Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant the accuracy of closed captions. These are derived automatically from the broadcaster's signal.
Business Today -

View in ParlView

(generated from captions) This Program Is Captioned


Good morning. Welcome to the

program. I'm Whitney

Fitzsimmons. In 'Business

Today' - debt removal. Markets

rally on the US Government's

plan to help banks offload bad

assets. Bargain drive. The Nano's finally on the market

but will Indians get behind the

wheel? And basic currency. In

tough times, bartering is

making a comeback. Those

stories shortly but first a

quick look at the markets.

I'm joined now by Matt Lewis

from CMC Markets. Good morning.

The US market appears to really

like the latest announcement

from the Obama

administration? That's right.

We saw spectacular gains from

US equity markets overnight

with the Dow Jones climbing

some 6.8% while the S & P

closed out 7% higher and the

Nasdaq rounded out the gains at

6.7% higher. The Obama

administration formally

presented its plan to draw

private investors into a

partnership that could buy up

to $1 trillion of so-called

toxic assets from US financial

with the sole aim of freeing up

troubled financial markets. JP

Morgan gained just over 25%

overnight. We have seen the financial sector overall in the

US gain some 46% since its

March 6 lows. Moving on -

we've heard that that vote in

Congress on AIG's bonus mace

have to wait until next month,

but interestingly enough, over

in Europe, ING has asked

employees to hand back their

bonuss? We did see overnight

Republicans ask for some more

time to investigate a proposed

bonus tax legislation aimed at

looking into the misuse of

bail-out funds and how they are

appropriate ed. As you mentioned we saw further

commentary from Dutch bank ING

overnight which has asked some

1,200 employees, including some

of their top 200 executives, to

hand back their 2008 bonuses in

full. It's perhaps as a

reaction to the backlash we saw

last week as a result of the

AIG bonus pool and programs the

Dutch bank has had a dose of

reality in aligning its new

compensation packages. In the

region has seen a stellar rise

on Wall Street overnight. What

are we expecting today? We saw

a very strong day yesterday

across Asia. Given the strong

leads we saw from Europe and

the US equity markets we are

expecting a very, very strong

day on the local Australian and

regional Asian markets today.

Currently the SPI futures

contract pointing to a 2.5%

gain on open. We expecting the

financial sector to outperform

today. It's also likely we'll

see a strong performance from

the energy sector after a

strong spike in the price of

crude oil overnight. This would

flow across the region today.

Economic data, what should we

look for today? Fairly quiet

week in general. Over the next

two days we have both the

assistant and the RBA governor speaking in Sydney and

Melbourne whereas in Japan we

have the monthly minutes from

the February Bank of Japan

meeting. Later in the week we

have some CPI data. Out of Hong

Kong we are expecting negative

trade balance data later in the

week. Thanks for that update. Thanks, Whitney. Now a

look at what's happening with

currencies and commodities.

Wall Street embraced the

incentives offered to help rid

the banks of up to $1 trillion

in toxic assets. The US

Treasury will launch the

program with up to $100 billion

from existing financial rescue

funds, with the aim of thawing

the frozen market for mortgage

backed securities. The Obama

administration wants to buy up

loans weighing down the banks about $1.4 trillion in the bad

and preventing them from

lending. We are very

Conservative tent that in coordination with the Federal

Reserve and the FDIC, other

relevant institutions, that we

are going to be able to not

only start unlocking these

credit markets. It will

contribute nearly $150 billion

from its existing financial

bail-out funds, and through low

interest loans hopes to entice

many private investors to also

bid for the toxic assets. Mr

Obama says this public/private

partnership will help unclog

credit markets. We believe this

is one more element that is

going to be absolutely critical

in getting credit flowing

again. It's not going to happen

overnight. There's still great

fragility in the financial

systems. But we think that we are moving in the right

direction. The US stock market

has embraced the plan with all

of the key indices jumping

sharply. World trade volumes

will see the strongest

contraction since World War II

as demand collapses according

to the WTO. World Trade

Organisation is forecasting a

steep 9% fall which is much

more extreme than the 2.8% fall

predicted by the International

Monetary Fund in January. It

says the volume of developed

country's exports will fall 10%

this year. Trade dependent developing countries will see

export volumes shrink by 2 to

3%. WTO Director-General Pascal

Lamie says governments must

avoid making this bad situation

worse by revertsing to

protectionist measures. World

trade tapered off sharply in

the last half of 2008 to 2%

over the whole year.

Gold gained in Asia as a

weaker dollar fueled demand for

the precious metal as an

alternative investment and a

store of value. Gold has risen

by 3.2% in the past week, and

the US Treasury's plan to rid

banks of toxic assets is

expected to give it a further

boost. To look at whether the

risk aversion will continue to

support the gold price I'm

joined by Jonathan Barratt

Managing Director, MD Commodity

Broking Services. Good morning.

