asia after initially rising 0.3pc in choppy trading, potentially adding to downward pressure on Australian shares.
The Materials, Financials and Energy sectors fell with BHP down 2pc, NAB down 1pc and Oil Search down 0.7pc.
But the Consumer Staples, Consumer Discretionary, Technology, Real Estate, Health Care and Utilities sectors rose.
ARB surged 6pc after reporting a 17pc jump in sales in the first quarter.
Gold miners dived with Evolution down 4pc after gold prices lost ground overnight.
Lachlan Moffet Gray 10.14am: Packer quizzed on Crown China arrests
The Crown casino inquiry has begun and a monosyllabic James Packer is once again answering questions from counsel assisting Adam Bell.
Mr Bell began by asking Mr Packer if a company executive has “an important role to play in setting the culture of the organisation” as well as “setting business ethics and values”.
Mr Packer responded in the affirmative.
Mr Bell then proceeded to quiz Mr Packer over his personal knowledge of the risk of Crown staff being arrested in China leading up to the arrest of 19 staff.
Mr Bell asked if Mr Packer knew if former CEO Rowen Craigie’s operating understanding of the risk in China was based around “two precise questions of Chinese law being determined in favour of crown resorts interpretation.”
“No, he didn’t,” Mr Packer replied.
Mr Bell has continued to attempt to establish Mr Packer’s knowledge of the sovereign risk of operating a gambling operation in China.
When asked if he himself read the relevant laws, Mr Packer said: “I’m not a lawyer, Mr Bell, so I didn’t.”
Mr Bell asked if Rowen Craigie ever told Mr Packer that it was his view that it was risky for the legality of Crown’s operations in China to rely upon a technical construction of Chinese law.”
“No, he certainly didn’t.”
Mr Bell then asked if Mr Packer turned his mind to the potential risk of Crown staff in China being detained at any point in 2015 while he was Chairman.
Mr Packer said: “Yes, I asked Mr Craigie and (former Crown chair Robert) Rankin to be on top of the issue....I regarded Mr Rankin as an expert in China and an expert in compliance - and I considered Mr Rankin to be an expert in compliance at that time.”
Mr Bell repeated the question several times, with Mr Packer eventually conceding that he did not consider the issue sufficiently.
“I think it would be fair to say in 2015 I thought China was a different place than it turned out to be,” he said.
“I believe Mr Rankin and Mr Craigie let me down.”
10.11am: Budget investment a turning point: retail
The Australian Retailers Association has welcomed the business support and consumer confidence-boosting measures in the federal budget, saying the investment will provide a crucial turning point for business and consumer confidence.
“There can’t be an economic recovery without a retail recovery,” said ARA chief executive Paul Zahra.
“The ARA has been calling for measures which encourage consumer spending and provide cash flow relief to business during this financially challenging time.
“We are pleased to see some gains across all of these areas - with highlights being the personal income tax reductions and some modest cash stimulus for welfare recipients which will boost immediate spending power, as well as the loss carry-back scheme and the wage subsidies which will both help keep more money in the bank for struggling retailers in the coming year.”
Lachlan Moffet Gray 10.04am: Packer resumes Crown evidence
James Packer is about to appear for a second day before the NSW Independent Liquor and Gaming Authority Inquiry into the operations of Crown Resorts.
During his first appearance yesterday he faced questions from Counsel Assisting Adam Bell concerning his relationship with Israeli Prime Minister Benjamin Netenyahu, his plans to privatise Crown Resorts in 2015 and his association with an Israeli named Arnon Milchan.
But most notable was an exchange surrounding a series of emails between Mr Packer and a “Mr X” from a company named “Z Co” who were to be involved in the failed privatization deal.
The exact contents of the email were kept confidential - but it is clear that Mr Packer made comments towards “Mr X” he now considers “shameful” which he attributes to his bipolar disorder.
It is the first time Mr Packer has named his specific ailment.
Commissioner Patricia Bergin could recommend the government cancel Crown Resorts’ NSW gaming licence, placing the billion-dollar Barangaroo Casino/hotel development in turmoil.
10.01am: What’s impressing analysts?
