Bernanke: sequester would hit US recovery

US Federal Reserve Chairman Ben Bernanke. Pic: AP/Manuel Balce Ceneta Source: AP

US Federal Reserve Chairman Ben Bernanke is warning 85 billion US dollars worth of spending cuts in the March sequester would place a significant burden on America's economic recovery.

Bernanke says Congress and the Obama administration should consider replacing the sharp cuts required by the sequestration, with policies that reduce the federal deficit gradually.

He highlighted data from the Congressional Budget Office, which is projecting the cuts would reduce potential economic growth by point-six per cent.

The cuts are due to be implemented over the next seven months if no moderate substitute program is agreed on.
 

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Shares up slightly despite Europe sell-off

The Australian market has closed higher after strong offshore leads and firmer earnings reports domestically. Live updates

4.01pm: AT THE CLOSE: The Australian share market has closed higher after strong offshore leads and firmer earnings reports domestically.

At the close on Wednesday, the benchmark S&P/ASX200 index was 33 points, or 0.66 per cent, higher at 5,036.6 while the broader All Ordinaries index was up 31.3 points, or 0.62 per cent, at 5,053.1.

On the ASX 24, the March share price index futures contract was 40 points stronger at 5,017 with 23,247 contracts traded.

Here's some of the big movers on the market today:

• AGK - AGL ENERGY LTD - up 68 cents at $15.87
• AGL Energy's acquisition of a major Victorian power plant has contributed to a significant rise in first half profit to $365 million.
• AGO - ATLAS IRON LTD - down 6.5 cents at $1.48
• BHP - BHP BILLITON LTD - up 34 cents at $36.69
• FMG - FORTESCUE METALS GROUP LTD - down one cent at $4.60
  Iron ore miners Fortescue Metals Group, Atlas Iron and BHP Billiton have evacuated staff and locked down operations in Western Australia as wind gusts strengthen to 230km/hour near the centre of Cyclone Rusty.
• JHX - JAMES HADRIE INDUSTRIES PLC - up 15 cents at $9.50
  Building products group James Hardie has trimmed its earnings forecast for the year, saying conditions in the housing market remain uncertain.
• MAH - MACMAHON HOLDINGS LTD - down one cent at 33 cents
  Mining services company MacMahon Holdings will post a loss of up to $20 million this financial year because of its troubled construction business.
• MTS - METCASH LTD - down one cent at $4.03
  Grocery wholesaler Metcash has named the head of a New Zealand discount retailer, Ian Morrice, as its new chief executive.
• PMP - PMP LTD - up 1.5 cents at 21.5 cents
  Printing and distribution business PMP will continue to sell off assets in 2013 as it tries to recoup money lost from changes to the media landscape.
• PRT - PRIME MEDIA GROUP LTD - up 1.5 cents at $1.05
  The federal election campaign should breathe new life into a challenging television advertising market, regional broadcaster Prime Media Group says.
• SGH - SLATER & GORDON LTD - up four cents at $2.40
  Law firm Slater & Gordon has lifted its half year profit by 61 per cent, partly thanks to a successful marketing campaign and expansion efforts in the UK.
• SYD - SYDNEY AIRPORT - up six cents at $3.20
  Sydney Airport has swung back into profitability as retail and car parking revenue grew and airlines added more flights.
• UGL - UGL LTD - down 60 cents at $10.30
  Engineering firm UGL's first half profit has slumped by 53 per cent due to $25 million in costs from a restructure.
• WDC - WESTFIELD GROUP - up six cents at $11.14WRT - WESTFIELD RETAIL TRUST - up five cents at $3.19
  Shopping centre developer Westfield Group's annual profit has grown by 18 per cent as income from its centres across the world increased.
• WTF - WOTIF.COM HOLDINGS LTD - down 47 cents at $5.37
  Wotif Group says its first half profit is down five per cent, partly due to a global decline in travel.

2.30pm: Australian shoppers may be ready to start splashing their cash again as solid savings rates and low inflation lifts consumer confidence, Westfield boss Peter Lowy says.

Mr Lowy made the comments as the shopping centre giant posted an 18.3 per cent rise in annual profit.

He said while there were always external factors which could influence retail sales, current conditions in the
Australian economy pointed to an improvement during the year.

"Retail sales have been relatively flat for three or four years," he told AAP. "There has been a very high savings rate in Australia and that has stabilised now, you see higher consumer confidence than you've seen before.

1.50 pm: A deep drop in hotel bookings across Asia, Europe and the United States has dragged down earnings at online travel agency wotif.com.

The group's first half net profit fell 4.6 per cent as revenue from hotel bookings in Asia and other countries dropped by nearly a fifth.

Wotif fared better at home, with a one per cent rise in revenue from accommodation bookings in Australia and New Zealand.

Revenue from flight sales also rose 11 per cent despite the lacklustre local retail conditions.

Investors were disappointed with the result, pushing wotif's shares down by more than 10 per cent in early trade.

1.11pm: Steady growth forecast for economy
Global credit rating agency Standard & Poor's expects Australian economic growth will remain close to trend in coming years, as public debt peaks at a low level.

But S&P, which rates Australia at a top ranking triple-A with a stable outlook, says the local economy does have vulnerabilities.

"The economy holds a large amount of offshore debt, households retain substantial debt because of high house prices and its banks are reliant on foreign investor funding," associate director Craig Michaels said.

12.35pm: Stocks continue to rise
The Australian share market continued to rise in morning trade after a strong session on Wall Street and the release of mostly encouraging earnings reports locally.

At 12.03pm AEDT today, the benchmark S&P/ASX200 index was up 31.1 points, or 0.62 per cent, at 5034.7 points, while the broader All Ordinaries index was up 30.4 points, or 0.61 per cent, to 5052.3 points.

