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Good morning, welcome to

Business Today for Australia network, I'm Whitney Fitzsimmons. Coming up on the

program - lowered expectations

stop slides after comments a

planned summit won't resolve Europe's dent crisis. Slowdown a head -

a head - China's anticipated

growth to ease for a third straight quarter. And light, Telstra straight quarter. And green light, Telstra shareholders

expected to ratify the $11

Broadband Network. Those billion deal with National

stories coming up shortly but stories coming up

at first let's take a quick look

at the markets. We will have

more on what will happen in

trade in a moment. But

yesterday around the legion the

session was sow mostly higher.

For more on the market action

I'm joined by Tim Piper from

Bell direct. Will regional

and market also following the US

and Europe lower? US and Europe markets were significantly lower overnight and the Australian market is

expected to follow suit. Futures are spointing to Futures are spointing to losses

of 1.5%, again, it was the euro concerns which dominated the markets as we saw comments from

Germany come out concerning the optimism around the solution of

the euro situation saying the euro situation saying that

solution leaders are unlikely to reach a

solution by the weekend. This

sort of triggered investors to

move away from riskier assets

such as equity tancedz Aussie

dollar dropped over one US cent

overnight. Weakness in the

materials sector expected

today. BHP And Rio fell. The

market will by eyeing some key

data out of China, including GEP

GEP and industrial figures.

There will be more on those GDP

figure s in to follow in the

program. Jirts returned to market as global sentiment is waning at the moment. Let's

season playing move to Tus. How is the earning

season playing out over

there? It was a disappointing

night on the US earnings season

last night. IBM, their stock last night. IBM, their

price fell as much as 4% in trading. As sales grew

trading. As sales grew 7.8% but

they actually narrow ly missed ex-peg the

ex-peg the - expectation Fargo

fell over 8% as third quarter

revenue fell 6% from last year.

Citigroup also fe over 1.6% as

revenue fell heavily, not

taking into account an

accounting value-added figure trading volumes fell heavily.

trading volumes fell heavily.

We saw fixed income trading

revenue for 33% and equity

trading revenues falling over

70% for the group. So really US banks are struggling with high

interest rates - low interest

rate, high unemployment earnings include Apple, Bank of rate, high unemployment and

America and Goldman Sachs. Now, staying in US, there were some manufacturing data out there.

out of the What did that show? Cat data

out of the US did show that growing in the US. Factory, manufacturing is in fact still

utility and mining out put grow

0.2% in September. This was a

good result following zero

growth in August and

considering the 1.8% loss of

utility due to some weather

conditions in the US. On the flipside, manufacturing in New

York region is expected to be

month somewhat disappointed in the

month of October as shown by

the New York empire survey. New York manufacturing does York manufacturing does only

make up a small percentage of make up a small percentage

US manufacturing but this has

count as leading indicator nor

the upcoming ISM manufacturing survey in the US. Considering

the current economic conditions

going around in around the

world, 0.2% gain for the US

manufacturing was a solid result. And in investors still seem very result. And in Europe,

nervous about the debt there. Nervously did increase nervous about the debt cries

in the euro last night. We saw

equities fall heavily. Concerns

from Germany that markets from Germany that markets are getting too optimistic about upcoming euro situation are getting too optimistic about an

Pontinging comments from both

Angela Merkel's chief spokesman

saying markets were getting

over optimistic and the German's Finance Minister

saying it was un realistic to

region at the expect a solution for the

region at the upcoming EU leaders summit over the weekend. This follows relatively positive meeting in weekend. This follows a

pairs over the weekend where

Finance Ministers did endorse

parts of a plan to expand the

euro bail-out fund and try to

stem this Greek dent crisis. I stem this Greek dent crisis.

prompted a big drop in financial stocks in Greece, to

banks falling 10%. Others financials in Europe include ing Deutsche

ing Deutsche Bank falling over 3% and RRBS falling

3% and RRBS falling almost 4%.

