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Good morning. Welcome to the

program. I'm Whitney

Fitzsimmons. In 'Business

Today' - reporting season.

Major US companies boost

sentiment on Wall Street.

Cautious optimism. Ben Bernanke

signals hope for the US

economy. And a new political

stance. Business urged to keep

quiet on the Stern Hu case.

Those stories shortly, but first, a quick look at the

markets.

I'm joined by Julia Lee from

Bell Direct. Wall Street edged

higher overnight? It was a

pretty shaky session on Wall

Street but in the end better

than expected earnings helped

Wall Street to the seventh

consecutive session of gains

for the Dow and the 10th

consecutive day of gains for

the Nasdaq. For the Nasdaq,

that's the most we've seen in

around 12 years. Earnings

season in focus. Caterpillar up

7.7%, despite saying that

second quarter sells fell by

66%. We also saw Merck up by

6.1%. We saw second quarter

earnings falling by 12%, but

that was actually better than

expected but Coca-Cola not

having a good day. Down by

1.3%, dragging on the market

despite second quarter revenue

increasing by 43%, helped by

India as well as by China. We

saw the Dow in the end up by

0.8%, the Nasdaq and the S & P

500 gained 0.54%. We saw

profit results from Apple,

Yahoo and Starbucks? Apple was

the big one after the bell.

It's shares have risen. They

were up by 3.8%, beating expectations. Earnings per Shea

came in at $1375 versus $1.19

in the previous year. This has

been helped by the new iPhone,

as well as the cheap er Mac

notebook computer. Yahoo saw

its shares fell by around 2%

and saw second quarter revenue

down by 13%. If we look at the

current quarter, current

operational cash flow is

expected to be lower. That was

a negative for the stock A

really mixed result there from

the tech sector. In the UK the budget deficit surged to a

record high? In June we saw the

deficit in Britain up at $13

billion. That's that was better

than am lift expectations. They

were expecting $15.5 billion.

This is due to decreasing tax

revenue as well as decreasing

revenue from the plummeting

housing sector in Britain.

Jobless claims are rising. Net

debt, 56.6% of GDP, the highest

since the mid 70s. What can we

expect for investors in Asia

around the region? We've seen a

relatively positive lead out of

Wall Street. Asian markets are

starting to get worried on the

huge rise we've seen in the

last two weeks. Commodity

prices mostly higher. So it's

expected to be a mildly

positive day in Asia. Crude

oil rallied for the seventh

straight day. That was on the

back of stronger equities, and

the stronger than expected

earnings reports. Also there is

a storm that helped oil refineries --

that hobbled oil refineries.

CPI figures as well as BHP

Billiton releasing its figures

for June in Australia. We're

expecting to see CPI numbers in

the second quarter fall below

the 2 to 3% band that the

Reserve Bank of Australia aims

for. BHP has just come out with

its production report. It's

seen a quarterly increase in

production for 12 of its

commodities with a record

annual production in both copper as well as petroleum.

If we look at some of the

numbers year on year,

metallurgical coal up 4%, pelt

troll yum also up 4% but iron

ore fell 10 wirs a focus on

safety. So BHP Billiton very

much in focus today on the

Australian market. Investors

really interested in the commentary, BHP Billiton saying

it's well positioned for when

demand picks up again. Julia,

thanks for the update. Thanks,

Whitney. Now let's look at what's happening with currencies and commodities.

