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Lateline Business -

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(generated from captions) is a new era. "Before,

Ashkehlon was a reportable,

I feel like quiet town. Nothing feels safe.

I feel like I'm in a

war". 120,000 people live in

Ashkelon, 10 kilometres north

of Gaza. A new weapon is on the

scene and Ashkelon is in

range. This is a ground rocket,

much bigger and graited greater

and can cause more damage and

killings. We're talking about a

different level all

together. The rockets usually

fired from Gaza are hand made

by the militant and only reach

the smaller towns by the

border. But these missiles are

standard military issue. They

have a longer range and a more

lethal warhead. This is

something that we can't

continue to carry on and live

every day life if these types

of rockets are pounding down on

Ashkelon. Ashkelon's warning siren has been redesigned to

warn of missiles as well. In

the bunker below is a new

command sener. Here Dr Alan

Marcus maps each strike. 15

highly explosive rockets

hitting the city in three or

four days obviously has a huge

effect. It's already been a

national symbol, it's a key

test how far the Government's

prepared to go to protect its

citizens. Israel can strike the

militants wherever it finds

them. However since the

blood-letting of last week, the

missile fire has dwindled to

almost nothing. Israeli forces

have also held back. Egypt says

it's been talking to both sides

about how to maintain the

calm. But that's something

Israel denies. There are no

negotiations, no direct, nor

indirect, nor any agreement

between Israel and the

Hamas. The longer range

missiles in Gaza have not only

brought a new Israeli city into

range, they may have changed

the way the war is waged. The

militants are usually forced to

get as close as they can to

their targets, that means

firing rockets from the towns

and fields near the border. The

new longer range missiles mean

they could fall back and fire

repeatedly from the centre of

Gaza City. It's not clear how

the Israeli miltary would

respond or what the human costs

will be.

TRANSLATION: Whoever thinks we

have finished the story in Gaza

and there's already calm, I

want to correct them. We

haven't finished anything. The

important tests are still

before us. In

before us. In Ashkelon they're

waiting to see what comes next.

But in the region the optimists

are rarely rewarded. A quick

look at the weather.

That's all from us. 'Lateline

Business' is coming up in just

look back a moment but if you'd like to

look back at tonight's

interview or view any stories

or trichts you can look back

visit our website. But now

here's 'Lateline Business'.

B tonight the chemistry St

Right. Incitec Pivot makes a

$3.3 million bid for explosives

maker Dyno Nobel. I'm confident

in time the Margaret is going

to understand and agree with us

that this is a good price and a

very good deal that is creating

shareholder value. London

calling, UK base ed sees value

in Challenger. These are quite

salied assets and as I say I

think it's an opportune isic

bid to take advantage of that

discount. Regaining critical

of mass, research proves the worth

of three or more women in the

board room. Women think

differently, they work very

much in teams with

collaboration and consensus.

And by having them in board

room and having that come from

the top down of course it makes

more money.

First to the markets and

Australian shares notched up

their ninth consecutive session

of losses with resource of losses with resource stocks

leading the decline the All

Ords sluched to an 18-month

low. The eax's index closed

nearly 1% weaker. In Japan

bargain hunt ore put an end to

a 3-day losing streak on the

Nikkei. The hang sang added

more than 1% and in London the

FTSE bounced back. The local

banking sector was buzzing with

takeover talk today and

Challenge esh has confirmed

it's been approached for part

of its business. Challenger

says the offer is subject to a

number of conditions an

analysts suggest the group

would be unlikely to sell one

of its better fee

earners. Australian banking

stocks have born the brunt of

this year's market slump losing this year's market slump losing

more than a third in val frurks

their 2007 peak. That's made

the sector right for takeover

Financial Services is the first bids and now Challenger

to confirm an approach. The

UK-based Arkmile Limited has

made an unbinding, unsoliciting

in principle offer to buy all

the securities in Challenger

intra fracture fund valuing the

billion. Clearly it entity at over $1

billion. Clearly it would seem

to be a bit of an opportunistic

bid given the fact that the

market's been pretty downcast

for the last couple of months.