On the ASX 24, the March share price index futures contract was up 37 points at 5015 points, with 14,085 contracts traded.

"Corporate reports seem to be okay today, and reporting this month has been in line with expectations, with the odd surprise and the odd disappointment," Burrell Stockbroking director Richard Herring said. "So, it's been quite encouraging, given the wider market's expectation of complete disappointment, in terms of earnings."

11.32am: ABS figures just out
Total construction work done in Australia fell 0.1 per cent in the December quarter, according to official data.
The median forecast among economists was for total construction work done to have risen 1.5 per cent for the quarter.

Over the year to the December quarter, the volume of construction work done was up 11.9 per cent, the Australian Bureau of Statistics said on Wednesday.

The ABS said total building work done in the December quarter, including homes and non-residential buildings
like offices and shops, rose 1.8 per cent from the September quarter.

Engineering work done, which includes mines, roads, bridges and the like, was down 1.3 per cent in the quarter.

11.10am: Dollar edges higher against Euro
The dollar edged higher against the euro after Ben Bernanke confirmed the US Fed's stimulus program would continue, while the yen traded flat ahead of the nomination of a new Bank of Japan chief. At 09.00 AEDT the euro was at $1.3061, compared to $1.3065 late on Monday.

11.05am: Here's some of the biggest losers and gainers from CommSec:

10.55am: Positive comments from Ben Bernanke yesterday in relation to quantitative easing (pumping money into the system) gave investors confidence and is having a knock on affect on our markets after yesterday's sell-off.
IG Markets analyst Stan Shamu said:

"We did see a massive turnaround in US trade, triggered mainly by some better than expected economic data, with consumer sentiment coming in much stronger than expected. Especially with (US Federal Reserve Chairman) Dr Ben Bernanke coming out with that testimony (to Congress), that really calmed investors' nerves about quantitative easing. It certainly seems like we've got some positive momentum behind us."

10.40am: From the companies reporting today:

• Westfield Group gained 12 cents, or 1.08 per cent, to $11.20.
• James Hardie's stocks were also up 12 cents, or 1.28 per cent, to $9.47 at 1033 AEST
• AGL Energy put on 56 cents, or 3.69 per cent, to $15.75
• UGL fell 48 cents, or 4.4 per cent, to $10.42

10.23am: At 10.23am (AEDT), the benchmark S&P/ASX200 index was up 37.2 points, or 0.74 per cent, at 5040.8, while the broader All Ordinaries index was up 35.3 points, or 0.70 per cent, at 5057.1.

On the ASX 24, the March share price index futures contract was up 46 points at 5024, with 9,487 contracts traded.

Stock Move Price

• AMP +0.03% to $5.36
• ANZ Bank +0.09% to $28.25
• BHPBilton +0.21% to $36.56
• CBA 0.63% to $66.10
• NAB 0.14% to $30.09
• NewsCorp +0.41% to $28.13
• Rio Tinto +0.50% to $66.07
• TelstraCp +0.015% to $4.61
• WestpacBk +0.12% to $30.35
• Woodside +0.09% to $36.43
• Woolwrths +0.25% to $34.19

10.05am: AT THE OPEN: The benchmark S&P/ASX200 index was up 16.83, or 0.34 per cent, at 5020.3 points.

9.50: Building products group James Hardie has trimmed its earnings forecast for the year, saying conditions in the housing market remain uncertain.

The group on Wednesday revealed it had made a net operating profit of $US31.5 million ($A30.95 million) in the third quarter to December 31, up from a loss of $US4.8 million ($A4.72 million) a year earlier.

The results include the company's asbestos-related costs, plus regulatory costs and tax adjustments.

Excluding those costs, operating profit rose to $US28.8 million ($A28.29 million) from $US27.7 million ($A27.21 million).

Chief executive Louis Gries said that while the US housing market had gained momentum, earnings growth had been constrained by lower sales prices and higher costs.

But, he said, if the US market continued its recovery, earnings were expected to rise.

9.45am: Engineering firm UGL's first half profit has slumped by 53 per cent due to $25 million in costs from a restructure.

UGL made a net profit of $26 million in the six months to December 31, down from $55.4 million in the previous corresponding period.

Underlying net profit, which excludes the costs of its restructure and rebranding of one of its businesses, was $51 million in the six months to December, down from $72.2 million in the previous corresponding period.

9.30am: Half an hour until market opens. In the mean time let's have a quick look at how Italy has sent the markets into a frenzy:

The Italian connection:
The Italian election sent European stocks plummeting overnight. Former Prime Minister Silvio Berlusconi almost got re-elected, sending all the austerity measures implemented by Mario Moni into doubt. Eoin Doyle wrote:

The fear is that a divided parliament in Italy would make the implementation of the austerity medicine (cutting public debt and spending) more difficult and would put a spanner in the works of the European recovery project - something that makes markets very nervous.

Italy is Europe’s third largest economy and how it performs and who is in power matters.

Read more on How Italian voters tanked global markets here.

8.50am: AGL Energy's acquisition of a major Victorian power plant has contributed to a significant rise in first half profit to $365 million.

AGL acquired Loy Yang A, Australia's third largest coal fired power station, in June 2012.

The contribution of earnings from Loy Yang helped AGL's net profit in the six months to December 31 rise from $117 million in the previous corresponding period. Read more here

8.45am: Westfield Group lifts profits
Shopping centre developer Westfield Group's annual profit has grown by 18 per cent as income from its centres across the world increased.

The group, which manages 105 shopping centres in five countries, made a $1.72 billion profit in the year to December 31, up from $1.532 billion in 2011.

Joint chief executives Peter Lowy and Steven Lowy said 2012 was a year in which the company made several changes to its property portfolio as it aims to improve its returns to shareholders.

"The performance for the year has been very good and in line with expectations," they said today.

