Consumer confidence only rose slightly during June despite talk of interest rate cuts, according to the latest figures from the Westpac-Melbourne Institute Index of Consumer Sentiment.
The bank said sentiment only increased by 0.3% in June from 95.3 points to 95.5.
“This is another disappointing result,” Westpac chief economist Bill Evans said in a statement. “Clearly other factors are dominating rates in the minds of consumers – those factors are concerns about the domestic economy and international conditions.”
Sentiment remains 1.7% below the October 2011 level despite interest rates having fallen 125 basis points.
“Clearly other factors are dominating rates in the minds of consumers – those factors are concerns about the domestic economy and international conditions,” said Evans.
“Evidence from today’s survey confirms the fragility of confidence and the critical role played by the global economic situation in impacting confidence,” he said.
The result comes after NAB released its monthly business index yesterday, indicating SME confidence is continuing to fall.
Westpac said the measure of consumers’ outlook for conditions over the next 12 months fell 0.2%, while the index for the next five years fell by 3.8%.
Macquarie Group purchases 5% stake in Echo
Macquarie Group has purchased a 5% stake in casino operator Echo Entertainment Group.
Echo said in a statement to the ASX this morning Macquarie had become a substantial shareholder having acquired 35 million shares.
Echo said yesterday it would undertake a capital raising, but that the amount would be undisclosed.
Market down on more bank fears
The Australian sharemarket has fallen this morning despite a strong night on US markets, where speculation continued to grow over another round of stimulus from the Federal Bank.
The benchmark S&P/ASX200 index was down 17.1 points or 0.4% to 4055.8 at 12.00 AEST, while the Australian dollar hovered at US99c.
In the United States, the Dow Jones Industrial Average rose 162 points or 1.3% to 12,573.8.
Seek abandons plans to raise $125 million
Jobs website Seek had announced its intentions to issue subordinated notes through an offer to eligible shareholders, as well as through a bookbuild with retail brokers and institutional investors.
However, today Seek said it would no longer proceed with the offer.
“Seek was not satisfied that it would achieve acceptable terms at this point in time and believes it is not in the best interests of shareholders to proceed,” the company said in a statement.
The funds were going to be used to reduce part of the company’s debt and to provide flexibility to fund new investments in its business.
Shares in Seek fell on the news to $6.55.
RBA says dollar will stay strong
Reserve Bank governor Glenn Stevens says the Australian dollar is ”pretty high” and the strength will probably be sustained through the mining boom.
Stevens said in a speech today to the Prime Minister’s Economic Forum in Brisbane that the high dollar was a “test of adaptability” for business.
”While I’m very conscious that a number of sectors are really struggling with the exchange rate where it is, we shouldn’t wish too quickly for a low exchange rate.”