Economy

Home sales weak in August: Midday roundup

Engel Schmidl /

New home sales in Australia have fallen back into weak territory, reversing much of the strength gained at the end of the 2011/2012 financial year, according to a monthly study.

Housing Industry Association figures recorded new home sales fell 5.6% in July, after three consecutive months of rises, including an increase of 2.8% in June.

The detached housing sector fell 5.5% in July, after a rise of 0.7% in June.

HIA chief economist Harley Dale said Australia’s housing sector continued to suffer despite rate cuts from the Reserve Bank of Australia.

“Now is a good time to build a home – interest rates are lower, it’s a very competitive market, and there is less pressure on skilled labour availability,” he said.

Virgin posts a $23 million profit

Virgin Australia posted a $23 million full-year profit and unveiled plans to expand capacity in the domestic market by as much as 9% over the coming months.

The positive result from Virgin was in stark contrast to Qantas, which announced a $244 million full-year loss a few days ago.

Virgin said a key factor in its return to profitability from a $68 million loss previously had been its ability to snare more corporate and business flyers.

Virgin’s revenue rose 20% to $3.9 billion and it announced that it will target productivity gains of $400 million over the next three years.

Former Vanguard portfolio manager charged with 63 counts of misusing his position

A former Vanguard Investments portfolio manager was before the Magistrates’ Court of Victoria today accused of more than 60 charges of making improper use of his position as an employee of the index fund manager, allegedly benefiting to the tune of $600,000.

Mark Hildebrandt was employed by Vanguard, which acts as responsible entity for a number of registered schemes, to manage a number of these schemes focused on international equities.

ASIC alleges on 63 occasions between 18 May 2010 and 6 December 2010, Mr Hildebrandt placed orders for Canadian S&P/TSX 60 Index Standard Futures contracts on the Bourse de Montréal on behalf of Vanguard, while also placing substantially matching orders for the same financial product on his personal trading account.

Australian stocks edge up

The Australian stock market opened slightly higher after Wall Street finished mixed and European markets gained despite a key German business sentiment indicator falling to its lowest level since March 2010.

At the market opening the benchmark S&P/ASX 200 index edged up 0.27% to 4355.60, while the broader All Ordinaries index grew 0.27% to 4384.50.

Ric Spooner, chief market analyst of CMC Markets, said recent market price action indicates that investors are reluctant to buy shares at higher prices until they have the opportunity to get more certainty on the viability of the European stability fund and plans to contain Spain’s bond yields.

“The size and nature of the next Fed monetary initiative will also have a bearing on equity and commodity markets.”

 

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