7.00am: The Australian market looks set to open higher after a positive performance on Wall Street buoyed by upbeat earnings results and after Federal Reserve chairman Ben Bernanke said US economic growth had rebounded from the fourth quarter.

At 6.30am AEDT today, the March share price index futures contract was up 20 points at 4998.

Making news today:

Economic news
In economic news today, the Australian Bureau of Statistics is due to release construction work done, December quarter, figures.

Company news:

• Westfield Group full year results
• Sydney Airport full year results
• Prime Media Group first half results
• Slater & Gordon first half results
• Wotif.com first half results
• AGL Energy first half results
• UGL first half results
• James Hardie Industries third quarter results

At the close yesterday
In Australia, the market yesterday closed lower but pared back earlier heavy falls.

The benchmark S&P/ASX200 index closed down 52.2 points, or 1.03 per cent, at 5003.6 points, while the broader All Ordinaries index had fallen 50.9 points, or 1.0 per cent, to 5021.8 points.

Dollar
The Australian dollar is lower against a stronger greenback following improved US economic figures.

At 6.30am AEDT today, the currency was trading at 102.42 US cents, down from 102.83 US cents yesterday.

The Australian dollar weakened overnight after improved American consumer confidence and housing data lifted the US dollar.

The Conference Board's consumer confidence index hit 69.6 in the month of February, while the Commerce Department reported a 15.6 per cent increase in new home sales, the biggest increase in nearly two decades.

What happened overnight:
Europe
European stock markets have slumped as dealers assess the fallout of Italy's political impasse after elections in the indebted eurozone country.

Milan's FTSE MIB index tumbled 4.89 per cent to end the day at 16,552 points, with deadlock in Italy's parliament.

London's FTSE 100 index of leading companies fell 1.34 per cent to 6270.44 points, and Frankfurt's DAX 30 shed 2.27 per cent to 7597.11 points.

In Paris, the CAC 40 shed 2.67 per cent to 3621.92 points, as shares in European banks tumbled, while Madrid's IBEX 35 index dived 3.2 per cent to 7980.7 points on fresh fears of eurozone instability.

The price of gold, which is often seen as a haven in times of economic unrest, grew to $1590.50 an ounce from $1586.25 yesterday in New York.

US stocks open higher
US stocks have opened solidly higher in anticipation of congressional testimony by Federal Reserve Chairman Ben Bernanke.

The markets are also being buoyed by upbeat earnings results, including figures from home-improvement retailer Home Depot.

Fifteen minutes into trade, the Dow Jones Industrial Average was up 83.01 points (0.60 per cent) to 13,867.18.

The broad-based S&P 500 jumped 7.45 points (0.50 per cent) to 1495.30, while the tech-rich Nasdaq Composite Index rose 7.28 points (0.23 per cent) to 3123.53.

The gains partially offset deep losses sustained yesterday in the wake of the uncertain outcome of the Italian elections.

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How Italian voters sent markets plunging

Former Italian Prime Minister Silvio Berlusconi almost got re-elected sending markets into a frenzy. Picture: File Source: AFP

THE Italian election sent European stocks plummeting overnight. Former Prime Minister Silvio Berlusconi almost got re-elected, sending all the austerity measures implemented by Mario Moni into doubt.

A shock election result on Monday showed a surge in support for comedian Beppe Grillo’s anti-establishment campaign, as well as surprising support for former Prime Minister Silvio Berlusconi.

It is an indication of just how interconnected global markets are that the outcome of an election in a southern European country on the other side of the world could send shockwaves through to our local market.

European stockmarkets slumped overnight: Milan's FTSE MIB index tumbled 4.89 per cent and London's FTSE 100 index of leading companies fell 1.34 per cent.

Yesterday our own local market dived 1.2 per cent in early trade as a direct knock on from the Italian stalemate.

The reason: the Italian connection
Investors are concerned that the Italian people have voted in large numbers for a political party which is anti-austerity and anti-euro.

They were hoping for the liberal leader Pier Luigi Bersani to win which would allow him to form a coalition government with pro-austerity and current leader Mario Monti.

Instead the Italian people have staged somewhat of a "rebellion" and a push back against austerity.

The rebellion means a huge share of the vote has gone to Mr Berlusconi and Beppe Grillo, the populist comedian.

Although Mr Berlusconi’s party does not have enough to form a majority Government – it has sent the markets into a frenzy because of fear of contagion.

It puts doubts in investors’ minds about the Eurozone’s ability to emerge from its sovereign debt crisis and see through its austerity program in problem countries like Spain, Italy and Greece

The fear is that a divided parliament in Italy would make the implementation of the austerity medicine (cutting public debt and spending) more difficult and would put a spanner in the works of the European recovery project - something that makes markets very nervous.

Italy is Europe’s fourth largest economy and how it performs and who is in power matters.

It also suffers from a raft of economic problems common to other southern European countries, ranging from low growth to an inflexible labour market and high debt to GDP - making strong leadership a must if it is to face up to its debt issues, implement the necessary austerity measures and start to regain its competitiveness.

We should also bear in mind that markets around the world are coming down off recent record highs, driven up as some see it by governments pumping money into the system and over-excited investors inflating prices of late.

So it is not surprising that we see a strong pull back on uncertainty out of Europe. 

On the other hand it can be argued we are seeing a return in investor confidence and appetite.

However ongoing doubts over a Euro area recovery, unresolved fiscal cliff issues in the US, questions over growth in Japan and China mean markets will likely remain choppy for some time to come.
 

View the original article here

All Black sells juice to Asahi for $101m

PARENTS told to start saving now if they want their children to get a degree, with costs set to soar up to 50 per cent in the next decade.

• Poll: Overseas students welcome to stay

What the collapse of Hastie Group can teach us

THE $630 million collapse of engineering firm Hastie Group last year led to the axing of 1500 jobs across five countries. But directors don't necessarily get off easy.