The share price, the Challenger

Infrastructure Fund dropped

sharply. This price is no where

near where the high price of the fund has been in recent

times. It smacks of an

opportunistic bid so we'll have

to see what happens. The

infrastructure fund owns water,

gas and shipping facilities gas and shipping facilities in

the UK and France. Last month

Challenger estimated the fund's

net asset value at $4.05 per

security well above today's

offer of $3.50 a share. Given

we're in a fairly distressed

market, it is certainly

suggested that $3.50 relative

to the NAV of 405, says these

are solid assets an as I say, I

think it's an opportunistic bid

to take advantage of that

diskoumpbt. Patterson's Mark

Popie argues that local

infrastructure funds are

trading at a heavy discount to

neted tanctionible asset an

fair it's difficult to determine

fair value the current market conditions. The other question

is from Challenger's point of

view are they willing to let

asset gos on which they're

deriving management fees. So

issue there's another more important

issue for Challenger. There

have been steadly build ing

this specialist asset

management area. They don't

want to lose a prized asset

that they've built up over the

last couple of years in

distressed

circumstances. Arkmile's parent

company already owns 19% of

Challenger Infrastructure Pfundt. Analyst expect they

funning in would have access to cheaper

funning in the UK and could

have sophisticated knodge of

Challenger's biz. Obviously the

information they've perhaps

been getting has been in depth

so they have a pretty goods understanding aened of course

some of those assets are in the

UK so they've got an

understanding of what's

happening in the UK

particularly on the regulatory

side and the water side so yes,

I think they'd probably have a

better understanding, certainly

than local investors in terms

of how to value

of how to value this

vehicle. Local investors were

sent on a wild goose chase this

morning when an incorrect news

report said Challenger

Financial Services was the

subject of a takeover bid at

$3.50 a share. That sent

Challenger's shares soaring by

more than 20% in early trade

before investors realised the

mistake. It took several

minutes for Challenger Infra

structure Fund shares to climb

closing 23% higher at $2.95.

That suggests investors are

sceptical about the bid's

chances of sketss. But

Challenger hasn't ruled out the

approach completely appointing

a financial adviser to consider

the offer's merits. ASIC is

stepping up its probe into

heavily sold stocks which may

have been the victim of market

manipulation or insider

trading. The corporate watchdog

has asked some of the country's

leading broking firms whether

they were involved in prid trrk

trading or in spreading false

or misleading rumours. The

corporate watchdog is believed

to be investigating trading in

ABC lempbing City Pacific,

primary health care, Allco

Finance and Babcock and Brown. And for a look at the

rest of the day on the markets

I spoke earlier to Marcus

Padley. So a weak lead from Wall Street has Wall Street has pushed the

Australian mark down for a

third straight day? Yes, down

46. Wall Street in fact fell

below the level it was in the

year 2000, January 2000,

interestingly enough. So

effectively Wall Street 's gone

no where in seven years an

today we fell below the levels

of Black Tuesday which

everybody thought would provide

some sort of technical support

but straight through there

without worrying about it. The

46-point fall we had was

despite the banks having a huge

turn around today. Most of them

were down 2% or 3% and they

ended up anywhere from 4.5% to

2.5% up and they accounted for

about 25 points on the index

today. So the market would have

been a lot worse off without

them. So what's driving the

rest of the market down? Well

resources really. There has

been what looks like a switch

out of resources into financials today. Financials

have hit all sorts of lows.

