THE NEWS WRAP: Commonwealth Bank set to report record annual profit
Sunday, August 11, 2013/
The Commonwealth Bank is expected to report a record full-year profit of $7.6 billion after once-off items, up from $7.1 billion a year earlier.
“The banks, especially CBA and Westpac, are trading at the top end of their valuation, with dividend yield being the only attraction currently, given deposit rates,” Tyndall fund manager Brad Potter told The Australian.
“The areas of interest in this bank reporting season will be around any positive surprise on CBA’s payout ratio and further positive news around cost-out strategies.”
UGL to spin off real estate services business
Infrastructure and services group UGL is expected to announce a $1.3 billion spin-off of its DTZ property services business, with the new company set to be listed on the Australian Securities Exchange.
The new business is set to become the world’s third largest global real estate services company with operations in 52 countries, competing against key rivals Jones Lang LaSalle and CBRE Group.
UGL chief executive Richard Leupen is expected to announce the demerger as the company delivers its annual profit later today.
General Motors scaling back South Korean operations amid growing labour costs
Holden’s US-based parent company, General Motors, is scaling back its presence in South Korea following growing concerns over rising wage costs and increasingly militant unionism.
The country became a major hub for the global auto giant in 2002 after its acquisition of Daewoo Motors, with the country accounting for 20% of the company’s annual production, with 80% of the cars made in the country exported.
“We need to make sure we mitigate risk in (South Korea), not over the next two to three years but over time, not to become too dependent on one product source,” an anonymous source told Reuters.
“If something goes wrong in Korea, whether it is cost, politics, or unions, it has an immediate impact.”
The Dow Jones Industrial Average is down 0.5% to 15425.5. The Aussie dollar is down to US91.78 cents.