Global conditions on the rise, RBA claims: Midday roundup

Global economic conditions are improving and higher inflation readings could result in more interest rate cuts, according to the latest minutes released by the Reserve Bank of Australia.

In the minutes of its February meeting, the RBA stated global economic conditions are on the rise, citing the improved economic situation in the United States and more positive data coming from China.

“In the major advanced economies, members noted that the improved sentiment and better economic data had seen government bond yields rise, although they remained near historically low levels,” the minutes said.

The RBA also noted the interest rate cuts delivered in 2011 and 2012 may be starting to have an impact.

“Interest rate sensitive parts of the economy had shown some signs of responding to these lower interest rates, which were well below their longer-run averages, and further effects could be expected over time,” the RBA said.

“Noting that monetary policy was already accommodative as a result of the substantial easing of policy over the past 15 months, and that this stimulus was continuing to work its way through the economy, the board judged that it was prudent to leave the cash rate unchanged at this meeting.”

Mobile Rentals director issued five-year ban

A Victorian-based household goods rental company has had its licence revoked by the Australian Securities and Investment Commission for not ensuring responsible lending practices, or providing key information to consumers.

Director of the company Mobile Rentals, Ajay Kaushik, has also been banned from engaging in credit activities for the next five years.

Between February and August 2011, ASIC found Mobile Rentals did not comply with responsible lending obligations including keeping adequate records and providing consumers with a credit guide.

Coke’s profit drops thanks to write-downs

Beverage giant Coca-Cola Amatil’s profits have fallen by over $130 million in the six months to December.

The company’s profits fell 22% from $591.8 million to $459.9 million.

But this figure incorporates CCA’s $98.5 million in write-downs from its SPC Ardmona business.

CCA managing director Terry Davis said in a statement the SPC Ardmona business has struggled to compete against supermarket labels and imports due to the high Australian dollar.

“Earnings growth was moderated by disappointing performances from New Zealand and SPC Ardmona, with the ongoing impact of the high Australian dollar on the competitiveness of SPC Ardmona leading to a writedown of assets and goodwill in the business,” he says.

Shares fall on open, but rebound

Australian shares opened lower this morning, but had recovered by midday to be holding steady with the S&P/ASX200 benchmark at 5064.8 at 11.40am, up 1.4 points.

Analysts said the early drop was because of investors remaining cautious in the lead up to Italy’s general election.

Wall Street was closed yesterday due to the Presidents’ Day public holiday.

 

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