Welcome to 'Business

Today'. Thanks, Whitney. Now,

how has the news of the US

Treasury's toxic asset plan

impacted gold markets? At the

moment, the news which Geithner

announced has sort of set I guess a little bit of

profit-taking in gold. Gold

actually closed down about 5.5

be quite interesting as to how dollars from New York. It will

the market reacts. If the plan

sort of reduces that risk on

the banks' balance sheet, then

there might be a flight away

from gold as we get that form

of security back into the

marketplace. So I guess in a

nutshell, it might actually see

more profit takers enter the

market in gold, purely as a

result of the announced plan.

Recently we've seen these

interesting moves by the US and

the UK to effectively print

money. Now, if inflation rises,

will we see investors use gold

as a hedge? I think we will.

It's well entrenched in how we

see gold as an inflation

fighter, so I think that when

we do get those sparks of

inflation starting to occur,

then I would actually see that

more people will trade back

into gold. It's a lot easier

these days for people to get

access to it. So I think when

we do see those it will spark

some inflation to occur and we are relatively positive that

they will, even though it is

quite negative but we are quite

positive that we will see

inflation pick up. That should

support that gold price.

Looking on the negative side

then as we see more money

flowing back into equities,

could we see that undermine

gold as a safe haven? Yes, it

could. This is one of the

concerns many of us have, where

gold has had a terrific run,

and then when you start to see

that things - that the ship

might be steadying itself again, people will say hey

let's move out of gold and back

into equities and that's a real

concern for gold, because it

has been the prime mover this

year. So if we get a little bit

of relief, whether it be

temporary or whatever, then you

will see profit takers in and

gold prices should come down.

With these factors in mind,

then, what's your outlook for

the gold price in the medium

term and then even looking out

into the future. It will

probably bounce around for a

while, but long term as

well? Let's see how this new

plan, this new US plan by

Geithner unfolds. But at the

moment, it's suggesting that

gold could come under pressure.

Trade lower for the next couple

of months. But as we see that

this turns around into

inflation, then we actually see

inflation pick up quarter 3,

quarter 4. If that's the case

then I see this dip in gold

which we see will occur in the

next month or so as a good

opportunity to start to buy. We

feel when inflation picks up, people will go back to

gold. You say a good opportunity to buy. What level

is that? We'd be looking at

around about the 8 90 level.

And if it breaks that area

perhaps the 870. But at the

moment those force are areas

we'll focus on for the

long-term hold. This climate, how important is it for

investors to be taking a

long-term view? It's very important these days, not just

with the gold, but with a lot

of or other investments.

They've really got to take that

long-term approach to it. We're

not out of the water yet. It's

not clean sailing about there

are good opportunities at these

levels. If you take those opportunities, take the long-term approach to

investment, you should be OK.

There's some anecdotal evidence

that young Japanese retail

investors are turning to gold

purchasing plans as they seek

to protect their finances. It's

not a traditional move? No, but

the young investors - Japan has

its own set of economics and

issues. And there is not a lot

of confidence that these young

investors can look into,

whether it's stocks, whether

it's money. So they're looking

outside that. It's interesting,

because they're treating it as

the only store of value,

regardless of what happens. So

I think it's a knew breed.

There will probably be more

physical demand from this form

of investor because it is a

store of value for them. But

it's interesting, though,

really, because gold does have

an intrinsic value, regardless

of what happens. So it will

always have a value, and it's

interesting that people kind of

overlook it. Look, they tend

to. It really depends on the

access and what access they get

to the market. Because it is a

guide but when you look at gold

as are the part of a portfolio,

in my mind, it's there as a

safe keeping, and I think

everyone should have some sort

of exposure to gold in their

portfolio. Unfortunately,

we'll have to leave it there, but thanks for your time

today. OK.

It's been launched in a

blaze of publicity but analysts

say Tata's new small car the

Nano won't spark a turn around

in the company's finances in

the short term. It was the

star of a glitzy ceremony in

Mumbai. The company chairman is

confident the attraction of car

ownership will be strong enough

to overcome buyers' concerns

about the economy. It was

conceived of as being a car

that would give the people of

India an opportunity to own a

car that had not been within

their reach before. And I hope

that that is what we will -

that is what we will achieve.

Prices will start at just under

$2,000, direct from the

factory. More upmarket models

will come with airbags, electric windows,

airconditioning and a radio.

The first Nanos will be on

India's congested roads by

July. Japan's two largest steel

mills, Nippon Steel and JFE

Holdings, have negotiated a 57%

price cut for hard coking coal

from BHP Billiton. The mills

will pay up to $129 a metric

tonne for the coal from April

1, down from $300 last year. Australia's Foreign Investment

Review Board will extend a

review of the $1.8 billion

takeover of Oz Minerals by

China's Minmetals until March

24 . Oz Minerals needs a

Chinese takeover for survival.