Bingo Industries cut to Hold: Mrningstar
GUD Holdings cut to Sell: Morningstar
Mayne Pharma cut to Hold: Bell Potter
Northern Star raised to Outperform: RBC
Rio Tinto PLC raised to Buy: Investec
Saracen Mineral raised to Hold: EL & C Baillieu
Joyce Moullakis 9.57am: APRA welcomes super shake-up
The banking and financial services regulator has welcomed the federal budget’s reforms in the $3 trillion superannuation sector, as it works through how the changes will be implemented.
The federal government is targeting duplicate superannuation accounts and wants to block funds that underperform over two years from receiving new members, as part of the latest round of sweeping reforms.
The changes will prevent the creation of multiple superannuation accounts by stapling an account to an individual, so that it moves with them when they change jobs. The Australian Prudential Regulation Authority will from July next year also conduct “benchmarking tests” on the net investment performance of MySuper products, with a view to stopping those that have underperformed over two years from receiving new members.
An APRA spokesman said: “APRA welcomes efforts to support and accelerate its ongoing work to improve superannuation member outcomes by raising industry standards, increasing transparency and weeding out underperformers, and looks forward to working through the details of the package with the government and treasury over coming weeks.”
The budget papers showed the government setting aside $159.6m over four years from 2020-21 to implement the package of superannuation reforms.
Read more: Federal budget 2020: Shake-up for super under-performers
9.45am: ASX fall may not be as bad as expected
Early gains in US stock index futures may lessen an expected fall in Australia’s share market.
Overnight futures relative to fair value implied the S&P/ASX 200 would open down 0.4pc at 5938.
That followed bearish engulfing patterns in the major US indexes, with the S&P 500 down 1.4pc at 3360.1 after hitting an almost 5-week high of 3431.56.
US President Trump’s tweets ending talks on new US fiscal stimulus until after the election pushed the S&P 500 down sharply in the final 90 minutes of trading.
But S&P 500 futures rose 0.3pc in early Asian trading. Investors may be encouraged by the increasing prospect of a Joe Biden landslide that precedes major fiscal stimulus.
Real Clear Politics’ average of betting odds on the US election widened yesterday in favour of Joe Biden to 25.5 percentage points, the biggest gap in the entire campaign.
But the bearish key day reversals on Wall Street warn of a retest of 100-day moving average support lines, which in the case of the S&P 500 is 3.5pc lower at 3240.
BHP ADR’s suggest the resources sector heavyweight will open down 2.2pc at $35.47.
The budget seems mostly as expected and seems unlikely to boost the share market today.
But expectations of further RBA easing has grown with the 3-year bond yield hitting a record low of 0.122pc this morning.
The Australian dollar fell from a 3-day high of 0.7209 to a 6-day low of 0.7096 since the RBA statement.
9.30am: Business will drive our recovery: NAB chief
National Australia Bank chief Ross McEwan said it’s now up to business to drive the economic recovery. He said the Federal Government’s 2020 Budget has set the path to rebuild from COVID-19, with a “clear focus on supporting Australian businesses to lead that effort”.
“Business will drive our economic recovery. We must do everything we can to support and strengthen businesses right now and the Budget measures announced by the Government will certainly help to do that as we begin to transition from support to stimulus,” Mr McEwan said.
“In particular, the tax incentives to encourage businesses to invest and wage subsidies to create more jobs will be significant contributors to rebuilding Australia’s economy,” Mr McEwan said.
“A focus on research and development has been among the key issues our business customers have raised with us so it’s good to see measures addressing this area”.
He said personal income tax cuts and extra payments for age pensioners “will put money back in peoples’ hands” and NAB welcomed continued efforts to help Australians buy their first home.
“It’s also pleasing to see investment to re-energise industries of high growth potential such as manufacturing”.
“Getting businesses going again isn’t just the responsibility of governments. Companies like NAB must also step up. We all have a responsibility to do our part to ensure Australia emerges as a stronger global player on the other side of this.”
9.13am: Pandemic road trips aid ARB
4WD accessory manufacturer and distributor ARB Corporation has unveiled a 17.7 per cent lift in sales revenue for the first quarter, thanks to growth in export markets, where pent up demand created during the lockdown period was satisfied.