Millions of dollars lost to fraud

BUSINESSES have lost more than $373 million to fraud over the last two years - and that's considered only a sliver of actual losses, KPMG says.

BRAIN FREEZE: How to unlock a business idea

DREAM of being the next Zuckerberg? Your idea doesn't have to be big to make a difference. Three entrepreneurs tell us how they came up with their business idea.

Tinkler settles tax debt cases

MILLIONAIRE Nathan Tinkler has had ATO cases against the Newcastle Knights and his Hunter Sports Group dismissed in the NSW Supreme Court.

Want to know what everyone in your office earns?

IF you knew how much your colleagues earned, would it make you work harder? Businesses are throwing open the books in an attempt to motivate staff.

Four rules to a successful mobile app

EUREKA! You have your idea for a mobile app to build your business, and you're ready for success. But where do you start?

Clean up your online reputation: Is it possible?

HAVE you ever Googled yourself? Chances are others are - and you might not like what they find. Here’s how to optimise your digital DNA.

How to put a price on your business

LIKE any good Jedi, business owners are being told to "unlearn" the pricing mistakes of the past.

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Skirts 'key to success for women'

THE trouser suit may be the uniform of choice for the power-dressing career woman. But she'd be better off in a skirt, research shows.

View the original article here

Fight for your rights at the checkout

Shoplifting costs retailers millions each year.

THE average family spends more than $200 a week on groceries and knowing your consumer rights in the supermarket could save you money as well as some embarrassment.

Paying attention to the correct price of items as you shop and as they are scanned at the checkout means you are less likely to be overcharged, and you may also get a refund.

Under Australian consumer law, if an item scans at a higher price than the displayed price, the business is required to refund the difference.

However, most major supermarkets - including Woolworths and Coles - are signatories to a voluntary national scanning code of practice, which means if an item scans incorrectly it is given to the customer for free.

"Where there are multiple items with the same bar code, the first is free and the rest charged at the correct price," says the chief executive of the Australian National Retailers Association, Margy Osmond.

Exceptions to this are liquor and cigarettes, items more than $50 and any manually entered by the checkout operator.

"The code was developed to offer consumers protections when computerised final point of sale scanning systems were introduced into Australian supermarkets," Osmond says.

Consumers also have rights when it comes to bag searches in shops, but so do retailers.

Shoplifting costs the Australian retail industry $7.5 billion a year and one of the ways it is prevented is by bag searching of consumers.

Australian Retailers Association executive director Russell Zimmerman says consumers have a right to know before they enter a store that it conducts bag checks.

"Checking means that store personnel can look, but not touch," he says.

The retailer cannot check a personal handbag unless it is larger than a sheet of A4 paper, or they are certain it is being used to steal goods.

Retailers can also ask you to pay if you break things in their store, but Mr Zimmerman says accidental breakages "are not usually a major issue".

"Retail stores use their discretion when it comes to breakages and are mostly able to take on the cost using their store insurance, or being able to return the goods to the supplier as 'faulty'," he says.

Woolworths spokesman Benedict Brook says both Woolworths and Big W stores display signs at the front of the store to explain the bag check policy, while breakages are considered as they occur.

"Big W and Woolworths approach breakages on a case-by-case basis," he says.

View the original article here

10 mind-boggling Wall Street interview questions

How many tennis balls are there in New South Wales was a question an investment banking candidate was asked. Picture: File Source: news.com.au

• Investment bankers subjected to bizarre interview questions
• Makes you think creatively, show personality
• See 10 mind-boggling questions below

IF you were shrunk to the size of a pencil and trapped in a blender, how would you get out?

Could you weigh an elephant without using a scale, guess the number of tennis balls there are in New South Wales, or bricks on residential buildings in Shanghai?

If so, you may have what it takes to be an investment banker.

These are some of interview questions potential investment bankers are asked - they are tough, very tough, and some even border on the ridiculous.

But there's method to the madness.

According to investment banking recruiter Jason Hutchins from Anton Murray Consulting investment banks are looking to determine three things about candidates:

1.    Are you smart enough
2.    Can you handle the work

3.    Do they like you

He said that while interviewers will of course focus on candidates technical ability, commercial awareness and previous experience they will also gauge their response to one or two more obscure questions.

"For example an associate interviewing with UBS was recently asked how many tennis balls there were in New South Wales," said Mr Hutchins.

"Whilst you can't be expected to know the exact figure, interviewers want to see what approach you'll take to answering the question, and what steps you'd take to reach this number."

A similar question asked in an interview with British bank Rothschild was: Why do you think only a small portion of the population makes over $200k per year?

"Not only does this test your economic understanding and thought process but could be an opportunity to gauge political views and dare I say it, any exaggerated self-opinions," he said.

"Whilst these may seem a little left field, they are in fact vital to understanding how you'll consider the different variances involved in complex valuations," he said.

Then of course there are the banking interviews questions that sound simply ridiculous.

US giant Goldman Sachs asked the question: If you were shrunk to the size of a pencil and trapped in a blender, how would you get out?

"Bankers like these types of questions, as it makes you think creatively and shows them your personality, will you just be dismissive to the question or use it as a chance to show you're not just a number cruncher and have the sense of humour and quick thinking to fit in to the team," said Mr Hutchins.

