BUSINESS NEWS
SHAREHOLDER REVOLT
This year's annual results reporting season has seen many good
corporate results but has also been marked by the way an increased
number of shareholders are objecting to directors’ pay increases.
The Australian Shareholders Association is among the leading objectors
now motivating shareholders to vote against unreasonable increases
at AGMs.
SHORT BY $250 MILLION
The last inside information on the sale the Myer chain from the
Coles Myer head office, is that there are nearly 20 companies
making noises about buying the 61 department stores. But while
the owner is setting the asking price at $700 million, most retail
analysts position it at more like $450 million. Meanwhile, the
Myer CEO has taken a pay cut from $3.3 to $2.7 million.
FORD & HOLDEN FORCED TO SELL HARDER
After nearly half a century of market dominance, the bullet-proof
top positions of the Aussie car is coming under serious pressure,
despite total vehicle sales continuing to be very strong. The
previous top selling Commodore and Falcon are now being chased
and displaced from the top spots by smaller more fuel efficient
cars. What the US-owned makers previously dismissed as a short
term sales blip is now turning out to be more long term. The Corolla
is the biggest winner from the market shift.
BUSINESS
OUTLOOK
RBA WARNS ON INFLATION
As part of its pro-active method of communicating its decisions,
the Reserve Bank of Australia has issued a strong warning on interest
rates. In pointing to continued inflationary pressures, the RBA
said if rising inflation exceeds 3 percent, then its policy ‘will
have to be responsive’. The markets predictably took that
as meaning future monthly interest rates announcements could see
the basic rate increase 5.5 to 5.75 percent unless the inflation
rate begins to level off at its present 3 percent.
GUESSING THE RISE
Many analysts are now going public on the guessing game of predicting
when the RBA will be forced to increase the basic cash rate. A
quick round-up of the punters shows most are opting for early
in the new year with February or March being the most popular.
Few go beyond June in saying an inevitable lift can be put off
further.
ALL EYES ON XMAS
With the next big test on the economy being the size of consumer
spending this Christmas, Dunn & Bradstreet have come out with
a report that insists the recent petrol price increases have not
made a lasting dent on consumer confidence. They have given the
thumbs-up for the Christmas and January sales periods.
CONSUMERS FEEL BETTER
According to a major consumer confidence survey, the bad feelings
and worries among consumers which peaked in October, have taken
a marked improvement. The Consumer Inflationary Expectations data
shows the fears of the previous few months - fuelled by the then
rising petrol prices - have given way to a more positive mood
on the run-up to Christmas.