Ben Bernanke has hinted at US Federal Reserve Chairman

signs of improvement in the

economy and says interest rates

are likely to remain

exceptionally low for some time

. He made the comments before

the House financial committee

in hits twice yearly report on

monetary policy. Defending the

Feds' policies in the fighting

of recession the Chairman said

low interest rates and a

stimulus plan had boosted

growth prospects. But he warned that might not be enough to

stop job losses. Unemployment

is expected to remain a blight

on the economy and at high

levels until 2011. He expects a

slow turnaround to get under

way by the end of the year. Better conditions have been accompanied by improvements in economic

prospects. Consumer spending

has been relatively stable so

far this year. And the decline

in housing activity appears to

have moderated. As well as the

Fed's policy of low interest

rates, Congress approved a $878

billion economic stimulus plan

in February. As popular opinion

grows that the worst of the

global downturn is behind us,

there's optimism Australia can

avoid a recession. Minutes from

this month's Central Bank

meeting indicate the board is

now comfortable with the way

the economy is tracking, while

it reserves the right to cut

rates further, leading

economists say that won't be

necessary. It appears Australia

is truly the lucky country. It

could have been worse. In the

days after the breakdown of the global banking system last

September, the wheels fell off

didn't happen in some major economies. That

Australia. Three months ago

Access Economics was predicting

the economy would shrink this

financial year. It's now

forecasting mild growth growth.

The government however is more cautious. There are still very cautious. There are still very

big challenges out there. Very

big challenges which flow from

the global recession. Of course

that's why we need to keep in

place economic stimulus to

support business, to keep customers going through the

door, to support employment.

Access says unemployment will

now peak at 7.5%. 1% below the

government's budget forecast.

But Stephen Walters says that

forecast is too optimistic and

is tipping the jobless rate

will peak at 9% next year. The

hours worked goes down first

and then secondly firms start

taking a more serious look at

their staffing. We're getting

into that process now. Even if

we get to 7 or 7.5%, that's

still nearly 2% above where we

are now. There is a still a lot

of bad news on the labour force of bad news on the labour force

to come. It's a view shared by

the Chief Executive of

Westpac. It remains fragile. I

use the word cautious optimism.

There could be unforeseen or

unexpected event it is a result

in puncturing this confidential. The Reserve Bank's confidence in the

economy appears to be growing.

The minutes from last month's

board meeting said the economy

is faring better than expected

and on an international basis

the large downside risks had

abated. While the RBA maintains

a slight easing bias, the

wording from the minutes suggests the board thinks its

work is done. We appear to be

getting to the bottom end of

the interest rate cycle. If you

look at what's happening with bill rates you will see they

are on the way up. So the

market as a whole is beginning

to expect rates to go up.

Which Stephen Walters says is

not likely this year. Our view

is that the easing cycle is

over well and truly. That the

next move will be a rate hike.

But I think in the near term

the Reserve Bank's very

comfortable with where they are

at a 3% cash rate and I think

it will probably be another 12 months before the Reserve Bank

starts raising interest rates.

The former boss of BHP Billiton

Chip Goodyear won't be taking

over as Chief Executive of Singapore's

Singapore's Temmasec holdings

as expected. It surprised many

when it named Mr Good year as

incoming CEO last February but now it's announced that his

role will be terminated on

August 15th. According to the

official statement, it was Mr

Goodyear's idea but company

insiders say his proposed

changes to strategic directions

and senior management were not

well received by well received by the board.

China's largest car maker Cherry Automobile is set to

take advantage of a recovery

and launch an IPO. It shelved

plans last year because of poor

share market conditions. The

company has yet to say where it

will list or how much it hopes

to raise. It comes after Klein

allowed new share listings to

resume last month after a ban

on IPOs for nearly a year. The

Shanghai composite index has

risen by nearly 80% from 2008.

Australian company Oz Minerals

says it is back in business and

it's looking to expand its

remaining mine site. The

resource company has posted its

first production figures since

it was forced to sell most of

its mines to China's Minmetals

to pay off massive debts. Oz Minerals acting

Minerals acting CEO Bruce

Lubday was good to have some

good news for investors. In the

June quarter the company's

Prominent Hill Mine met market

expectations by produce ing

27,000 tonnes of copper. It's

meeting all of its hurdles. And

we're looking forward very much

to achieving our production

guidance and indeed our cost

guidance for the full year.