Here are 10 mind-boggling questions investment bankers have been asked:

1.    If you had five red balls that contained four red balls and those red balls contained the original five red balls, then how many sets of sets of balls would I take to have a double set of red balls of varying sizes inside each next largest red ball?
2.    How many tennis balls are there in New South Wales
3.    Why do you think only a small portion of the population makes over $200k per year?
4.    If you were shrunk to the size of a pencil and trapped in a blender, how would you get out?
5.    You have 2 buckets. One full of white marbles and the other full of black marbles. How do you allocate the marbles into buckets in a way that maximizes your probability of picking 2 white ones when you pick 1 marble from each bucket?
6.    Explain to me what has happened in this country during the last 10 years.
7.    How many bricks are there in Shanghai? Consider only residential buildings
8.    How do you weigh an elephant without using a scale?
9.    Using a scale of 1 to 10, rate yourself on how weird you are?
10.    And finally: You are given two eggs. You have access to a 100-story building. Eggs can be very hard or very fragile means it may break if dropped from the first floor or may not even break if dropped from 100th floor. Both eggs are identical. You need to figure out the highest floor of a 100-story building an egg can be dropped without breaking. The question is how many drops you need to make. You are allowed to break 2 eggs in the process.

Have you been asked a crazy interview question? Tell us below

View the original article here

Sydney Airport returns to profit

SYDNEY Airport has swung back into profitability as retail and car parking revenue grew and airlines added more flights.

The airport made a net profit of $179.2 million in the 12 months to December 31, up from a $239.9 million loss in the prior corresponding period.

The calendar 2011 result was affected by a $361 million charge relating to the sale of company's stake in two European airports. Excluding the charge, net profit was up 47 per cent from the prior year.

Revenue in 2012 rose 1.3 per cent to $1.06 billion, Sydney Airport said today.

Retail revenue rose 5.3 per cent, property and car rental revenue was up 8.3 per cent and ground transport and commercial services revenue was 8.9 per cent higher.

"Successful implementation of the new car parking strategy, completed in September 2012, has expanded the product choice and enhanced the value proposition for customers," Sydney Airport said.

"Additional capacity, advanced technology, tailored products and new online booking systems all contributed to a strong second half and established the basis for ongoing business revenue growth."

International passengers rose 5.6 per cent in calendar 2012, with existing airlines boosting flight frequencies to Sydney and new carriers such as Air Asia X and Scoot starting services to the NSW capital.

Domestic passengers were up 2.7 per cent, as Tiger Airways opened a base at the airport with four aircraft and Jetstar added significant capacity.

Sydney Airport said earnings before interest, tax, depreciation and amortisation (EBITDA) rose 7.4 per cent to $848 million.

Chief executive Kerrie Mather said 2013 had started strongly, with international passenger numbers up 3.9 per cent so far.

"Management will continue to market Sydney Airport to our airline customers and work closely with our industry and government partners to drive tourism growth," Ms Mather said.

"When combined with new business initiatives and our prudent management of expenses and capital, we remain committed to delivering EBITDA and cash flow growth significantly above passenger growth."

Sydney Airport declared a full year distribution of 21 cents per stapled security.

View the original article here

Don't be thrown by sharemarket bulls

There are bound to be some bumps along the way in the sharemarket's recovery. Source: Supplied

GLOBAL financial crisis? What global financial crisis?

According to global sharemarkets, the world is just hunky dory and it's party time.

Take a look at the figures. Australia's market is up 17 per cent since November, a 9 per cent rise this year to four-year highs. America's S&P 500 index is up 7 per cent this year to five-year highs.

The start of 2013 has been a boom time for share investors and this has flowed through to strong superannuation returns. This psychological impact has rippled through to better business and consumer confidence.

Everyone is starting to feel wealthy again and that worries us.

Take a deep breath and think about a couple of things:
* Your shares may have gone up in value but you haven't made a profit until you sell.

* The market can't possibly keep up its current pace because, over the year, that would translate into a 70 per cent gain that's not going to happen.

* Over the past 20 years the average annual rise on the Australian sharemarket has been 11.7 per cent, 11.5 per cent over the past 10 years and 2 per cent over the past five years.

As investors we find it incredibly easy to buy a stock but incredibly difficult to sell and, hopefully, make a profit. Most seem to marry their stocks and ride them up, then down.

It's times like these that many investors lose their discipline and almost become emotionally attached to rising prices. No matter the state of the market, it's important to stick to your individual strategy and to bank profits.

The best strategies are always to get good advice and keep yourself well informed, but there are benefits in developing a strict investment strategy using specific disciplines or formulas to take the "emotion" out of investing.

The first major formula strategy is the percentage plan, with its emphasis on care in bull markets and courage in bear markets. Buy as prices rise and switch, or sell as they fall.

How does it work? First, decide what percentage of your investment portfolio should be in shares and how much in fixed interest and property.

Under this strategy, at appropriate time intervals (say, six months), buy or sell shares to restore or maintain the ratio you have set, no matter what the level of the sharemarket.

Suppose you start off with $20,000 and decide to have 80 per cent in good quality shares and the remaining 20 per cent in fixed interest.

Six months later the market has risen and the portfolio is now worth $23,000. The shares are worth $19,000, about 83 per cent of the total. Under the plan, sell $600 worth of shares to cut the holdings to $18,400, the pre-determined 80 per cent of the total $23,000. The $600, less commissions, goes into fixed interest.

Likewise, if the market declines over the next six months and the portfolio is worth only $18,000, with the shares valued at $14,000, buy more shares.

The shares are only 77 per cent of the total, so take $400 from the cash trust to bring the shares back to 80 per cent.

The key is to follow the plan, however nervous or frightened you may be that the market could drop further.

With all formula plans, learn to accept that falling prices are a chance to invest more at lower prices to compensate for paper losses. It is not easy.

As a more conservative approach, the 10 per cent rule can be applied sell a stock when the total value drops more than 10 per cent below its most recent high, and start buying again when the value rises to 10 per cent above the most recent low.

So-called stop orders can also be useful. When you reach a share selling point in a rising market, place stop orders to sell a few points below the current market level. Then, should the uptrend continue, you won't sell the shares too soon.

A big mistake many investors make is they are either completely in or out of a stock. Smart investors may sell 10 per of their holding in a stock if it's up, say, 20 per cent. They might sell another 10 per cent if it's up 30 per cent and so on. They are constantly banking profits.

