Telstra rejects NBN negotiation rumours: Economy roundup

Telecommunications giant Telstra has rejected rumours it has concluded negotiations with the Government regarding the National Broadband Network after a spike in the trade of its shares.

In a statement to the Australian Securities Exchange, Telstra said the rumours were unfounded and that it has not sealed a deal to sell its copper network for $9.2 billion.

“Telstra has become aware of a market rumour regarding the conclusion of National Broadband Network (“NBN”) negotiations. This rumour is unfounded,” it said in the statement.

“As we have previously advised the market in our ASX announcement of 19 March, negotiations are continuing in relation to NBN.”

The announcement come after Telstra shares jumped on Tuesday afternoon, with 124 million shares traded in the last hour of the day, well above the 55 million average.

Negotiations with the Government are ongoing. But recently, communications minister Stephen Conroy has said the two parties are now closer to the point where a decision must be made on whether Telstra’s networks will be sold.

Meanwhile, the Australian Competition and Consumer Commission has said it will not oppose the $3.45 billion acquisition of coal seam gas manufacturer Arrow Energy by Royal Dutch Shell and PetroChina.

The ACCC said that given the number of competing suppliers in the market, the acquisition would not lower competition.

Business owners’ confidence has stalled with only 54% of SMEs expecting to see a recovery in the next year, the latest MYOB Business Monitor survey has revealed.

The survey found the number of businesses recording drops in revenue are higher than those recording increases in revenue, and that businesses in the agriculture, manufacturing and wholesale industries are least confident of a recovery.

Within those sectors, 49% of owners reported a decrease in revenue over the past 12 months compared to 36% of businesses overall. MYOB chief executive Tim Reed said the survey shows how small businesses are still struggling.

“These results are telling us that while a small majority of small to medium sized business owners believe the economy will improve this year, a significant proportion still do not expect a recovery,” Reed said.

“As more than a third of business owners report sustained levels of revenue loss with no changes in their sales pipeline projections for the 2009-10 financial year, they are taking a far more conservative view of the economic recovery than some of the leading industry commentators.”

Shares higher after solid Wall Street tech leads

The Australian sharemarket has opened higher today following strong leads on Wall Street, where stocks were pushed up due to good financial results, especially from chip manufacturer Intel.

The benchmark S&P/ASX200 index was up 26 points or 0.53% to 4977.9 at 12.00 AEST, while the Australian dollar opened slightly higher to US92c.

ANZ shares gained 1.1% to $25.70, while Commonwealth Bank shares rose 0.8% to $58.54. NAB gained 0.9% to $27.80 while Westpac rose 0.9% to $28.00.

Macquarie Bank has agreed to purchase an aircraft operating lease portfolio from the International Finance Corporation for $US1.67 billion. Macquarie will purchase 47 aircraft, with another six to be acquired by Macquarie AirFinance.

“This transaction leverages Macquarie’s existing expertise in asset leasing, demonstrates the strength of our aircraft management capabilities and diversifies the client base of our aircraft fleet,” Macquarie Group chief financial officer Greg Ward said.

“The acquisition builds on Macquarie’s existing leasing business in the aircraft sector and Macquarie’s substantial experience in the leasing of assets through its Corporate and Asset Finance division (CAF) which has loans and leases under management of $13.8 billion.”

DMC Mining has said it has received interest from a third party regarding a bid off-market, and has said it is a superior deal to that offered by Cape Lambert Resources in March.

“(The offer) is at a price that is superior to the Cape Lambert Offer and could potentially lead to a transaction that returns more value to shareholders than the Cape Lambert offer,” DMC said in a statement to the Australian Securities Exchange.

“The directors intend to enter into further discussions and negotiations with the party that has provided the Notification of Interest…However, there is no certainty that these discussions will lead to a competing transaction.”

Toho rejects CBH acquisition bid

CBH Resources’ major shareholder, Japanese group Toho Zinc, has rejected a revised takeover proposal for CBH from Russian mining group Nystar.

“Subject to the customary reservations… Toho Zinc does not presently intend to accept any offer by Nyrstar for Toho’s CBH shares or notes if made on the terms and conditions set out in the… Nyrstar proposal,” Toho said in a statement.

It added the proposal was “highly conditional”, as well as “incomplete, non-binding and is not an offer”.

In the US, Federal Reserve officials have again discussed the possibility of raising the official interest rate charged on emergency loans to banks, according to the minutes of a March meeting released overnight.

“Some directors favoured taking a further step at this time toward the discount rate structure that existed before the crisis,” the central bank said. “These directors favoured increasing the primary credit rate by 25 basis points…”

The minutes also state officials were concerned about the economy recovery, saying businesses were cautious about capital spending and the “flat” job market.

On Wall Street, stocks remained above the 11,000-point mark as earnings from banks and tech companies kept investors happy. The Dow Jones Industrial Average gained 13 points or 0.12% to 11,019.42.

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