Last year, Oz Minerals was

created by a merger between

Zinifex and Oxiana but was

crippled by debts of more than

$1 billion. Last month Oz

Minerals got its books back in

order after selling most of its

key assets to China's Minmetals. It retains only the

gold and copper mine at

Prominent Hill. The results

were very pleasing. There has

been a lot of hope placed on

the project. They've had quite

a lot of time to get it right.

Oz Minerals expects to produce

between 85 and 100,000 tonnes

of copper at Prominent Hill

this year, and up to 70,000

ounces of gold. The miner plans

to conduct further exploration

around Prominent Hill but it

remains wary about getting back

on the acquisition trail. If an acquisition opportunity comes along at some stage in along at some stage in the

future, then we'll look at it.

But we're certainly going to be

very careful with managing our

capital and not getting ahead

of ourselves. If they can go

back to their roots and do

that, then they've got a very

good chance of being successful

and they certainly have the

capitalisation and liquidity on

the balance sheet to do that.

Oz Minerals shares closed half

a cent weaker. China is the key

to saving Australia's economy, so people so people shouldn't make a fuss

over the detention of Stern Hu.

That's the message from one

Australian politician. He says

that Australia needs China much

more than China needs

Australia, and that business

figures should remember that

when talking about the arrest

of Rio Tinto staff. For the

last decade, Shanghai has been

a place of great prosperity for Australian businesses. But Australian businesses. But as

they gathered in China's

economic capital the moods with

waun of restraint and

nervousness. The detention of

Rio Tinto's Stern Hu and three

others has left many here

wondering about the dangers of

doing business in China. Into

this steps the West Australian

Premier, who had a message for

those who've criticised China's

handling of the Rio

handling of the Rio case. China is more important to Australia

than Australia is to China. As people working and representing

Australian business, I urge you

to be very conscious of that.

Nobody wanted to talk to us on

the record about the Rio Tinto

bribery case. If the detention

of Stern Hu is more than just a

simple criminal matter, they

don't know who could be

targeted next. The premier targeted next. The premier of Western Australia melt the

mayor of Shanghai. He requested that the Stern Hu matter

proceed quickly and that

Australian diplomats get

greater access to them but he

says there are greater issues

at stake here. I do have a concern that the amount of

attention this issue is

attracting could in some way

damage the long-term relationship between Australia

and China. And he reiterated

what he said to business

figures earlier on, that

Australia has the most to lose

in this stoush. We depend on

the growth of China and China continuing to buy from

Australia for our economic

prosperity. It's a very clear

message. In fact the message

wasn't so much directed at

China but directed at Australia

and Australian business people don't underestimate, don't

complicate and don't confuse the relationship with China. Chinese Government

officials have told us that

they don't want Australians

stirring things up with the Stern Hu case.

Stern Hu case. Now, it seems

the West Australian Premier is

pushing the same line. But the

tension between China and

Australia is real and it will

remain that way as long as this

matter continues. Stern Hu the

head of Rio Tinto's China team,

remains in custody in a

detention centre on the

outskirts of Shanghai. He still

hasn't been charged and the West Australian Premier West Australian Premier was not

told anything more about the

allegations against him.

Yesterday, we saw the

startling move by Japan's Prime

Minister Taro Aso to dissolve

Parliament and push the country

to a general election on 30

August. The move comes after

Japan suffered through months

of crippling economic data and

the Prime Minister faced an

open party revolt against his unpopular stewardship. But the

question S. Will the election

see the sun rise again on

Japan's economy or will it

continue to falter? For more on

this I'm joined by Richard

Martin from IMA Asia. Welcome

to the program. Good

morning. Do you think this

move's by Japan's Prime

Minister is a wise one? In a

sense he had no choice at all.

He was due to call elections.