Australia's regulators have now

extended investigations into

three separate Chinese bids for

Australian miners. And Japan's

biggest bang Mitsubishi UFJ

plans to cut 1,000 jobs as a

tumbling stock market depletes

its earnings. The bank slashed

its full year forecast in

February. Australian

pharmaceuticals group Sigma is

showing signs of a return to

health. Increasing profits and

rolling over debt facilities.

But that may be little comfort

to long-term investors who've

seen the company's share price

tumble for the last two yeeks.

While health stocks are often

viewed as defensive Sigma says

the current climate makes it

too difficult to give

predictions for the year ahead.

Sigma Pharmaceuticals' latest

result is just a small step on

the road to recovery. Australia's largest contract

drug maker has posted a net

profit of $80 million for the

2009 financial year, a rise of

nearly 4%, but just below

market expectations. Probably

due in part to a less than full

recovery after the PDS reforms

were implemented in the second

half of 2008. They didn't

really recover from an operating perspective. A

quarter of Sigma's products

come from generic medicines an

area in which Sigma says it's

maintaining market share in a $2 billion a year

industry. Fundamentally for the

generics business we need to be

first to market, it's a key

success factor in terms of the

generic business and us being

able to maintain dominant

position for a period while the competitors get into that channel. But in recent years

the company has been hit by

increasing competition and

tighter margins in the generic medicine business because of

the emergence of low cost

producers in countries like

India. Sigma's share price has

fallen from $3.26 in late 2005

to just 99 cents now, even

after today's 3% rally. But the

company has paid down half of a

$200 million debt facility that

was due in September, and

rolled over the remainder to

2011. Despite the fact that it

was a slightly disappointing

profit result, what the

refinancings do indicate is

that cash flow generation in

Sigma is still very positive

and that its lenders still had

some confidence to provide

funds over the medium term.

Sigma says its business is

largely defensive, estimating

that 70 to 80% of its

operations are insulated from

the economic cycle by the

pharmaceutical benefits scheme.

While Chief Executive Elmo

Diawas says Sigma can't provide

detailed guidance because of

the uncertain conditions he is

forecasting modest growth in 2010. The environment in

Australia is very positive for

the health care service and

good providers. Demand remains

relatively steady through a

downturn and also the funding

environment with government

funding or subsidies for things

such as GP consultations and

prescription medicines tends to

support consumption. David

Grossman believes there won't

be much consolidation among

local health care players in

the near term but he thinks

some of the better capitalised

funds like Sonic Healthcare and

Ramsay might look to expand

their activities overseas when

more investment opportunities

become available. The global

economic downturn might have

unintended consequences for the

increasing numbers of companies

which are laying off staff.

According to experts on fraud,

retrenchments can provide

opportunities for staff left

behind to feather their own

nests at the expense of their

employer. As recession bites

and profits plunge, corporate

Australia is shedding staff to

try to stay in the black. The

No. 1 issue ... But according

to fraud expert John Watt there

are dangers when too many jobs

are rolled into one. For

instance, if there is one

person who is both purchasing

and in fact as a result of the

change also certifying, that

person has the ability to fix

the books. Detective Chief

Superintendent Stephen Head

leads the Fraud Squad in London

where many companies and

particularly banks are laying

oftens of thousands of staff.

He agrees with John Watt and

goes further, saying those

involved in protecting a

business from fraud should not

be among those retrenched. We

realise that there's a hard

times for companies, and some

of them are laying off people

right across the board but this

is the time when we need to be

very vigilant around fraud and

I would urge them to be very

careful about those sorts of

issues. Detective Chief Superintendent Head and John

Watt were keynote speakers at

the 10th annual fraud

conference in Sydney. They

believe fraud is increasing and management needs to take it

more seriously. It's going to

happen in some other

organisation and not my believe. One of the challenges

is getting the executive team

to understand this is an issue

and it's an issue they need to

plug into. Some organisations

will experience more fraud than

others ... Kelvin Kenny has

been investigating fraud for

nearly 20 years. He says management also needs to understand they'll never be

able to make their company

fraud-proof. As an employee,

you'd be searched on the way

into work, searched when you leave work, every phone call

will be monitored, every bit of

photocopying you do will be

looked at to make sure you're

not gaining a benefit yourself.

The controls would be so

rigorous so you won't commit

fraud, it's not a place lots of

people wouldn't want to work.

Kelvin Kenny believes companies

need to regularly check the

backgrounds of their employees. It's very unusual

for an organisation to redo the employment screening through

the life of that employee. Best

practice organisations in

Australia like law enforcement

for example will tend to rescreen their employees as

they progress through their

careers, particularly in the

more sense tef roles. Mr Kenny

says there is no such thing as

a typical fraudster and he said

contrary to popular belief the

biggest reason for fraud is not gambling, drug addiction or

hard times, it's just greed.