“In addition, an increased trend towards local touring in several countries has been helpful and government support has provided spending stimulus to people and businesses,” the company said in a statement to the ASX this morning.
“In the absence of a significant change in the economic environment, export sales are expected to remain strong and the OEM order book is growing.”
Based on unaudited figures, profit before tax for the quarter through September 30 was $29.7m, excluding non-recurring government benefits.
John Durie 9.01am: US committee slams tech titans
A high ranking US Congressional committee has slammed the power of digital platforms including Google, Facebook, Apple and Amazon, calling for more powers to combat their power.
The US House Judiciary Committee said the question was raised whether the companies “view themselves above the law.”
The report, tabled this morning, comes as the ACCC is due to hand its media bargaining code to the federal government in the next couple of weeks.
ACCC chief Rod Sims gave evidence at the US inquiry along with EC chief Magrethe Vestager.
The bargaining code will lay down the rules for how media companies will be compensated for their content by the digital platforms.’
Communications Minister Paul Fletcher has promised legislation for the code will be in Parliament by the end of the year. It is expected to receive speedy passage.
The US inquiry is one of an increasing number of inquiries and investigations around the world into the power of the platforms.
The US Justice Department is reportedly considering taking antitrust action against Facebook and the State of Arizona has filed an action on privacy breaches by Google.
8.48am: BHP in nickel talks with Tesla: report
Tesla is in talks with BHP Group on a nickel deal as the electric-car maker seeks to ramp up production and void a supply crunch, Bloomberg reports.
However talks were held up on pricing, and no final agreement had been reached so far between the automaker and mining giant, said Bloomberg, quiting anonymous sources.
Tesla is trying to incrfease the amount of the metal used in vehicle batteries to improve performance, and as it makes a push into in-house cell production.
Bloomberg said both BHP and Tesla did not comment.
8.38am: Magellan inflows surge
Magellan Financial had net inflows of $1.20bn in September versus August - more than twice as much as a $566m rise the previous month - with funds under management at a record $102bn.
September inflows included $239m of retail and $959m of institutional money, up from $208mn and $348bn respectively in August versus July.
8.07am: JPMorgan in climate push
JPMorgan Chase & Co. is pledging to use its financing weight to push clients to align with the Paris agreement and work toward global net zero-emissions by 2050. The bank said it would invest in technologies that help reduce carbon emissions and will work with clients to cut their own carbon footprints.
JPMorgan’s bankers and advisers hold considerable sway in boardrooms around the globe. The bank plans to argue to clients that combating climate change opens the door to more capital from investors and reduces their risk of becoming outdated.
Other banks have made various pledges to stop supporting Arctic drilling and coal companies. British banks NatWest Group (the former RBS Group) and Barclays have both committed to using their business to further the Paris agreement, the 2015 deal that called on global governments to curb rising temperatures. Citigroup Inc. earlier this year said it would walk away from clients that aren’t taking climate change seriously.
President Trump said in 2017 that he would withdraw the U.S. from the Paris agreement, calling the decision “a reassertion of our sovereignty.”
For the Paris agreement to reach its goals, JPMorgan said, businesses and investors must figure out how to better measure carbon output and then make improvements that will require massive investment and spending.
“We’ve got to act now,” said Doug Petno, the head of JPMorgan’s commercial bank.
Dow Jones
8.00am: Cruise cancellations extended
Royal Caribbean Group and Carnival Corp’s Seattle-based Seabourn luxury line extended their sailing pauses past the US Centers for Disease Control and Prevention’s end date for its cruising ban, as some parts of the world are seeing a resurgence in COVID-19 cases.
Royal Caribbean said it is canceling voyages through November 30, excluding sailings from Hong Kong. Carnival’s Seabourn Odyssey is pausing sailings through January 15, 2021; the Seabourn Ovation through April 18; and Seabourn Encore through May 28 of next year.
The extended hiatus comes as the CDC’s “no-sail” order is slated to expire October 31. The cruise industry last month proposed sailing protocols to the CDC, such as reducing virus transmission through air management.
Royal Caribbean added that its Celebrity Cruises unit will also be cancelling its 2020-21 winter program in Australia and Asia, as well as Azamara’s winter sailings in Australia, New Zealand, South Africa and South America.