If you are wondering how to pick the right stocks to use in these investment plans, find a good broker and be prepared to do some homework. Read the finance pages for news on company results and prospects.

THINK ABOUT SELLING WHEN:
* A stock has a very high price-to-earnings ratio.

* The company's competitive advantage is in danger.

* There's a drastic changes in its direction or leadership.

* Sales are falling.

* Profit margins (and earnings) are shrinking.

* It's dividend payment is cut.

RATES CHOICE
IF YOU'RE waiting for another interest cut next month, don't hold your breath. The minutes from the most recent Reserve Bank Board meeting show that it will need another major financial crisis in Europe to prompt any further cuts.

At a time when the major banks are cutting fixed-rate home loans to stimulate borrowing (with some anticipating two or three rate cuts this year), the RBA minutes show the board is very happy with the way our economy is performing.

The RBA also praised Chinese authorities for the way they engineered a "soft" landing for that economy and they're also pleased with the signs of recovery from the US.

So it looks as though the RBA will be on the interest rate sidelines for the foreseeable future.

But, as hard as it is to believe, there is a strong chance the major banks will independently cut their loan rates.

Funding costs of the banks are falling and they need to stimulate more borrowing from conservative customers.

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Banks launch technology war

Managing money is getting a boost from technology. Source: National Features

TECHNOLOGY advances that make it easier to manage our money have become a new battleground for banks and other financial institutions.

Only 20 per cent of Australians receive full financial advice, and an explosion of online tools and apps is under way that will help fill the void.

The Commonwealth Bank this month launched MyWealth, which targets Australia's three million self-directed investors with an online platform that lets them do banking and invest in shares and funds with one login.

CBA expects competition and chief innovation officer for equities and margin lending Lisa Frazier says the way people manage their wealth is changing.

"The technology is the core enabler," she says. "This is just the beginning and we are now working on property and superannuation.

"Customers tell us: 'We are in control and make the decisions'."

A sticking point in managing money online has been the fact many people use multiple providers for their banking, shares and super, and the providers don't share data.

However, this is likely to change and Frazier says sharing is already happening in the US.

New apps are being rolled out regularly with a growing list of features. National Australia Bank's new Money Tracker app "learns" from its experiences with its users, remembers transactions for use in the future, and suggests budget targets for them.

NAB executive general manager direct banking Sam Plowman says people want helpful and intuitive automation.

"A customer can forecast what their financial position will be in 10 years based on current income and expenses," he says. "They can then input 'what if' scenarios, such as 'what if I got a pay rise of $5000 in year three and then purchased a house in year seven'."

New research by State Custodians Mortgage Company found 83 per cent of Australians prefer managing their money online, and 73 per cent are using apps to manage their finances.

"People want to be able to use their mobile phones to access their financial information and fast," says State Custodians chief executive Heidi Armstrong. "Australians are technology-savvy and expect financial advice or information within a matter of minutes."

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$1m in super may not be enough

Superannuation delays are annoying fund members. Source: Supplied

ANY Federal Government move on superannuation risks setting the retirement system up for failure, national accounting firm Chan & Naylor warns.

Superannuation is again on the political agenda amid ongoing speculation the Labor Government could again rejig superannuation tax concessions, particularly for high earners, in the May Budget.

While Prime Minister Julia Gillard has ruled out tax changes on withdrawals by those with higher balances, the Government has so far declined to respond to other concerns.

Chan & Naylor director Ken Raiss says those holding $1 million in retirement savings are under the spotlight.

"During recent weeks of political tax-grab barracking, the government has successfully managed to stigmatise Australian retirees who have managed to set aside their own monies for independent retirement," he said today.

At the same time, the Government risked eroding confidence in superannuation.

While $1 million was a considerable sum in today's terms, once medical and aged care costs are factored in it could be inadequate.

Chan & Naylor forecasts a $1 million pension fund in today's money will need to be at least $2.5 million in 30 years time.

"In simple terms, Australians are going to need more retirement income and the government of the day is doing surprisingly little to help," Mr Raiss said.

Meanwhile, a survey by human resources consultants Aon Hewitt shows 58 per cent of businesses are still to determine how they will respond to increases in the superannuation guarantee for low paid workers.

The guarantee will initially rise to 9.25 per cent, from nine per cent, from July 1 this year. It will then continue to increase incrementally to 12 per cent by 2019/20.

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Working from home mark of 'modern' workplace

FLEXIBILITY is “just part of the modern workplace” and organisations should not view employee requests to work from home as “too hard”, according to a workplace law firm.

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Shares close higher on despite euro concerns

Political uncertainty remaining the dominant theme for European markets.

The Australian market has opened higher following strong leads from US markets. Live updates throughout the day. All times in AEDT.

1.11pm: Steady growth forecast for economy
Global credit rating agency Standard & Poor's expects Australian economic growth will remain close to trend in coming years, as public debt peaks at a low level.

But S&P, which rates Australia at a top ranking triple-A with a stable outlook, says the local economy does have vulnerabilities.

"The economy holds a large amount of offshore debt, households retain substantial debt because of high house prices and its banks are reliant on foreign investor funding," associate director Craig Michaels said.

12.35pm: Stocks continue to rise

The Australian share market continued to rise in morning trade after a strong session on Wall Street and the release of mostly encouraging earnings reports locally.

At 12.03pm AEDT today, the benchmark S&P/ASX200 index was up 31.1 points, or 0.62 per cent, at 5034.7 points, while the broader All Ordinaries index was up 30.4 points, or 0.61 per cent, to 5052.3 points.

On the ASX 24, the March share price index futures contract was up 37 points at 5015 points, with 14,085 contracts traded.

