Housing finance up 2.8% in October, Company at centre of NZ coal mine disaster collapses: Economy Roundup

The total value of owner-occupied housing finance rose by a seasonally adjusted 2.8% in October, according to the latest figure from the Australian Bureau of Statistics.

The result puts housing finance at $14.16 billion from $13.77 billion.

Personal finance commitments dropped by 0.4% to $7.59 billion, with commercial finance up 5.2% to $29.6 billion. Lease finance rose 3.1% to $416 million.

Reserve Bank of Australia governor Glenn Stevens has told the Senate inquiry into banking competition that the sector is more competitive than it was during the 1990s.

“This changed attitude to risk has affected the locus of competitive forces,” he said.

“That said, the market remains a good deal more competitive than it was in the mid-1990s and borrowers have access to a much larger range of products.”

Stevens also pointed out that market players want taxpayers to take on higher prices through regulation, but also said that plan needs consideration from government. He also warns that intervention in housing markets needs to be considered carefully.

“The US shows that excess public intervention in the housing market can go wrong,” he said.

Stevens also noted that he was not a preacher of doom regarding debt. “My view is that we have managed fairly well, but we should not push our luck by doing too much from here and gearing up further,” he said.

Stevens’ comments come just after Treasurer Wayne Swan announced a package of banking reform measures yesterday, that include a push to outlaw exit fees on mortgages.

New Zealand mining group Pike River, the company at the centre of the recent coal mine disaster, has fallen into receivership.

New Zealand Oil and Gas holds a 29.4% stake in the company, and recently provided the company with $12 million in funding.

“We expect that announcement to be concluded in the next hour,” the company said in a statement. “We request a trading halt that will be ended by an announcement on the appointment of receivers for Pike River Coal.”

Shares higher after weak overseas leads

The Australian sharemarket has opened higher this morning despite a mixed lead from overseas markets late last week.

The benchmark S&P/ASX200 index was up 23 points or 0.4% to 4769.3 at 12.20 AEST, while the Australian dollar also remained steady at US98c.

AMP shares gained 0.2% to $5.20 as Commonwealth Bank shares rose 0.7% to $50.95. NAB rose 0.8% to $24.42 as Westpac grew 0.8% to $22.75.

Transfield Services has said it will buy Queensland resources services group Easternwell for $575 million and will sell new shares to fund the deal.

The company said it expects the purchase will add over $40 million to the group’s earnings before EBITDA, in the six months to June 2011.

“This acquisition is consistent with our stated strategic objective to expand our services and capabilities into adjacent sectors and to pursue higher value work,” Transfield Services chief executive Peter Goode said in a statement.

“Acquiring Easternwell enable Transfield Services to build out its existing suite of operations and maintenance services to include higher margin technical services.”

IronClad Mining and Trafford Resources have now entered trading halts ahead of suspected announcements regarding capital raisings.

The companies are seeking the bring the Wilcherry Hill magnetite joint venture into production. The project consists of five areas, some jointly owned, and are suspected to hold one billion tonnes of iron magnetite.

Fairfax to acquire TenderLink

Fairfax Media is set to acquire TenderLink.com in a deal worth $NZ21.6 million, with the company saying it will sit well alongside its existing portfolio.

“TenderLink fits our strategy of acquiring high growth transactional businesses that provide services to the SME market,” Fairfax Digital chief executive officer Jack Matthews says.

“Combining TenderLink with our digital network, this already profitable business has considerable further potential for grow.”

Meanwhile, the Australian Financial Review has reported that Rolls-Royce is set to provide a report to Qantas this week outlining what needs to be done to its existing A380 craft before they can head back into service.

“Rolls-Royce are telling us that within a week they will give us a plan about how to be comfortable with flying the LA route again,” Qantas chief executive Alan Joyce told the AFR.

“We’re going to have to run some sort of marketing campaign [to restore confidence] and that’s going to be part of what we will be claiming.”


Notify of
Inline Feedbacks
View all comments
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Forgot your password?

Want some assistance?

Contact us on: support@smartcompany.com.au or call the hotline: +61 (03) 8623 9900.