Carnival, Royal Caribbean, Norwegian Cruise Line Holdings Ltd. and other members of the Cruise Lines International Association earlier Tuesday agreed to test passengers and crew on ships with the capacity to carry 250 or more people. They will require a negative test before any embarkation, CLIA said.
Norwegian on Monday said it was also extending its sailing suspension through November 30.
Cruise operators have lost billions of dollars this year as the pandemic forced them to halt sailings, leaving them dry in revenues. They haven’t sailed in the U.S. for more than half a year.
Dow Jones Newswires
Imogen Reid 7.25am: Business backs budget
The Business Council chief executive Jennifer Westacott has supported Josh Frydenberg’s new economic plan, saying the budget “is doing its job,” to fuel Australia’s pandemic-struck economy.
“It is a crisis situation we’re in. We’ve got a million people who don’t have a job,” Ms Westacott said.
“So the budget’s job ...was to get those people back to work by driving business investment, by driving business activity, by encouraging people to hire people, by retraining and re-skilling people. The budget does that.”
Meanwhile, Deloitte Access Economics partner Chris Richardson said Australians should not be concerned about the cost to their livelihoods.
“The interest payments that we are making are no higher across the entire four years the Government has forecast, in fact they are lower than what they were in 2018-19,” he said.
“Lots of people are really scared about the size of the ongoing cost to our lives and livelihoods. It is less than what you think. We didn’t have a disastrous interest boom in 2018-19 and we don’t have one now. Debt is up, but interest rates are down spectacularly.”
7.20am: ASX poised to slip at open
Australian stocks are poised to fall at the open, after Wall Street abruptly sank when Donald Trump called a halt to talks on a new stimulus package.
Shortly after 7am (AEDT) the SPI futures index was down 17 points, or 0.3 per cent.
Yesterday, Australian stocks finished in positive territory after world markets rebounded from Friday’s falls.
The Australian dollar was sharply lower at US71.16c.
Brent oil was up 3.3 per cent to $US42.65 a barrel.
7.07am: US stocks end lower after Trump scraps stimulus talks
Wall Street tumbled after President Trump dashed hopes for a new economic relief package before the November election.
The S&P 500 fell 1.4 per cent, while the Dow Jones Industrial Average dropped 1.3 per cent and the Nasdaq Composite slid 1.6 per cent.
Stocks had been climbing in the afternoon but immediately reversed course after Mr. Trump tweeted that he had told his representatives to end negotiations with Democrats over a new aid package, saying that House Speaker Nancy Pelosi was “not negotiating in good faith.”
Yields on U.S. government bonds also fell as investors shifted to safer assets, although the move was notably modest compared with the gains that proceeded them over the past two sessions.
“Clearly it deflates some of the optimism that was being priced into the market,” said Jon Hill, an interest rate strategist at BMO Capital Markets. Still, he added, investors seem to realize that the announcement “doesn’t mean we’re never getting another fiscal deal -- it just means it won’t happen before the election and possibly not before inauguration.”
Before Mr. Trump’s tweet, investors had been largely occupied by the latest developments with his health. Mr. Trump left the hospital yesterday after three days of treatment for Covid-19. His doctor said he reported no symptoms on Tuesday, and his campaign said he plans to attend next week’s debate against former Vice President Joe Biden.
Some analysts say indications that Mr. Biden could secure a decisive victory over Mr. Trump in November are helping to support markets despite other factors weighing on investors’ sentiment.
New polls favouring Mr. Biden have helped ease concerns about a narrow win for either candidate, which would escalate the risk of legal disputes and lead to a period of uncertainty in the days after the election. Some also say that a sweep by Democrats of the White House and both chambers of Congress could increase the chances of a large fiscal-spending package after a new government is in place.
“A month or two ago, the market showed a preference for a Trump victory, and now the preference is for a Biden comprehensive win,” said Edward Park, chief investment officer of Brooks Macdonald.