"Corporate reports seem to be okay today, and reporting this month has been in line with expectations, with the odd surprise and the odd disappointment," Burrell Stockbroking director Richard Herring said. "So, it's been quite encouraging, given the wider market's expectation of complete disappointment, in terms of earnings."

11.32am: ABS figures just out
Total construction work done in Australia fell 0.1 per cent in the December quarter, according to official data.
The median forecast among economists was for total construction work done to have risen 1.5 per cent for the quarter.

Over the year to the December quarter, the volume of construction work done was up 11.9 per cent, the Australian Bureau of Statistics said on Wednesday.

The ABS said total building work done in the December quarter, including homes and non-residential buildings
like offices and shops, rose 1.8 per cent from the September quarter.

Engineering work done, which includes mines, roads, bridges and the like, was down 1.3 per cent in the quarter.

11.10am: Dollar edges higher against Euro
The dollar edged higher against the euro after Ben Bernanke confirmed the US Fed's stimulus program would continue, while the yen traded flat ahead of the nomination of a new Bank of Japan chief. At 09.00 AEDT the euro was at $1.3061, compared to $1.3065 late on Monday.

11.05am: Here's some of the biggest losers and gainers from CommSec:

10.55am: Positive comments from Ben Bernanke yesterday in relation to quantitative easing (pumping money into the system) gave investors confidence and is having a knock on affect on our markets after yesterday's sell-off.
IG Markets analyst Stan Shamu said:

"We did see a massive turnaround in US trade, triggered mainly by some better than expected economic data, with consumer sentiment coming in much stronger than expected. Especially with (US Federal Reserve Chairman) Dr Ben Bernanke coming out with that testimony (to Congress), that really calmed investors' nerves about quantitative easing. It certainly seems like we've got some positive momentum behind us."

10.40am: From the companies reporting today:

• Westfield Group gained 12 cents, or 1.08 per cent, to $11.20.
• James Hardie's stocks were also up 12 cents, or 1.28 per cent, to $9.47 at 1033 AEST
• AGL Energy put on 56 cents, or 3.69 per cent, to $15.75
• UGL fell 48 cents, or 4.4 per cent, to $10.42

10.23am: At 10.23am (AEDT), the benchmark S&P/ASX200 index was up 37.2 points, or 0.74 per cent, at 5040.8, while the broader All Ordinaries index was up 35.3 points, or 0.70 per cent, at 5057.1.

On the ASX 24, the March share price index futures contract was up 46 points at 5024, with 9,487 contracts traded.

Stock Move Price

• AMP +0.03% to $5.36
• ANZ Bank +0.09% to $28.25
• BHPBilton +0.21% to $36.56
• CBA 0.63% to $66.10
• NAB 0.14% to $30.09
• NewsCorp +0.41% to $28.13
• Rio Tinto +0.50% to $66.07
• TelstraCp +0.015% to $4.61
• WestpacBk +0.12% to $30.35
• Woodside +0.09% to $36.43
• Woolwrths +0.25% to $34.19

10.05am: AT THE OPEN: The benchmark S&P/ASX200 index was up 16.83, or 0.34 per cent, at 5020.3 points.

9.50: Building products group James Hardie has trimmed its earnings forecast for the year, saying conditions in the housing market remain uncertain.

The group on Wednesday revealed it had made a net operating profit of $US31.5 million ($A30.95 million) in the third quarter to December 31, up from a loss of $US4.8 million ($A4.72 million) a year earlier.

The results include the company's asbestos-related costs, plus regulatory costs and tax adjustments.

Excluding those costs, operating profit rose to $US28.8 million ($A28.29 million) from $US27.7 million ($A27.21 million).

Chief executive Louis Gries said that while the US housing market had gained momentum, earnings growth had been constrained by lower sales prices and higher costs.

But, he said, if the US market continued its recovery, earnings were expected to rise.

9.45am: Engineering firm UGL's first half profit has slumped by 53 per cent due to $25 million in costs from a restructure.

UGL made a net profit of $26 million in the six months to December 31, down from $55.4 million in the previous corresponding period.

Underlying net profit, which excludes the costs of its restructure and rebranding of one of its businesses, was $51 million in the six months to December, down from $72.2 million in the previous corresponding period.

9.30am: Half an hour until market opens. In the mean time let's have a quick look at how Italy has sent the markets into a frenzy:

The Italian connection:
The Italian election sent European stocks plummeting overnight. Former Prime Minister Silvio Berlusconi almost got re-elected, sending all the austerity measures implemented by Mario Moni into doubt. Eoin Doyle wrote:

The fear is that a divided parliament in Italy would make the implementation of the austerity medicine (cutting public debt and spending) more difficult and would put a spanner in the works of the European recovery project - something that makes markets very nervous.

Italy is Europe’s third largest economy and how it performs and who is in power matters.

Read more on How Italian voters tanked global markets here.

8.50am: AGL Energy's acquisition of a major Victorian power plant has contributed to a significant rise in first half profit to $365 million.

AGL acquired Loy Yang A, Australia's third largest coal fired power station, in June 2012.

The contribution of earnings from Loy Yang helped AGL's net profit in the six months to December 31 rise from $117 million in the previous corresponding period. Read more here

8.45am: Westfield Group lifts profits
Shopping centre developer Westfield Group's annual profit has grown by 18 per cent as income from its centres across the world increased.

The group, which manages 105 shopping centres in five countries, made a $1.72 billion profit in the year to December 31, up from $1.532 billion in 2011.

Joint chief executives Peter Lowy and Steven Lowy said 2012 was a year in which the company made several changes to its property portfolio as it aims to improve its returns to shareholders.

"The performance for the year has been very good and in line with expectations," they said today.

7.00am: The Australian market looks set to open higher after a positive performance on Wall Street buoyed by upbeat earnings results and after Federal Reserve chairman Ben Bernanke said US economic growth had rebounded from the fourth quarter.

