Business lending slumped in May, while personal finance moved higher, according to data from the Australian Bureau of Statistics.
Total business finance commitments sank a seasonally adjusted 12% in the month to $31.022 billion, compared to a downwardly revised $35.244 billion in April.
Personal lending edged up 0.4% in seasonally adjusted terms to $7.438 billion, against an upwardly revised $7.315 billion last month.
Lease finance rose 3.2 per cent to $569 million, compared with $551 million in April.
Housing finance for owner occupation rose 0.2% to $13.637 billion, from $13.610 billion the month before.
Seven West to raise $440 million in share sale
The Kerry Stokes-controlled media group Seven West Media is lining up a $440 million share sale, looking to raise funds to pay down debt with its earnings hit by an advertising slump.
The company also said earnings for the financial year just ended may come in slightly above earlier guidance.
Seven West this morning had its shares placed in a trading halt on the ASX.
The company said it plans to raise approximately $440 million from the sale of additional shares and is seeking to cut its net debt to about $1.44 billion from $1.875 billion with the one-for-two offering.
Home building to fall to pre financial crisis lows
Conditions in the housing industry are set to deteriorate for the first half of 2012 according to the Housing Industry Association.
Following an 11.2% fall in housing starts in 2011, HIA is forecasting an 11.5% decline in starts in 2012, to a level of just 133,420.
This forecast reflects a marked deterioration in most leading indicators combined with a fall in quarterly housing starts in March 2012 to levels significantly below those during the financial crisis.
“We are experiencing a combination of softer housing demand and high-cost housing supply, which together mean that the nation is under-building by a significant amount,” said HIA chief economist Harley Dale.
“Put simply, Australian consumers are nervous about the global and domestic economies, and meanwhile around $200,000 of the price of a new home is due to taxation. It’s an unsustainable situation.”
Australian sharemarket stronger
The Australian sharemarket opened almost 1% stronger after Wall St closed higher over the weekend amid expectations the China will act to stimulate its economy.
At the market opening the benchmark S&P/ASX 200 index rose 0.96% t to 4121.3 points, while the broader All Ordinaries Index lifted 0.94% to 4157.2 points.
Ric Spooner, chief market analyst at CMC Markets, said confidence, although brittle, has the potential for further improvement against a background of ongoing stimulus initiatives in China and stabilisation of the situation in Europe.
“The Australian market will be encouraged this morning by comments from China’s Premier Wen Jiabao recognising that although within target, momentum for recovery in growth was not yet in place,” he said.
“This leaves the way open for further stimulus initiatives.”