Mr Trump’s diagnosis last week created fresh uncertainty for his presidential campaign and complicated plans for his Supreme Court nominee. Senate Majority Leader Mitch McConnell canceled scheduled votes after several GOP senators tested positive, but he has said confirmation hearings for Judge Amy Coney Barrett are on track to begin Oct. 12. Mr. Trump tweeted Tuesday that he had told Mr. McConnell to concentrate his efforts on the confirmation proceedings rather than the fiscal package.
Dow Jones Newswires
6.20am: ASX set to slip at open
Australian stocks are poised to fall at the open, after Wall Street sank when Donald Trump called a halt to talks on a new stimulus package.
Shortly after 6am (AEDT) the SPI futures index was down four points.
Yesterday, Australian stocks finished in positive territory after world markets rebounded from Friday’s falls.
The Australian dollar was lower at US71.17c.
6.16am: US stocks drop after Trump halts stimulus talks
US stocks turned lower Tuesday after President Trump tweeted that he is ending negotiations with Democrats over a new economic relief package.
With about an hour of trade to go the Dow Jones Industrial Average dropped 350 points, or 1.3 per cent, while the S&P 500 declined 1.3 per cent. The Nasdaq Composite fell 1.6 per cent.
On Twitter, Mr. Trump said he instructed his representatives to stop negotiating on a stimulus package until after the election.
“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Mr. Trump said on Twitter. He said he had instructed Senate Majority Leader Mitch McConnell to concentrate his efforts on confirming his Supreme Court nominee Amy Coney Barrett.
Mr. Trump’s tweet appeared to end, at least for now, a long-running effort between Mrs. Pelosi and Mr. Mnuchin to reach an agreement on another coronavirus relief deal.
Stocks had been slightly higher ahead of the tweet, stabilising following big swings in recent sessions. All three indexes fell Friday after Mr. Trump tested positive for COVID-19 before rebounding Monday as his health status appeared to improve.
Investors have been trying to assess the implications of Mr. Trump’s illness and the infection spreading among U.S. senators and top White House staff. Traders are also focused on former Vice President Joe Biden’s lead in the polls and fresh waves of coronavirus infections.
“People are waiting for the vote to pass and expect volatility to increase,” said Seema Shah, chief strategist at Principal Global Investors. “This is not the right time to be making rash decisions about your positioning.”
Some analysts say indications that Mr. Biden could secure a decisive victory over Mr. Trump in November are helping buoy markets.
Investors had grown concerned in recent weeks about a narrow win for either candidate, which would escalate the risk of legal disputes and lead to a period of uncertainty in the days after the election. Some also say that a sweep by Democrats of the White House and both chambers of Congress could increase the chances of a large fiscal-spending package after a new government is in place.
“A month or two ago, the market showed a preference for a Trump victory, and now the preference is for a Biden comprehensive win,” said Edward Park, chief investment officer of Brooks Macdonald.
Mr. Trump left the hospital Monday after three days of treatment for COVID-19. His doctor said he reported no symptoms on Tuesday, and his campaign said he plans to attend next week’s debate against Mr. Biden.
His diagnosis has created fresh uncertainty for his presidential campaign and has complicated plans for his Supreme Court nominee. Senate Majority Leader Mitch McConnell cancelled scheduled votes after several GOP senators tested positive, but he has said confirmation hearings for Judge Amy Coney Barrett are on track to begin Oct. 12.
Bonds and stocks registered a muted response to Federal Reserve Chairman Jerome Powell’s latest comments on the economy. In remarks to be delivered at a virtual economic conference, Mr. Powell once again warned of the risks to the economy if Congress and the White House don’t provide additional support to households and businesses.
In commodities, U.S. crude rose 2.9 per cent to $US40.34 a barrel.
Dow Jones Newswires
6.10am: Trump’s announcement, in tweets
...request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business. I have asked...
— Donald J. Trump (@realDonaldTrump) October 6, 2020
...also coming back in record numbers. We are leading the World in Economic Recovery, and THE BEST IS YET TO COME!
— Donald J. Trump (@realDonaldTrump) October 6, 2020
6.05am: US stocks down after sharp swings
US stocks swung from gains to losses amid sharp swings as President Trump halted stimulus talks
After earlier being mainly positive, and with an hour of trade to go, the S&P 500 was down 1.3 per cent, the Dow Jones Industrial Average had lost 1.37 per cent and the tech-heavy Nasdaq Composite slipped 1.8 per cent.
