Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Telecommunications giant Telstra Corporation and NBN Co, the Government body tasked with building the national broadband network, are in "the final stages of negotiation" over the A$11 billion deal under which Telstra will hand over control of its fixed-line monopoly. Telstra chief executive David Thodey and NBN Co chief executive Mike Quigley have held increasingly in-depth talks with their respective legal teams recently and there are hopes for a definitive announcement before the end of May. Page 15.
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Goodman Fielder shares plunged last week when chairman Max Ould was forced to downgrade the 2010-11 profit guidance for the country's largest listed food processing group by 20 percent. Mr Ould also defended the delay in appointing a new chief executive following the resignation in January of Peter Margin, who finished at the company last Friday. "We are not getting executives lining up," said Mr Ould, noting a shortage of suitable candidates locally and offshore. Page 15.
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Elders has had a difficult year, with its share price down 40 percent since it announced a loss last June rather than an expected A$55.7 million profit. The rural services company has since cut A$45 million in costs and implemented a sales program across its 300 branches. With conditions across the agricultural sector improving, many expect Elders will benefit by default. Managing director Malcolm Jackman has forecast the group will show underlying profit before tax of around A$2.2 million. Page 16.
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Oversupply may be the underlying problem for the discount department store sector which has shown little or no sales growth in the past two years. With Wesfarmers' Kmart and Target, Woolworths' Big W, Momentum Corporate's Harris Scarfe and Best & Less, Australia has over 880 discount department chain stores, which is one for every 25,000 Australians. Retail industry fellow at Deakin University, Steve Ogden-Barnes, said, "I don't think we need that much in a country of 22 million." Page 18.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Chairman of Rio Tinto , Jan du Plessis, has said the world's third-biggest miner will maintain a strong balance sheet to insulate it against potential volatility in commodities prices. Mr du Plessis said that he expects demand for copper and iron ore from China and India to remain strong, but there was a danger that recent record prices were being artificially propped up by the United States Federal Reserve's policy of quantitative easing and the price could fall when that expires after June. Page 23.
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The head of Origin Energy , Grant King, said yesterday that the A$3.25 billion purchase of New South Wales power assets and a A$90 billion gas export deal with China are merely the latest, albeit the biggest, steps in a strategy which the company has pursued since it was spun out of Boral in 2000. Mr King said the company would continue to use its strong position in energy retailing as a "channel to market for fuels." He noted that Origin had benefitted from a string of privatisations in the energy sector. Page 23.
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While economists are tipping that the Reserve Bank of Australia will maintain interest rates at 4.75 percent tomorrow when it meets, it is likely the central bank will seek to pave the way for an increase in rates in the coming months. HSBC Australia and New Zealand chief economist Paul Bloxham said yesterday that the surprisingly high consumer price index figures released last week were likely to strengthen the case for a future rate rise. Page 24.
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Businesses remain cautious about increasing sales and profits over the coming year, according to a survey released yesterday by PricewaterhouseCoopers. 850 companies with revenue between A$10 million and A$100 million were surveyed and only 36 percent indicated that they were planning significant investments this year. Profits had fallen in the past year for 31 percent of the businesses surveyed and 25 percent reported a drop in sales. Economic conditions and low consumer confidence were cited as reasons for disappointing revenue outcomes. Page 25.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Australia's major banks have resolved the funding gap over the cost of credit used to finance home loans, meaning that "out-of-cycle" increases in mortgage rates will not be required. Research by Macquarie Equities has found that the price difference between interest rates charged to home loan borrowers and new debt has levelled out. The banks sparked controversy last year by raising standard variable mortgage rates beyond the Reserve Bank of Australia's cash rate, using the higher cost of new debt as justification. Page B1.
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An expert witness, Professor Daniel Rubinfield of the University of California Berkeley, told The Federal Court that 4618 customers had been overcharged by A$475 million under the price-fixing cartel operated by packaging companies Amcor and Visy Industries. However, only 936 members of the class action against the companies have registered their claim to share in the A$95 million settlement agreed to in March. Remaining plaintiffs have been given until Wednesday to register their intention to claim with law firm Maurice Blackburn. Page B1.
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Despite providing free updates on road conditions to radio and television broadcasters, the Australian Traffic Network made A$11.4 million profit in 2009-10 by selling customised 10-second advertising grabs on the back of its reports to companies including Target, Woolworths and Telstra. The Australian operation provides 60 percent of the revenue for the Nasdaq-listed parent company Global Traffic Network . Page B1.
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The weak economic outlook and ongoing disputes over the United States budget continue to weigh on the US dollar, meaning that the Australian dollar looks set to break through US$1.10 today. With economists expecting notes from tomorrow's meeting of the Reserve Bank of Australia to foreshadow an interest rate rise in the coming months, investors looking for Australian assets will continue to push the dollar higher. Page B3.
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THE AGE (www.theage.com.au)
When Alan Joyce was appointed chief executive of Qantas Airways in 2008 the carrier was the only airline in the world operating a successfully differentiated premium brand and budget service in Jetstar. However, attempts to restore profitability to the company's international operations have damaged the premium brand's reputation. There is a perception among travellers that standards of service, employee morale and equipment have declined, making Qantas less distinct from its cheaper stable-mate. Page B1.
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The Australian Prudential Regulation Authority's executive general manager, Wayne Byres, says that Australia's banks will not face potentially onerous costs in order to comply with the new global rules for the banking sector, known as Basel 3. Mr Byers said that as Australia's banks already had standards which were "not too far" from the incoming regulations they would not need to undertake capital raising or squeeze dividends in order to comply. Page B3.
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Australia's four major banks, Commonwealth Bank of Australia , National Australia Bank , Westpac Banking Corporation and Australia and New Zealand Banking Group are set to report record first-half profits totalling A$11.7 billion. With business lending looking likely to gain momentum and bad debts having fallen, the rebound in profits is a confident sign that the financial crisis is finally ebbing away. The Commonwealth Bank reported a A$3.3 billion first-half profit in February and the other three banks will all report this week. Page B3.
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