So obviously markets are still

nervous in Europe. I only takes a few negative words from

leaders for the markets to react with a significant sell-off. Tim Piper sell-off. Tim Piper from Bell

Direct there. Now let's take a closer look at what's happening with currencies and

commodities.

As we hear those warnings from Germany

from Germany that the EU

leaders would not provide a

miracle cure for Europe's

problems stopping rising market

expej taegings - expect it's of an improvement in the dentd an

crisis. Wolfgang Schaeuble says European Government also adopt

a five-point plan to address the turmoil that's clouded the

outlook for the global economy.

Among the initiatives - re capitalising Banks an redwusing Greece's

Greece's debt by asking

creditor s to accept steeper write-downs on their holds than

the losses agree ed in July. Mr

Schaeuble cautioned the meeting

wouldn't produce a definitive solution. We will prevent the dent crisis from become ing a dent crisis hurting the dent crisis hurting the rest of

the world economy and in the

case of Greece a

case of Greece a further

restructuring of dent might be

to present necessary.. The EU is underUre

to present a solution to the debt crisis at the summit. debt crisis at the summit. But it faces resistance from Banks

of a plan s for larger write-downs on Greek Government debt and a forced

capitalisation of Banks. After

getting an indication of

China's inflation picture over

the past week, market the past week, market also examine the

examine the country's economic

growth as Beijing releases its

gmd data. Economist s are

tipping a continuation of the

low Slowdown that's been taking place

place since the start of the

year. With investors nervous

over the prospect of Europe

heading into recession and the

US economy stuck in first gear,

China's growth figures are more

closely crut size - scrutinised

than ever. Beijing spent the

last quarter

last quarter extending its

efforts to cool the economy and contain inflation. Economists

expect GDP growth for the expect GDP growth for the three months to September to register further

further mild slowing. Estimate

force the GDP figure to be

released shortly put growth for

the third quarter at around 9.3

or 9.2%. An easing from 9.5% in

the second quarter and down

from 9.7 in

from 9.7 in the first. Last

week, the State council

unveiled measures including tax

breaks and easier access to

bank loans to help small firms,

after the collapse of manufacture ers in the manufacture ers in the eastern

city of Weng Joe. Most exists believe a slowdown in the third

largest economy is inevitable

this year and there's further concerns government stimulus would make problems

would make problems with the

real estate bubble and wasteful investment worse, not

better. On the first better. On the first stop of

his three-day bus tour to

promote his economic plan in

North Carolina and Virginia,

Barack Obama has fire add

broadside at Republicans in congress for failing to pass

the plan. They have rejected his proposal but his proposal but President Obama is continuing to promote

his jobs package with the hope

he can push it through the

Senate when it starts taking

vote s soon. His goal is tout

pressure on the congress who want to shelf the want to shelf the plavenlt This

week I'm asking members of Congress to vote - what Congress to vote - what we're going to, do we're going to

break up my jobs bill. break up my jobs bill. Maybe they couldn't understand they couldn't understand the whole thing at once. We have going to break it up into bite-sized pieces. White House spokesman Jay Carney says the

proposal will aid states to hire, teacher, police hire, teacher, police and

Fathersers. But the state aid

package faces long odds on Capitol Hill. Long suffering

Telstra should er shareholders

face & another momentous day as

they vote to dismantle their

company, it's highly

anticipated they will approve

their company's $11 billion deal with the Federal Government to hand its fixed

line business to the National

Broadband Network. Head of

equities at Per peltual, Matt

Williams one of Telstra's biggest shareholder, is well and truly on board. I've been

watching the company for a long

time, this is the clear est blew sky ahead of the company

they've seen for a long time. Although analysts like

Mark McDonnell see only grey

clouds because the ACCC is use

to get the arrangement its

blessing. I have read every

submission to the ACCC submission to the ACCC and,

without exception, they are all negative. They are all hostile

to an ACCC approval of the

Telstra undertaking. But both big and small shareholder representatives will be re assured by the right assurances

from Telstra management. One

is that, if the ACCC insist on any modification s

agreement, that cost in excess

of, say, one to 200 million that Telstra will come back to

shareholders and reseek approval. But it It's

approval. But it It's so political conten #14us that far

from providing the certainty

that people are seeking, it's

only going to be certain to the

next election. Although others are looking beyond the politics

and beyond a future and beyond a future where margins are under more pressure. We still think