It came after Trump tweeted that he had ordered his team to halt talks on a stimulus package with congressional Democrats until after the election.
All three indexes fell Friday after Mr. Trump tested positive for COVID-19 before rebounding Monday as his health status appeared to improve.
Investors have been trying to assess the implications of Mr Trump’s illness and the infection spreading among US senators and top White House staff. Traders are also focused on former Vice President Joe Biden’s lead in the polls, fresh waves of coronavirus infections and discussion in Washington about a new economic relief package.
“People are waiting for the vote to pass and expect volatility to increase,” said Seema Shah, chief strategist at Principal Global Investors. “This is not the right time to be making rash decisions about your positioning.”
Some analysts say indications that Mr Biden could secure a decisive victory over Mr. Trump in November are helping buoy markets.
Investors had grown concerned in recent weeks about a narrow win for either candidate, which would escalate the risk of legal disputes and lead to a period of uncertainty in the days after the election. Some also say that a sweep by Democrats of the White House and both chambers of Congress could increase the chances of a large fiscal-spending package after a new government is in place.
“A month or two ago, the market showed a preference for a Trump victory, and now the preference is for a Biden comprehensive win,” said Edward Park, chief investment officer of Brooks Macdonald.
Mr. Trump left the hospital after three days of treatment for COVID-19. His doctor said he reported no symptoms on Tuesday, and his campaign said he plans to attend next week’s debate against Mr. Biden.
Bonds and stocks registered a muted response to Federal Reserve Chairman Jerome Powell’s latest comments on the economy. In remarks to be delivered at a virtual economic conference, Mr Powell once again warned of the risks to the economy if Congress and the White House don’t provide additional support to households and businesses.
Overseas, the pan-continental Stoxx Europe 600 edged up 0.1 pr cent. Japan’s Nikkei 225 ended trading up 0.5 per cent, while Hong Kong’s Hang Seng Index climbed 0.9 per cent. China’s Shanghai Composite Index remained closed for a holiday.
In commodities, US crude rose 2.9 per cent to $US40.34 a barrel.
Dow Jones Newswires
5.58am: GE facing civil action for securities breaches
General Electric said it has received a notice from the staff at the Securities and Exchange Commission warning that the agency could bring a civil action against the company for allegedly violating securities laws.
The industrial giant said in a securities filing that it received the so-called Wells notice on Sept. 30 over the company’s accounting for reserves related to an insurance business it started to wind down in prior years.
A Wells notice is a letter saying the SEC plans to bring an enforcement action and gives the recipient an opportunity to argue why the action shouldn’t be taken.
The SEC and the Justice Department have been investigating GE’s accounting for about two years after the company disclosed large writedowns tied to a legacy insurance business and its power business.
Dow Jones
5.55am: Budget: $1.5bn plan to boost manufacturing
Treasurer Josh Frydenberg’s coronavirus budget is a good fit for tough times, according to one of Australia’s biggest manufacturing companies, with Incitec Pivot boss Jeanne Johns praising the federal government’s push to get the sector back on track.
Prime Minister Scott Morrison outlined a $1.5bn plan to underpin Australia’s economic recovery from the coronavirus crisis through a manufacturing resurgence last week, promising to help manufacturers upscale their businesses, help turn ideas into finished products, and integrate Australian business into global supply chains.
On top of that, the federal government’s so-called ‘‘gas-fired recovery” plan includes a proposal to emulate the US Henry Hub gas facility in Australia by expanding the existing Wallumbilla facility in Queensland, establish a domestic gas reservation scheme and strengthen price commitments with LNG exporters, to help to improve conditions for manufacturers.
5.50am: Budget: Thumbs up from business
Josh Frydenberg’s second budget has been endorsed by Australia’s business community, which labelled the economic blueprint the “right budget at the right time” as the Morrison government attempts to steer the country out of the COVID-19 pandemic and recession.
Business leaders said the temporary incentive that will let companies carry back tax losses to offset profits in previous years was vital in improving confidence and supporting cashflow, while the acceleration of stage two of the government’s personal income tax cuts would help fuel the recovery.