You've got the bank sector now

on a P esmted under 10 and a

yield over 10% including

franking and we haven't seen

that in a long, long time. Of

course that's if consensus

earnings are right and at the

same time we've seen the

resources sector down about

6.5% in just five days. It does

seem everybody l everybody is

just moving from one sector

into the other. Maybe it's

really a move out of resources

and financials just looks like

the best place to slot the

money in. The resources sector

has so far remained resillant

in the bear market. If

resources stocks fall can

anything hold the market up? You really have to worry

about it, don't you? The

resources theme has suddenly

weakened and it's coming out of

the currency markets. If you notice

notice the Aussie dollar and

the Canadian dollar have

started going down and those

are viewed as commodity

currencies and yet the euro has

kept going up against the US

dollar. So the US dollar is

still weak but the Aussie

dollar, Canadian dollar even

weaker and that is suggesting

to you that people think that

the recession in the US is

going to impact China. We also

had some Chinese inflation

numbers today which were a bit

scary, highest in 11 scary, highest in 11 years and

that's led to talks of interest

rate rises. So for the whole

China story going oblong then

resources will go down. We've

seen resources at their lowest

in the US for some time. They

had two terrible nieckts the

last two nights. The worst

performing sector two days on

the trot. We've also seen

broker downgrades in the US on

the likes of Alcoa and Freeport

overnight an we saw one broker

here saying people are paying

high prices for faultering

earning in the sector. It looks

like the sector that is the

foundation to the market has

become the Achilles he'll. How

far could it fall? Well this

there you go, we're in the

hands of the momentum now and

about the best guide you can

possibly get hold of is

technical analysis and you know

those guys, if they're going downstream they're going to

fall over a water fall and fall

into an abyss an those are the

sort of technical predictions

alternate moment that we're

going to go back to 2003

levels. But we really can't be

forecasting a 40% fall in the

market from here but that's the

sort of recognition of the fact

that we're now in blue sky on the downside or black sky

whatever you want to call it.

So yes, who knows.

Unfortunately the yields and

PEs on the resources sector are

nothing like the banks so you

can't really, if you have a

worry about China you can't

really see fundamental sport

until some significantly lower

prices. Thank you. To the other

major movers on our market

today.

With the US dollar in free

fall investors are turning to

safe havens like oil and gold.

But while these commodities act

as a hedge against inflation

for vefors, the rising cost of

oil is fueling consumer inflation an exacerbating

global economic problems. The

demand for crude oil keeps

rising as does its price. On

the New York mercantile

exchange light sweet crude

surged above US $is 08 a

barrel. Everyone has black gold

fever right now and continuing

to push this market higher. The

rise of black gold is being

fueled by the weaker US

currency. Investors are off-loading the greenback as

its value falls. What you saw

in the rally in crude had to do

with the dollar. You're also

seeing this flight out of

equity markets an credit

spreads have widen apd property

prices are under a lot of

pressure in the US so in many

ways commodities in general and

probably oil, oil in particular

is seen as a safe haven at the

moment. The price of oil has

increased 80% over the past

year. The US vice president

Dick Cheney will visit key oil producers Saudi Arabia next

week to ask them to pump more

oil into the market. My feeling

is that it's unlikely saub

raidia will change their

production having agreed to

leave it unchanged at last

week's OPEC meeting. And

increasing crude oil prices are

also signaling the prospect of

even higher petrol prices.