Telstra is coming off a $20

billion transformation project

instigated by the previous management. This means management. This means that

CapEx will run down and there's

scope to pay the ever important 28 cent dividends. The

shoeldser anger might not come

from the NBN proposal but from the vote on directors pay

packets with new accountability

ruling in place where ruling in place where a significant shareholder revolt

against pay two years in a row

could see a board spill.

Telstra maintains executive pay and shareholder interests are

aligned. And it pays for performance. That is a

nonsense. Over the last nonsense. Over the last five

years, the CEO and the top five executives have been

executives have been paid $180

million, the share price has

tanked 35%. The diffend s don't

even even make up for that even even make up for that loss site. It's win for the

executives, $18 o million and

it's negative for shareholders, it's Alice in Wonderland

stuff. Could the Mad Hatter's

tea party be a blue print for

the taels board meeting? Global

miner Rio Tinto plans to

realign its business in an effort to increase its profitability. I wants to concentrate on long-life, large

scale top tier assets so it will sell refinery s will sell refinery s in in Australia and overseas. Rio

says this was only one of the reasons for the reasons for the sell-off. The

world's second largest miner is

selling off a quarter of its

aluminium assets. The aluminium

business of Rio is the poorest

performance asset of the group.

So some form of restructuring

was necessary. Rio expanded its aluminium

aluminium business four years

ago when its acquired Alcan for

$39 billion. But now it plans

to diverse 13 assets across

Europe, Tus and Australia. The

it will concentrate on its

strategy and further improve

the opinionsial

performance. The revamp

includes the creation of a new business unit, Pacific

Aluminium, which will hold the six Australian and New Zealand

assets prior to their spin-off

fromry wrote. These include the

Gove books an the alumina

refinery and the associated

Gladstone power station, the Tom ing ao smeltiner Newcastle,

the Bell Bay the Bell Bay smelter and the New Zealand smelters. The principal remaining asset s

will be its low key hydro electric smelters in Canada. They will be retain and there will be further

investment in some of those

assets. The other jewel in the

crown is the bauxite assets at

weepa. Corporate ad icer Nigel

Lake says it looks like they're

moving away from coal to green power. Something like 63% of their power comes from hydro.

None of the power in the ones

they're looking to sell comes from hydro. Despite the announcement coming just a week

after the carbon tax passed the

lower house, Rio Tinto says

higher electricity costs was

only a small part of the

decision to sell. This is way

beyond one country and which

beyond one element of

environmental factor. It goes

beyond Australia and the carbon

regulation. This is follow ing

a review. Nigel Lake says if

anything the carbon tax has given

given investors certainty and

made it ease dwroer invest in Australia. The carbon Australia. The carbon price

itself will have a pretty

marginal impact on the cost of power. It is that that power is

BTN Extra posed to ongoing

Price rises through the price

of coal over time. The dampening of hopes in a

breakthrough in the euro dent crisis weighted on hopes. Last

week hold had its big est weekly gain but has since dropped. Growing optimism of

plans to tackle the Eurozone

cries an some line science of

life in the US economy have

recently helped lift the

traditional safe haven metal in tandem we questionities.

