BUSINESS NEWS

TELSTRA SALE IS ON
Last nights action in the Senate effectively gave the go-ahead to the Government selling the balance of Telstra. While many figures have been put forward as to how much it could realise, today’s comments by experienced commentators mostly warn of the dismal price performance by the present shares and no one should be expecting a bonanza.

BAD OIL SIGNALS
With the price of oil having reached $US67 a barrel following steady increases, concern is rising just as fast. This for mid-August is bad news taking into account the present seasonal lows in the US. It’s definitely a bad sign for the up-coming northern hemisphere winter.

REAL BUSINESS WEALTH
This year’s BRW Rich 200 list shows again that property is the leader for business wealth with an 8 percent growth over last year and nearly 30 percent of the entire list. But the biggest growth in the number of wealthy named was in investment at 15 percent over last year. The industries, which dropped, included retail, manufacturing, rural, technology, transport and entertainment.

INSURANCE & SUPA COSTS
A study for the Investment & Financial Services Association has found multi-industry superannuation funds are charging higher premiums compared to large retail corporate funds. This is the case with the latter being mostly chosen by most employers and the majority of results currently available show the industry funds are giving better returns.

BUSINESS OUTLOOK

CONSUMER CONFIDENCE RETURNING
The RBA action of holding off on interest rate increases and issuing good reports on the economy is filtering through to consumer level with confidence on the increase. The only negative aspect of the news is the worry over petrol price increases.

HOMES CONTINUE TO SOFTEN
Further reacting to the March interest rate rise, home loan approvals continue to be soft even though a limited increase in new home buyers have returned, while the Sydney market continues to be low with observers saying it has bottomed. Meanwhile in the USA, house prices continue to increase despite the Federal Reserve raising interest rates.

FAMILY BUSINESSES DECLINE
While families own more than 60 percent of all Australian companies, including 63 percent of those in BRW’s top 500 private companies, they are in decline, according to BRW. Research reveals the post war boom that saw such businesses rapidly grow while selling to an expanding population, is now showing signs of reversal due to many factors which includes lack of family succession and inability to expand. The average age of the owner is now near 60, the average age of the business is 36 and they employ over 50 percent of the workforce.