Theats expected to stoke

inflation which analysts say

the Australian economy cannot

afford. Continuing rise in the

oil price will act as a

constraint on economic growth

adding to the slow down of the

economy that I think has

already starting to become

evident. The latest economic

numbers bear this out. The

total number of advertisements

in jobs has fallen for the

first time in nearly 1.5 years

according to the ANZ Bank. And

National Australia Bank says

slightly in February but business confidence rose

remains at low levels and is

likely to fall further. After

months of speculation fertiliser company Incitec

Pivot has made a friendly $3.3

billion bid for explosive

makers Dyno Nobel. The combined

knrup will have a market

capitalisation of $9 billion

and be a leading player in

fertilisers an explosives at a

time when demand for both

products is booming. The offer

is 25% above Dyno Nobel's

average traded share price of

the last month hand as been

welcome ed by its board tu

market has dhadgeed Incitec

Pivot. I spoke to the Julianne

Seagl today. The market has

wiped nearly 12% af your share

price and analysts are saying

you paid too much for Dyno

Nobel, any concerns you may

have overpaid? I was as excited

now as I was this morning when

we made this announcement. I think the price that we are

paying in our offer is a fair

price and I think the value

that we can create by combining

these two businesses together

is justifying this proposal. I

think that it will take the

market some time to settle, to

absorb the information that we

are providing to the market and

I'm confident that in time the

market is going to understand

and agree with us that this is

a good price and a very good

deal that is creating

shareholder value for both the

Incitec Pivot shareholders and

the Dyno Nobel holders. It's an

unfriendly environment to be

launching a takeover deal, how

did the state of the credit

market influence the structure

of this deal? It's very

interesting and a good

question. I think what we found

out in preparing for this

possible transaction is that

there is still a willingness to

support good companies such as

Incitec Pivot. So yes, clearly

there is some squeeze in the

credit market, however we found

that our bankers were willing

very much to support us in this

enterprize. How important was

the recent run up in your share

price in making this deal

possible? I think what's really

important making this deal

possible is the value that is

going to be created and that's

really underpinned by two

things really and that's the

fate of the two businesses and

the flexibility that it's

creating. In terms of fate,

what I mean is both businesses

have at their core nitrogen

chemistry. The building block

is ammonia, both in the case of

fertilisers and in the case of

explosives. So in putting the

two businesses together, we're

taking advantage of the

synergies that are going to be

created in a much bigger

manufacturing entity. As far as

flexibility is concerned,

putting the two businesses

together is creating the

opportunity to optimise

production either into

fertilisers or into explosive

depending on the market

conditions so that we can

optimise the value that we are

shareholders. At the moment creating for our

market conditions would suggest

you've got no spare capacity in

either fertilisers or

explosives. Are you expect

asdownturn in either of those

markets? No, not at all I think

we are looking at the

possibilities in the future in

progressing projects on the

fertiliser side and on the

explosive side in Australia and

overseas. So when you put this

picture together, I think the

opportunities are clearly

there. We, for example, operate

two ammonia plants in

Queensland, Dyno Nobel is

operate ing the - the murm ba

project is going ahead and you

add to that all the ammonia

manufacturing plants in North

America. Yes, you talk about

the deal giving you extra exposure to the US market s that necessarily a good thing

at the moment? If you actually

look at the performance of Dyno

Nobel in the North American

market you would have to say

it's a great performance, the

business is very solid,

delivering very strong results.