Analysts are warning price volatility is set to volatility is set to continue

in the near term. To look more

closely at the commodities

sector I am joined by Jonathan Barratt, managing director with commod demod. - Commodity Broking Services. Good morning. Good morning. So

looking first at goldis it's

come off its 3-week high s is

that just profit takers

covering cash position? I think

it is. Gold has had a terrific

run. And I think there's just

this news about what is

happening in Europe, they have

Ian seen a bit of dollar

strength, it's more to do with

dollar length at the

moment. Silver has also

declined. Is that to be expecteded, given that it's

been rising about 31% over the

last 12340s? It is. Silver in -

12 months? Silver is one of

those in my mind as well. It is

a little bit different to

gold. So naturally when you

start to get a shock to system,

things aren't as good as things aren't as good as what

we thought they would be,

naturally you would see silver

come under more pressure than

gold. If we look at the US

dollar, if it continues to be a

safe haven, will that then

continue to weigh on precious

metals? I think it will to a

certain extent. But not eefrl.

Particularly gold in my mind

will remain relatively well or

it won't have as sharp a fall

as eers. That is because we have the inflationary concerns

that we're feeling, the sort of

in Europe, the n the UK. That

to me is gooing to under -

underpin any fall in the price

of gold. If anything support

will come in for gold. We are

nearly at the end of October

going into November, seeing the

end of theier, though, many

were predicting we would hit

$2,000 an ounce by tends of the

year. That looks a long way off

now? It does. There is no doubt

about it. We are seeing a lot

of physical demand for the

metal. That #24 is what we're

seeing out of Hong congress and

China and in knee where we're

seeing a lot of the local pie

byers seeing a lot of demand. That will eventually build down

to the markets. I think the

market and I think we're

relatively confident relatively confident confident that gold will reach 2,000 through some through some time next

year. Let's move 20 oil. It's

fallen off the back of the

continue ed murmurings out of Europe. This is a switch from

last week, last week when we

spoke, we had this plan with no plan, no details and yet oil

had risen. Now what is the deal

here? It's interesting because

oil is trading with the equity markets. That is where we're

at. Now if equities go down,

oil will go down. It's funny

because it's sort of seems to

be that commodity which is in

tune. So it's lock step with equestion tit. Basically. Oil is going to come is going to come under

pressure. Oil has set a range

and I think the Top End of that

range is 88 and the bottom end

at the moment is 85 and then

80. Can you just 80. Can you just explain,

though, because we're also - we've got increased petrol

prices at the bowser, I think

up six cents in Australia and

Sydney. When we see a drop Sydney. When we see a drop in oil, we see rising petrol

prices. Why is that? This is one of the things - It's one of the things - It's a great issue of debate. It

always is. One of the things

that people don't realise is

that 75%, 70 to 75% of

Australian oil is imported. So we have that we have that concern whenever

the international prices do

move. We move. But we have that

problem because we have to buy

in Aussie dollars. So you've

got that other variance in

there. Just the price of oil

but also the price of the ouzy

dollar. So when that dollar. So when that moves

adversely, IU - IE it weakens

prices for the oil remain

high,is Price force petrol

remain high. I'm glad remain high. I'm glad you've explained it because explained it because there are a few people who will be

interested in that. If we can

turn to China. GDP figures will

be out at 12pm Australian eastern standard time

today. Depend tong number, what

impact will that have on the commodity commodity sector? Think I the

market is look at China as a

whole group of Europe numbers.

We had the CPI last week. So we

will be focus whoond's actually

happening. The number s aren't

going to be that good but it will be in line with expect

it's. That's what people have

to realise. When you look to realise. When you look at

growth, where it is, 9%, growth, where it is, 9%, if you

see it starting to trim back a

little bit, that is lock in

step with 2 policy of what the

Chinese authority want. So it

not an overall negative pict

burr u the policy is working,

the economy is slow bug it's

slowing because bewant to - we

want to pull back inflation

>>vrcts there are analysts who

have been hawkish on China for

a while. So what is the moecial

for downside risk if it does

drop below what we're

expecting? We always know that

the numbers out of China can be

ribbery? They can. But this is

part of policy. There are a lot

of concerns about a contagion

in the real estate sector and that is going to have a big

factor on demand. That is all good but when you good but when you look at the

demand for commodity is it's

still. There we're luking Looe

looking to pull back in

consumption and demand. These

numbers all show. That if there

is a slowness in the economy, it's happeningnd, it's

happening to policy and I think

this should be reward >>ee.s

also this story with Rio Tinto

dep, we move on there, expecting demand to be

sustained, despite moderation

in ogrowth growth. Is that just sugar coating in need of a story? I think it is. I story? I think it is. I think