5.48am: Budget: Iron ore price a boon for revenue
Iron ore prices have surged to their highest levels in six years in a much-needed multi-billion-dollar boost for state and commonwealth coffers.
While coronavirus has ravaged most corners of the economy and put a massive strain on the federal budget, Western Australia acted early to ensure the state’s mining industry could continue amid the lockdown.
The federal government is forecasting the iron ore price to decline to $US55 per tonne by the end of the June quarter next year, two quarters later than was assumed in its July update.
5.41am: Budget: Business in line for $98bn boost
The Morrison Government is giving business a $98bn boost from a combination of accelerated personal tax cuts, generous short term investment allowances, temporary tax concessions and a $14bn in infrastructure spending to cushion the impact of the Covid induced recession and “kick start investment”.
Treasurer Josh Frydenberg said the temporary full expensing allowances, which were much larger than expected by the business community, would “unleash a wave of investment across the country” for a potential 3.5 million businesses, generating a potential $200bn in new investment.
A million small businesses are also estimated to benefit from temporary loss, carry back concessions giving loss making business a chance to get a tax refund before they move back into profit.
Another $2bn is being made available through the research and development tax incentive scheme.
At the same time, the government asking business to step up to the plate with a $4bn JobMaker hiring credit program aimed at providing jobs for half a million Australians under 35, as part of its plan to hold down unemployment rates as support schemes such as JobKeeper and JobSeeker phase out next year.
Business will also benefit from the establishment of a $1bn job trainer fund which is aimed at creating another 340,000 free or low cost training places for school leavers and job seekers.
5.36am: Budget: Tax breaks for small business
Small businesses have been handed tax breaks worth more than $100m and an insolvency lifeline.
More than 200,000 businesses will be exempt from fringe benefits tax, be able to deduct start-up expenses and will be able to access simplified trading stock rules by 2021.
The $105m set of 10 small business tax concessions will benefit companies employing more than 1.7 million Australians.
“From July 1, 2020, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure,” the budget papers say.
“From April 1, 2021, eligible businesses will be exempt from the 47 per cent fringe benefits tax on carparking and multiple work-related portable electronic devices (such as phones or laptops) provided to employees.
OUR EXPERTS’ VERDICT ON THE BUDGET
5.35am: Budget: turbocharged write-offs in jobs push
Businesses will be able to write off the full value of new assets in a single year under a $26.7bn tax relief package the Morrison government hopes will turbocharge business investment and create about 50,000 jobs by mid-2022.
Under the plan, firms with turnover up to $5bn — more than 99 per cent of Australian businesses — will be able to deduct the full cost of assets until June 2022.
Josh Frydenberg said the initiative would provide $26.7bn worth of tax relief over the next four years, branding it a “game changer” that would “get Australians back to work”.
Business will also be able offset losses from past profits, accessing a further $4.9bn in tax relief. The measures are designed to help support the recovery of the economy, which the Treasurer expects will begin to rebound next year, forecasting 4.25 per cent growth after a 3.75 per cent fall this year.
5.32am: Markets edge higher amid US uncertainty
Stock markets edged upwards as investors absorbed the latest coronavirus vaccine news after President Donald Trump returned to the White House following treatment for the virus.
Political concerns persisted ahead of the presidential election on November 3 however.
The US dollar rose against the pound but declined against the yen, while oil prices shot higher owing to strikes on Norwegian offshore platforms and a hurricane heading towards US installations.
European and Swiss regulators said they had begun to assess candidate vaccines for the coronavirus, suggesting that progress was being made towards managing COVID-19, which has killed more than 1.04 million people worldwide.
On Monday, global equities had rebounded on reports of Trump’s improving health and as US lawmakers appeared to edge towards agreeing on a new stimulus package.
The election still weighed on investor’s minds, however.
Markets were unclear over the chances of a new US stimulus package that would help counteract fallout from the pandemic in the world’s biggest economy, dealers said.
London closed up 0.1 per cent, Frankfurt added 0.6 per cent and Paris rose 0.5 per cent.
AFP
5.30am: Demand for jets faces hit: Boeing
The hit from the coronavirus will dent demand for new commercial planes over the next two decades, according to a Boeing forecast.