Indeed, part of the business is

exposed to the construction

market in North America but

then again the one that has

been affected by the subprime

crisis is the residential

construction market. The

infrastructure construction

market hasn't really been affected and of course the

energy market which is a

significant part of Dynoa's

business in North market has

not been affected it's very

strong for good reasons. You've

got a $2.4 billion loan

facility you've only used part

of that in this deal r you

looking at any other acquisitions? Clearly one of

the opportunities that we're

going to have as a combined

entity bigger company, bigger

market gap is the ability to

fund bigger projects into the

future and indeed, we do have a

pipeline of growth projects

that we have been working on as

certainly some of those

projects will be realised and

indeed by putting the two

companies together we will have

additional opportunities to

create value by engaging in new

projects in the near future and

further on. Now you talk today

in quite optimistic turms about

the Murinba plant. The Dyno

Nobel team took a hit on that

and shelved it. Are you looking

at developing that site We've

got an open mind about it and

one of the first thing that I

will be doing is appoint a

number of people to the project

team and work together with

Dyno team on understanding the

possibilities and the

potentials of this project. So

clearly from my point of view

I'm open minded about it and

will be putting the necessary

afoit to understand the real

potential of this

project. Given the Dyno team

shelved it does that mean you

have some concern about the

judgment of the management team there? That's what we're going

to find out over the next few

weeks an month. Dyno Nobel has

not done as well out of a

booming market as you think you

can do in your company. What

deefficients do you see in the

way the company's been run? I

think it's a great business and

once you clear the smoke, the

smoke from Murimba,, you see

the business is a sound

business, particularly the

North American business issel

run and that's one of the

reasons to actually believe in

the significant value that we

can create together because

what we are really putting

together is two good

businesses. You clear the smoke

around Murimba and you've got

two businesses with a capacity

to create more value together

than each of them alone. Let ne

ask you a general question now about the industry. The Federal

Government has asked the ACCC

to look into the rise of the

price of fertilisers in the

last two years. One of the

concerns is that only a few

producers control the world

market. The National Party says there's hording at the

wholesale level. Have you seen

any evidence of that? I really

welcome this inquiry because it

will give us the opportunity to

really explain the forces at

play that are actually pushing

the demand for fertilisers and

indeed pricings. So are you

saying it's demand that's

driving the prices up from $400

to $1,000 oo tonne in two years

or there's cost pressures on

you. My belief is globally this

time the price of fertiliser is

very much driven by demand but

of course you do have in fact similar picture on the supply side which is pushing the

prices in the same

direction. Thanks very much for

joining us. Thank you very

much.