it's about retiring a little

bit of debt. They is a lot of

dent on their books and it's

setting a scene for the future

where they want to shore up

their balance sheet, their balance sheet, amidst uncertain economic times. I

think it's more of a strategy but I think it will bode well

for Rio going toward

forward. So you don't think the

selling off of these assets

signals something much signals something much deeper systemically wrong? Not at all.

The assets were performing but

not performing as well as the

others. It just gives Rio

others. It just gives Rio that opportunity opportunity opportunity opportunity to folkous us on what folkous us on what it's Camp Dogwood at. The hard thing about

about aluminium sit's an energy

consumer and and you really

need to have good Price

need to have good Price strong

prices. The prices for

aluminium have not been as strong as the other base metals

but it seems natural to move

away from that and focus on

what cow can do. - On what what cow can do. - On what you

can do. Migrant workers in

Hong Kong are pro protecting

over the light for residency. A

recent court ruling has given

them the right to permanent

residency but the residency but the Government has vowed to depieth the

decision. Hong Kong is home to

around 300,000 migrant workers

most from Indonesia and the Philippines. Many are angry that the Government is trying

to deny them to right to

permanent residency. It sends the wrong signal, that the

Government is the one leading this discrimination so foreign

domestic workers.way want to

make not only Hong Kong public

but the world to be aware of

this kind of treatment of foreign domestic workers in

Hong Kong. Under Hong Kong's constitution, foreigners are

entitlemented to prerment residency and with it rights to voted, welfare voted, welfare and other

services, if they have lived in the

the country for a period of

seven years. But 2 city's

immigration laws excludes most foreign domestic workers. That

was until a legal challenge found those laws un

constitutional. The court may have overturned the laws but

the Government is refusing to process new applications, pending its own legal

challenge. The court says,

yes, you can apply and then the

immigration says no, we will

not process: I think that is

totally absurd. We hope that

the Government will realise

that what they're doing is

basically against the rule of

the court. If the court's ruling is upheld, more than

100,000 migrant workers may

will be eligible for permanent

residency. The Government says

the decision opens the

immigration flood gates and few

politicians are prebared to back back migrant workers publicly. Ecan't understand how

they can change their face within

within days just before the

election of this council. With

the date yet to be set for the

new court challenge, for many

migrant woecious their lives

remain in limbo. Awe now remain in limbo. Awe now let's

look at what's making headlines around the region. The

securities and future

Commission will seek public

views on regulatory re forms

covering over the counter

derivatives until the end derivatives until the end of November. November. The 'Wall Street

Journal' has a story on the

success of Australian recycled

rubber mat in Queensland rubber mat in Queensland that

has become popular in clubs an pubs. And the 'Financial Times'

reports India and Pakistan are preparing for the biggest liberalise's. That's all for

this edition of Business Today.

If you would like to look If you would like to look back

over any of our interview,

please visit our website. We look forward to your feedback. I'm Whitney Fitzsimmons. I'm Whitney Fitzsimmons. Thanks

for joining me. Enjoy your day.

Closed Captions by CSI

This morning - Telstra shareholders to vote on the billion break-up of the company. We're going thrive the AGM. This Program is Captioned Live. Also today - Australian authorities say there's authorities say there's no confirmation yet that confirmation yet that a 14-year-old Australian boy 14-year-old Australian boy on drugs charges will be drugs charges will be centreto Bali's notorious Kerobokan

jail. An Israeli court gives a

final go ahead for the extraordinary prison - prisoner swap swap deal swap deal involving prisoner

Gilad Shalit and more oil

faumped reen in in New Zealand

but there's still 1300 tonnes

to go with more bad weather closing. In

closing. In Good closing. In Good morning.

You're aching ABC News 24. I'm