He would've had to call them at

the end of this year. Just a

few weeks ago, they had a major

defeat in the Tokyo City

election. So Mr Aso was either

going to be pushed out of power

by his own party or he had to call an election. So call an election. So he's

called the election . The

Prime Minister says that the

dissolution is necessary in

order to gain understanding and

cooperation from the electorate. Do you think that's

really the case, or has the LDP

had its day? To an extent the

LDP has had its day, but

they've had a very hard time in

this last year. They lost

control of the Upper House in

the last Upper House election.

It's made it very difficult

for them to get their policy

through the Parliament. But the

bottom line is the sentiment in

Japan is moving them. What do

you see happening then as a result. Election? Can the opposition parties really

chisel Japan out of this

difficult economic predicament? It's hard to see

that at the moment. The

opposition party perhaps quite wisely

wisely is not doing much to

outline policies at the moment.

It's just running on the fact

that ordinary voters in Japan

seem to be tired of the LDP. To

the extent that we know about

their policy, there's just a

few basic points they've

outlined. First they want to

get more money through the

households and lift consumer spending that looks like being

done through a mix of tax cuts

and probably some subsidies for those those families that have

children. Elsewhere they're

talking about a slightly less

closer alliance with the United

States. That means they might

pull back from some of their

military or supply commitments

to offshore expeditions that

the Japanese Defence Force has

undertaken. Have they

highlighted any policy moves to

increase or strengthen the

social safety net to ensure that that people will spend as

well? Well, that is going to be

a big, big issue. Just in the

last few weeks, we've seen some of Japan's large companies,

JAL, the airline, for example,

announcing that if they're to

survive they'll slash their own

tension schemes, the company pension scheme. You a know

Japan is one of the oldest

societies we've got in the

advanced countries, and top of

mind, this is a very mind, this is a very big worry

for many Japanese voters. If

the opposition does win government, psychologically,

what impact will that have on

Japan as a whole, because the

LDP has governed since 1955.

Quite a long time. Indeed.

Well, they've - for all but 10

months, there was a brief

period in the 90s when we had a

small opposition party, but in

terms of sentiment, this is the

problem for the LDP. If you

look at the polling that's been

done now, people are just tired

of it. It's not just the

economic policies. There've been stumbles by Prime Minister

Aso, scandals with a whole

string of LDP ministers. So

there might be a positive flip

on sentiment from this, people on sentiment from this, people

saying "We've moved beyond it,

thank heavens, now we have a

chance for a new start." We'll

watch for that. Do you think

they need to be reinvented?

They have China snapping at

their heels in terms of

innovation and their

economy. If we separate Japan

into two parts, we have two

separate issues. We have the

giant corporations in Japan,

the big manufacturers. They

have a tough time, just as you have a tough time, just as you

were alluding to, they're aware

that Chinese manufacturers with

lower cost bases are coming up

very fast on technology and

quality and that's a challenge

to them. But we think the big

Japanese manufacturers are on

top of this. We've seen a

massive amount of money being

poured into R & D, and I think

their game plan is to come out

of this recession with leading-edge technology products. We've seen the

Japanese do that before. The

second half looking at their

economy, how the market works,

that's in deep trouble. That's

where we have to look to a new

government to come up with

reforms that reignite domestic

growth. Onof that is on the

agenda yet but unless they do

it they will have sub 1% growth in the next in the next decade. I was

recently in Japan. There was a real concern about the fact

that Japan's factories will

become or could become more of

a components or parts maker

which would then export to

China for production because

it's cheaper to manufacture

there. Yes. There is a big

shift worldwide in production

and it hurts the Japanese most.

What kept their export manufacturers running through

the last six or seven years was

a relatively weak yen. As it

crept up last year, and we saw

it come all the way up to 90

yen to the dollar that really

started to heart Japanese

export manufacturers. Simply

working off a weak yen is no

longer a viable strategy. Whether they get

Whether they get sucked into

that Chinese manufacturing

program is not quite clear yet.