Shareholders in Australian

companies are losing money

because there are too few women

in the board room. Research by

New York based Catalyst Group

has found there is a clear link

between the financial perform

yabsance of a company and the

number of female directors on

its board. Only 9% of

Australia's top 200 companies

have the number of women

required to make a difference

to their bottom line. Women

make up half the population but

around the board tables of

Australia's biggest companies

they're vastly underrepresented

and shareholders are paying the

price. It's very important for

a board to have independent

people who represent a

diversity of stakeholders and a

range of backgrounds

perfectives and

experience. Eileen Lang is the

head of the American research

house Catalyst which

specialises in issues around

women in business. Cat lis

analyse the performance of the

United States top 500 companies

comparing those with the

outcome of those with the

highest number of fe Neale

directors to the lowest. It

inconcluded companies with most

women in the board rim had a

return of equity 53% above

those with the fewist. Return

op sales was 42% higher with

return on invested capital

ahead by 66%. Companies that

have a lot of women on their

boards have really paid

attention to this and it's hard

work, it doesn't come

naturally. They have to work at

it over time. And so it shows

that they value diversity, they

value women and they do a good

job of managing that kind of di

verse ity so. If they're good

at managing diversity, they're

good at managing people,

they're good at valuing everything. As head of

corporate leadership consul

tancy Zaffyre International,

Margot Cairnes advises

Australian companies on the

structure of their boards. They

have no doubt the Catalyst

research is right and

translates to the Australian

experience. Women think

differently, they work very

much in teams with clap ration

and consensus and by actually

having them in the board room

and having that come from the

top down, of course it makes

more money. Leading company

directors such as Woolworths

and Just Jeans board member

Allison Watkins also support

the Catalyst findings but

Allison Watkins cautions it's

not about women for women's

sake. Women have to bring the

requisite skills an experience

but if in addition to that they

can bring different approaches

to communication, to problem solvesing, to leadership to

thinking about customers then

that can only add val tourks a

board discussion. According to

the latest statistics women

hold only 9% of the board seats

at ASX 200 companies compared

to 15% in the United States,

12% in Canada and South Africa

and 11% in Britain. Only 27 ASX

200 companies have two or more

female directors with only two

QBE Insurance and just Group

having three and according to

Catalyst three is the minimum

number for the female influence

to have an impact. I tend to

agree with thand I've seen that

at different levels of a

company as well. I think you do

need a critical mass for a

voice to be heard. And I think

a higher number again probably

is more reflective of the

culture of the company, the

culture of company where they

don't really mind being

different. As a director of QBE Insurance Irene Lee is aware

that one of the biggest

barriers to women rising to the

top and getting into the board

room is the age old choice of

family versus career. Women

have gone off and on their

career whether for men lit be a

more linear aprosmt women have

to make decisions right through

their career. Which for Allison Watkins meens companies will

have to think outside the

square if the number of women

at Australian board tables is

to increase. We really need

boards and chairman in

particular to take risks if

they're going to accelerate the

pace of change. Take calculated

risks and take women on to

boards who they're confident

that they can grow and

develop. Because of the small

size of the Australian

corporate sector, and the small

number of women on Australian

company boards, it's hard to

make an accurate assessment of

the impact of female directors

on the bottom line here the way

that Catalyst has for the

United States. The pace setter

on women in the boardroom in Australia is Prime Minister

Kevin Rudd who's appointed an

unprecedented four women to his

first cabinet, something

Catalyst boss Ilene Lang is

certain will lead to better

Government. I think there will

be excellent performance,

there's more representation,

there are more women fwh

Australia who can look up and

see themselves there. They're

more included in the government

and I think that that can only

benefit the country. But the

recently announced decision to

have only one woman leader at

the Australia 2020 summit has

shown that like the private

sector, the Government still

has more work to do in this air

y. And now a look at tomorrow's

business diary. Lending finance

figures for January will be

released. The global iron ore

and steel forecast conference

will open in Perth with

Fortescue Metals Andrew Forrest

one of the speakers. Going

overseas, the latest US

business invegry figures will

be out as will retail sales

data. What's making news in the business sections of tomorrow's

papers. The Australian leads on

the corporate watchdog's

investigation into into at

least 10 broking houses. The

The 'Australian Financial age rr covers the same story.

Review' says the Government's

business advisers are trying to

limit changes to workplace

agreements. And the 'Sydney

Morning Herald' examines

Incitec's bid for Dyno Nobel. That's all for tonight.

The Dow futures is up 54

points. In London the FTSE is

up 49. If you want to review any part of tonight's program

you can visit our website. You

can watch if program online or

download it as a vodcast. We'd

also love to get your feedback.

good. Closed Captions by CSI I'm Eleanor Hall,

THEME MUSIC I'm sorry, mate. Mate, no-one's allowed in. No, you're not. You're not sorry better. otherwise you would organise it a crowd of close to 1,000 - One night in December,

and retirees - farmers, businesspeople, housewives on the Camden Civic Centre, converged of Sydney. on the southwestern outskirts It was packed to overflowing away. and there was no turning them In you go. It's bullshit, OK? We don't mind standing. (People yell)

the huge turnout The issue that prompted school catering for 1,200 students. was a planning application for a new but a school for Muslims. Not just any school weren't having a bar of it. And these residents They don't want us all involved. Council's gutless. Sure we are racist not accepting a community if you call it racist that also happens to bear -

amongst them. they've got terrorists They have. OK? We can't say they haven't. they want to be here If we let 'em in here in their country little farmhouses. because they can go and hide move in the streets of Camden Between 3 and 4 you won't be able to it's going to cause. for all the traffic That's my objection to it. a quiet community. It's a quiet place, and planning issues Legitimate concerns over traffic

like these. were drowned out by voices Dirty, filthy fucking grubs. Filthy grubs. Dirty fucking... We don't want you here. Fuck off, wogs. Go back to your own country, Mohammed. We pay our tax, mate and... bombings and the war on terror, Since September 11, the Bali

have become commonplace. views like this We don't want 'em. They shouldn't be here. were born here. 40% of Australian Muslims

But the message from this crowd doesn't include being Muslim. is that being Australian they're all filthy grubs, No-one wants 'em here, they can all fuck off. You're born in Australia?

Yeah. Raised in Australia? Nah. Ever been to Lebanon? you've never been to Lebanon, Never. So even though Lebanon, even though you've never seen you're still being called Lebanese. And you're born and raised in Australia? That's sad, isn't it? Yeah. These schoolboys are all Australian-born.

But when they refer to 'Aussies', they don't mean themselves. You know, Anglos, blue eyes, blonde hair, and we're seen as, you know, wogs, if you like. It's like you're from a different country, like, um, you don't feel like you belong here, they don't make you feel like you belong here. There's mounting evidence that many young Muslims feel like foreigners in their own country. And some of their leaders are beginning to ring warning bells. You're going to have a community that is so disattached from the wider community, a community that does not have a sense of belonging whatsoever. You're gonna see a generation of young people who have so much hatred and so much anger

and so much frustration within them and when that happens you are basically on dangerous grounds.

Australian Muslims recently celebrated the festival of Eid ul-Adha,