WorleyParsons is the latest Australian company to face legal action from disgruntled shareholders over an earnings downgrade.
Less than a week after Slater & Gordon launched a class action against Newcrest Mining on behalf of shareholders, law firm ACA Lawyers announced this morning it has obtained funding to mount a class actions against WorleyParsons for “withholding sensitive market information” ahead of a 26% drop in its share price in November 2013.
According to ACA Lawyers, an earnings downgrade issued by WorleyParsons on 20 November 2013 led to $1.3 billion being wiped from the company’s market value, coming just six weeks after the company had informed shareholders it expected earnings would increase in the 2014 financial year.
ACA Lawyers said it expects to file a statement of claim on behalf of shareholders in the Federal Court before the end of the year.
Big Mac index says Aussie dollar value is spot on
A consistently high Australian dollar may be making life difficult for Australian exporters, but the value of the dollar is just about where it should be according to the Economist’s annual Big Mac index.
The index, which compares the price of a McDonald’s Big Mac in the US with the price of the hamburger in a range of other countries, is based on the premise of purchasing-power parity. That is, over time, exchanges rates will adjust so that the price of goods and services in one country is the same as in any other country.
Based on June prices, a Big Mac will set back an Australian US$4.81 at market exchange rates, while diners in the US would be charged US$4.80. Therefore, according to the index, the Aussie dollar is overvalued at just 0.4%.
It’s the third time the Australian dollar has come so close to the ‘correct’ level on the index, which was first compiled in 1986. The other two times were in 2013 and 2009.
Shares down on open
Aussie shares have opened slightly lower this morning, as investors turn their focus to the local profit reporting season.
The S&P/ASX200 benchmark was down 0.5 points to 5583 points at 12.22pm AEST. Last week, the Dow Jones closed 123.23 lower, down 0.72% to 16960.6 points.