Remember the Japanese companies

are very big. They're very

power.. They have a lot of

offshore operations in America. They've started to build them in Thailand and other maces

like that we'll have to see how

that plays out. What's your

prediction in terms of the

result of the election and also its impact on Japan's

economy? The result is going economy? The result is going to

be very interesting. Right now

the LDP and the coalition

partner they have are sitting

on about 303 seats in the Legislature. I think that's

just over 75%. The opposition,

the DPJ, is on about a third of

that. The LDP will be aiming to

just win a simple majority with

their coalition partner. They

know they face a big know they face a big loss. If

the DPJ does win, you just look

at the numbers. It's going to

be a giant landslide . Polling

suggests that is likely. So we

may well end up with a DPJ

government once we're through

this August 30 election. What

are they going to do? It's a

situation where as you said in

the introduction these guys

haven't been in power at all in

the post-war period. A few of the post-war period. A few of

the DPJ guys were in the LDP

and had some ministerial role there at different times but

it's going to be an untested

government. No clear policy

statements and we'll have to

watch them closely. Richard

Martin, thanks for your time today. Thank you, Whitney.

The global recession is

continuing to affect airlines

including budget carriers as

well as the majors. Britain's

Ryanair is cutting flights out

of London by 40% but it's not

blaming the recession, instead,

it says Britain's travel taxes

are responsible for the cuts.

It's the airline famous for its imaginative charges but despite

that, more of us are nigh

Ryanair. Passenger numbers were

up 15% over the last year. But up 15% over the last year. But now, even Ryanair is feeling

the pinch. This summer it's

running 40 planes at Stansted,

but for its winter schedule,

it's cutting that to just 24.

And that's a bigger cut than it

made last year. Its combative

boss though is blaming not the

recession but the fees it has

to pay. We're cutting back

flights sadly in the UK where

the government's ?10 tourist

tax is devastating

tax is devastating tourism. But

overall we're growing very

strongly this year we'll add

about 9 million extra

passengers but mainly in

European countries who in

recent months have scrapped the

taxes altogether. Budget

airlines might be finding

things difficult, but for the traditional airlines the pain

is much worse. The US carrier Continental Continental announced today

it's cutting 1700 jobs. British

Airways says it's likely to

have lost ?100 million just

over the last three months.

Across the industry premium

travellers were down by almost a quarter in May compared with

a year earlier. And it's that

drop which is really hitting

the major carriers. First and

business-class passengers are

downgrading flying economy or

perhaps even with budget perhaps even with budget

airlines instead and some firms

aren't even sending their staff

on business trips at all,

preferring to use video

conferencing as well. The

premium market is very important. Essentially that's

where the profit is made. The

folks who sit in business and

first essentially pay for that

flight, and those who sit in

the back of the bus don't. If the back of the bus don't. If the recession wasn't bad

enough, many airlines are also

being hit by the effects of

swine flu, with some would-be

passengers reluctant to travel.

Tourism operators in India are

scrabbling to book tours and

fill hotels for visitors

wanting to catch a glimpse of

the total solar eclipse today,

in eastern Bihah tourists are

lining up to guy goggles and

vying for the best position witness

witness the event. While in a

northern state, officials are

anticipating a 90% booking rate

in the region's hotels and

they're expecting around 50,000

visitors in the city and it's

hoped they'll spend those

much-needed tourist dollars.

Another phenomenon like this

won't be visible for over a

century. Now a look at what's

making headlines around the

region. The 'Standard' says

Henderson Land Development is

close to finalising its

negotiations with the Hong Kong

Government over the land

premiums being charged for two

development sites. The

'Financial Times' leads with

it. Emmasec's decision not to

proceed with appointing Chip

Goodyear as its new CEO and the

'Wall Street Journal' also

features that story. That's all

for this edition of 'Business Today'. I'm Whitney Fitzsimmons. Thanks for joining

me. Enjoy your day. Closed Captions by CSI