The human cost of Japan's

recession is growing as the

country's suicide rate which is

already one of the world's

highest increases due to job

and home losses. But counsellors are concerned the

end of the financial year will

signal a new spike in the

number of suicide attempts. At

this picturesque spot at the

base of Mount Fuji, deep inside

dense and dark forests is where

Taro says he hoped to end his

pain. TRANSLATION: My will to

live disappeared. I'd lost my

identity so I didn't want to

live on this earth. That's why

I went there. You need money to

survive and support your

family. He asked us not to

show his face, ashamed of what

he did. Money is what Taro

didn't have after his iron manufacturing company fired

him. Homeless and drowning in

debt he came here, to the

forest known here as Japan's

suicide forest. He slashed his

wrists then wandered for days.

Nearly dead from dehydration,

starvation an frostbite, a

hiker found him and called

paramedics. Taro is just one of

hundreds of Japanese who've

come to the suicide forest to

try to kill themselves. Japan's

government says this is a

destination for the desperate.

This area logs the highest

number of suicides in the

entire country. A national rate

that's among the highest in the

world now escalating after the

country slid into recession.

Japan says year-to-year,

suicides in January of 2009

jumped 15%. And more will come

here, warn these volunteers

patrolling the forest as Japan's companies continue to

lay oftens of thousands of

workers. 4.1% of Japanese are

now out of work. These men both

say they tried to kill

themselves because of their

debt. Now on the road to

recovery, they're now

volunteers who've posted signs

in the forest urging people to

call them for credit

counselling. "People want to be

saved but don't know where to

seek help. We know how they

feel because we've been there."

"Unemployment is leading to

this. Society and the government need to somebody immediate counter measures to

prevent suicides." Beyond foot

patrols locals have also set up

these security cameras. The

goal, to track, monitor an

record the people who show up

so they don't just disappear. They come from

across the country. We're the

last resort to stop them.

There will be more suicidal

people who come here because of

the bad economy, especially at

the end of the fiscal here in

March. The Japanese government

calls the problem a priority

and has publicly pledged to cut

the number of suicides by more

than 20% by 2016. To accomplish

this, they plan to improve

suicide awareness in schools

and workplaces. But social

service agencies like this

suicide prevention and credit

counselling office say there's

not enough funding and

culturally, suicide is still

seen in Japan as an honourable

way out of joblessness and credit problems. One year after

his suicide attempt, Taro is

now volunteering here at the

agency that helped him get back

on his feet. He's still living

in a shelter, struggling to

find a job. And ashamed, he

says, that he still thinks

about suicide.

TRANSLATION: I try not to think

about it but I can't say never

but for now, the will to live

is stronger. A will that can

be broken, he says, in these crushing economic times.

In times when cash is in

short supply, businesses and

individuals are finding new

ways of saving money. Bartering

is back with a lot of it taking

place on-line. Almost anywhere

you go in the country these days, people are doing

something new to get by. It's

about getting the things that you need without spending the

money that you don't have.

Adjusting to the times. Dana

Woods is a single father who

used to make $100,000 a year as

a sales manager in

Indianapolis. Now he's out of a

job. Has started fixing cars in

exchange for day care for his

three children. Really takes us

back to who our country was

founded on. Bartering has

become the new currency of economic necessity there is

even a so-called free store

that opened up in downtown

Manhattan. You can take

anything you want, as long as

you give something back in

in Baltimore and return. There are also stores

Detroit. Everything in here is

free? Yes, that's right. So

it's sanctioned shoplifting? Yes, it's been

called that. (Laughs) And

bartering is gaining popularity

among small businesses. Kevin

Walters owns a restaurant in

Harlem. He used barter for

dental work. Dentistry is very

expensive. I don't have the

cash these days. What was he

able to offer in return? Bought

you a little vegetarian meal.

Unlimited Creole food. His

dentist ate it up. You have thousands of dollars of dentistry. Let's see your

teeth. Not bad! Postings for

barter on the web site

Craigslist have doubled over

the last year. There is an attorney offering legal help

for landscaping. It's like in

the old days, chickens and eggs for milk or

something. Creativity and

self-reliance. A nation making


Now let's take a look at

what's making headlines around

the region. The 'Standard'

reports on the feud over the

estate of the late tycoon Nina

Wang. Her brother has warned

the claimant, a feng shui

master, he will not see a penny

of it. The 'Financial Times'

says investors warmly endorse

the on -- Obama administration's plan to

deal with toxic assets. That's

all for this edition of

'Business Today'. If you want

to look back over any of our

interviews, please visit our

web site. We look forward to

your feedback. I'm Whitney

Fitzsimmons. Thanks for joining

me. Enjoy your day.

Closed Captions by CSI