The aviation giant now projects there will be 18,350 new commercial planes needed over the next decade, 11 per cent below Boeing’s 2019 forecast.
But as with other difficult periods such as right after the September 11 attacks or the aftermath of 2008 financial crisis, “the industry will prove resilience again,” said Darren Hulst, vice president of marketing at Boeing.
“The fundamentals aren’t changing,” he said.
Boeing expects solid demand growth to continue into the 2030s. Still, the forecast at the end of the 20-year period is for growth of 43,110 new planes, five per cent below Boeing’s prior forecast.
AFP
5.27am: US trade deficit widens again
The US trade deficit continued to widen in August, as imports outpaced exports amid the ongoing coronavirus pandemic, according to official data.
The deficit rose 5.9 per cent from July to $US67.1 billion, increasing more than expected but posting a more moderate jump than the nearly 19 per cent surge in the month prior, according to the Commerce Department report.
However, the August trade gap was the widest since 2008 and the third-largest on record, James Watson of Oxford Economics said.
Exports gained $US3.6 billion from July to $US171.9 billion overall, not enough to offset the $US7.4 billion climb in imports to $239 billion.
The growth in the deficit came from a slight decrease in the services surplus to $US16.8 billion, while the goods deficit climbed $US3.0 billion to $US83.9 billion.
AFP
5.25am: WTO eyes softer-than-expected global trade drop
Global trade, devastated by the coronavirus crisis, will shrink by less than expected this year but the rebound will also be much weaker than previously forecast, the WTO said.
Revising its prior forecast of at least a 12.9-per cent contraction in 2020, the World Trade Organisation said it now expected global trade to contract by just 9.2 per cent this year.
But it will then grow by only 7.2 per cent next year, rather than the previous estimate of 21.3 per cent, the WTO added.
“World trade shows signs of bouncing back from a deep, COVID-19-induced slump, but WTO economists caution that any recovery could be disrupted by the ongoing pandemic effects,” the global trade body said in a statement.
AFP
5.22am: COVID-19 downturn not as bad as feared: IMF
Amid a flood of government spending, the global downturn sparked by the coronavirus pandemic will not be as bad as originally feared, but the crisis is far from over, IMF chief Kristalina Georgieva said.
“The picture today is less dire... allowing for a small upward revision to our global forecast for 2020,” she said. The IMF is due to present updated forecasts next week.
She credited the “extraordinary policy measures that put a floor under the world economy,” which amounted to $us12 trillion in fiscal support to households and firms.
But the economic shocks, especially to low-income countries, have been “profound.” “All countries are now facing what I would call ‘The Long Ascent’ -- a difficult climb that will be long, uneven, and uncertain,” Georgieva warned.
AFP
5.20am: French court to rule on Google vs media
A Paris appeals court will rule on Thursday night (AEDT) on whether France’s competition authority overstepped its jurisdiction in ordering Google to negotiate with media groups in a dispute about digital copyright.
The keenly awaited ruling will be the latest chapter in a long-running fight with European news companies demanding payment for content displayed in Google search results.
The outcome could have huge repercussions for the future of the press as it grapples with the decline in traditional print sales.
The US internet giant is in a standoff with European media groups, including Agence France-Presse, over its refusal to comply with a new European Union “neighbouring rights” law.
The law seeks to give a form of copyright protection to media firms when their content is used on websites, search engines and social media platforms.
But Google, which dominates internet searches, says that articles, pictures and videos will be shown in search results only if media groups consent to let the tech giant use them for free.
The juggernaut insists it should not have to pay to display items produced by news companies since they benefit from seeing hundreds of millions of visits to their websites.
AFP
Add your comment to this story
Santos’ Abu Dhabi bidder spruiks Aus energy focus
First comments by Santos' $30bn bidder come as target's shareholder backs takeover. Oil lifts as Trump weighs Middle East action. MinRes leads iron ore falls.
Middle East tensions fuel oil price volatility; ASX flat
Chalmers won't preempt FIRB advice on Abu Dhabi's near-$30bn takeover play for Santos. US forces deployed to region amid Israel, Iran attacks. Blow for Albanese as Trump plans hasty G7 exit.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout