Australian Retailers Face Worst Holiday Season in Two Decades

Chandrasekhar Atreya
20 Dec, 2010
New York City

Stocks in Australia fell as the markets in the region declined after South Korea conducted live military exercises. Australian retailers face the bleakest holiday season as consumers seek deals overseas online. Australia released the much awaited broadband report. Crane Group, the building products company, rejects the hostile offer of Fletcher Building.

[R]6:00 PM Sydney, Australia – Stocks in Australia fell as the markets in the region declined after South Korea conducted live military exercises. Australian retailers face the bleakest holiday season as consumers seek deals overseas online. Australia released the much awaited broadband report. Crane Group, the building products company, rejects the hostile offer of Fletcher Building.[/R]

Australian stock market traded lower pulled down by sagging bank stocks outweighing the gains the energy sector.

The ASX 200 Index in Sydney dropped 0.56% or 26.50 to close at 4,736.60 and the Australian dollar ended the day down at 98.78 U.S. cents.

The federal government released today the entire 400-page document covering its business plan for national broadband network, after keeping it well under wraps since early November despite repeated calls to release it.

The government earlier released a 36-page summary of the A$36 billion plan to appease the critics. Senator Conroy unveiled the full summary at midday press conference in Canberra today.

The business case released today reveals that the national broadband network will become financially viable and will return some income on the government’s investment only by the year 2025-26.

The International Monetary Fund on Friday agreed to give a loan of 2.5 billion euros to Greece, to help the country to tide over its battle with high borrowing costs and a rumbling debt crisis.

With this disbursement, the total emergency loans by IMF to Greece reached 10.58 billion euros or roughly $14.17 billion.

Major retail stores in Australia are facing the quietest and slowest Christmas sale in 20 years as consumers take advantage of strong dollar and no sales tax on goods ordered online and shipped from international destinations.

The government announced an inquiry into the future of the retail sector to examine competition issues and also the A$1,000 duty-free GST threshold on overseas shopping.

Perpetual Ltd said today that its talks with U.S.-based private equity firm Kohlberg Kravis Roberts & Co have been discontinued after the two parties were unable to find agreement on the terms of the deal.

Crane Group, the building and industrial products company rejected the unsolicited takeover offer of $740 million by Fletcher Building after saying it was “inadequate and also undervalued the company.”

The federal government proposes to introduce laws that will give shareholders power to vote out the company’s directors if the remuneration report receives a 25% no vote or more at two consecutive annual general meetings.

“Shareholders take on the risk of investing capital and share the company’s profits and losses. As the owners of the company, they deserve more say over the remuneration of the company’s executives,” David Bradbury, the parliamentary secretary to the treasurer said in a statement today.

Passenger traffic at Sydney Airport rose 4.7% in November from October, on more Chinese tourists, according to data collected by the airport’s majority owner MAp Group. Domestic traffic rose 4.9% and international traffic gained 4.3%.

Chinese inbound traffic to Sydney rose 32% and Australian outbound travel to China surged 39%.

Stock Movers

Among the banks Westpac Banking Corp led the decliners with a fall of 53 cents to A$22.66, while National Australia Bank declined 22 cents to A$23.93. ANZ fell 31 cents to A$23.98 and Macquarie Group dropped 29 cents to A$37.19.

Commonwealth Bank closed up 3 cents to A$50.73.

Mining shares had a mixed day with BHP Billiton dropping 21 cents to A$44.82. Rio Tinto was down 20 cents to A$84.45. Stirling Minerals gained 11.9% or 2.5 cents to close at A$.024.

Paladin Energy added 12 cents to A$5.03 after completing a deal to acquire Aurora Energy Resources Inc for C$260.87 million.

Santos, coming out of a trading halt, ended up 4.09% to A$13.50.

Perpetual Ltd dropped 14.78% to A$31.54 after saying its talks with Kohlberg Kravis Roberts & Co were unsuccessful.