At 6.30am AEDT today, the March share price index futures contract was up 20 points at 4998.

Making news today:

Economic news
In economic news today, the Australian Bureau of Statistics is due to release construction work done, December quarter, figures.

Company news:

• Westfield Group full year results
• Sydney Airport full year results
• Prime Media Group first half results
• Slater & Gordon first half results
• Wotif.com first half results
• AGL Energy first half results
• UGL first half results
• James Hardie Industries third quarter results

At the close yesterday
In Australia, the market yesterday closed lower but pared back earlier heavy falls.

The benchmark S&P/ASX200 index closed down 52.2 points, or 1.03 per cent, at 5003.6 points, while the broader All Ordinaries index had fallen 50.9 points, or 1.0 per cent, to 5021.8 points.

Dollar
The Australian dollar is lower against a stronger greenback following improved US economic figures.

At 6.30am AEDT today, the currency was trading at 102.42 US cents, down from 102.83 US cents yesterday.

The Australian dollar weakened overnight after improved American consumer confidence and housing data lifted the US dollar.

The Conference Board's consumer confidence index hit 69.6 in the month of February, while the Commerce Department reported a 15.6 per cent increase in new home sales, the biggest increase in nearly two decades.

What happened overnight:
Europe
European stock markets have slumped as dealers assess the fallout of Italy's political impasse after elections in the indebted eurozone country.

Milan's FTSE MIB index tumbled 4.89 per cent to end the day at 16,552 points, with deadlock in Italy's parliament.

London's FTSE 100 index of leading companies fell 1.34 per cent to 6270.44 points, and Frankfurt's DAX 30 shed 2.27 per cent to 7597.11 points.

In Paris, the CAC 40 shed 2.67 per cent to 3621.92 points, as shares in European banks tumbled, while Madrid's IBEX 35 index dived 3.2 per cent to 7980.7 points on fresh fears of eurozone instability.

The price of gold, which is often seen as a haven in times of economic unrest, grew to $1590.50 an ounce from $1586.25 yesterday in New York.

US stocks open higher
US stocks have opened solidly higher in anticipation of congressional testimony by Federal Reserve Chairman Ben Bernanke.

The markets are also being buoyed by upbeat earnings results, including figures from home-improvement retailer Home Depot.

Fifteen minutes into trade, the Dow Jones Industrial Average was up 83.01 points (0.60 per cent) to 13,867.18.

The broad-based S&P 500 jumped 7.45 points (0.50 per cent) to 1495.30, while the tech-rich Nasdaq Composite Index rose 7.28 points (0.23 per cent) to 3123.53.

The gains partially offset deep losses sustained yesterday in the wake of the uncertain outcome of the Italian elections.

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Talented women urged to bring baby to work

CHILDCARE and breastfeeding breaks offered after firm finds most new mums don't return.

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It's still jobs for boys in the Aussie office

MEN are muscling female workers out of the office - even in industries traditionally dominated by women.

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Macmahon to post loss before new future

MINING services company MacMahon Holdings will post a loss of up to $20 million this financial year because of its troubled construction business.

But the sale of the construction operations, approved by shareholders yesterday, will enable the company to focus on its better performing mining operations, it said today.

MacMahon made a net loss of $60.7 million in the six months to December 31, due to almost $61 million in writedowns on its construction projects.

Leighton Holdings has bought all of the construction business' projects, and costs associated with the sale, plus ongoing losses, are expected to lead to a loss of between $10 million and $20 million for Macmahon in the full 2012/13 financial year, Macmahon chief executive Ross Carroll said.

Macmahon shares were down two cents, or 5.9 per cent, at 32 cents at 11.29am AEDT.

Macmahon's mining business made a profit before tax of $38.4 million in the six months to December, up 20 per cent on the previous corresponding period.

The business provides drilling, blasting and other services for clients including BHP Billiton and Fortescue Metals Group.

Macmahon expects it to make a pre-tax profit of more than $85 million in the year to June 30.

"The recent growth of our mining business in a time of challenging market conditions highlights its sustainability and holds the company in good stead for its mining focused future," Mr Carroll said.

Leighton chief executive Hamish Tyrwhitt said Macmahon's construction contracts would now begin transferring to the John Holland business, expanding that company's presence in the Northern Territory.

"We are planning a seamless transition of the projects," Mr Tyrwhitt said.

Indian-owned firm Sembawang Australia had also been trying to buy MacMahon's construction business, and has vowed to maintain its interest despite shareholders approving Leighton's purchase.

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Eddy Groves to face trial in May

Wasabi: From hobby to global business

TASMANIA'S Shima Wasabi, or "Island Wasabi", was a hobby for seven years before it turned pro.

Kid's brutally honest cover letter lands Wall St job

STUDENT sends honest cover letter promising 'no special skills' when trying to land a position in a Wall Street bank. Now lots of people are trying to hire him. Here's what the letter said.

Investors eyeing new jobs figures

AROUND 10,000 Australian jobs are expected to have been lost in December as consumer and business confidence falters.

Franchise review raises questions

THE Federal Government has moved to review its Franchising Code but criticism has already surfaced about its limited scope.

Review tax systems to save your business

BUSINESSES have six months to get their tax settings right, experts say.

How to make your good business great

THINGS are chugging along nicely. You've kept your head above water, maintained customers, made a profit and retained your talented staff.

Busting financial jargon

IT HAS been a rich period for financial jargon as the upheaval in the global economy unearths the literary talents of many.

GST weighs down small businesses

COLLECTING the GST costs Australian small businesses a much bigger amount than comparable overseas countries, new research has found.

'Search for semi-skimmed milk returned zero results'

THE sometimes excruciating process of online shopping has been sent up in a series of videos, showing supermarket shoppers face hurdles such as '404 not found' errors.

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