Westfield gets restructure gets go-ahead

Westfield's shareholders are set to approve a $70 billion restructure of the company. Source: AAP

WESTFIELD will leave its Australian shopping centres behind in search of growth opportunities overseas after winning a tough shareholder battle over its $70 billion restructure.

THE restructure got the green light on Friday after shareholders in Westfield Retail Trust, which owns half of the shopping centre giant's Australian and New Zealand assets voted in favour of the controversial plan.

Westfield Group will be split in two from June 25, pending final approval from the NSW Supreme Court, with the new Westfield Corporation taking on the company's international business and the Australian and New Zealand shopping centres transferred to a new company called Scentre.Both companies will be chaired by Westfield founder Frank Lowy and the Lowy family will maintain holdings in both businesses.But Australian shoppers won't notice any difference, with the Westfield brand to be maintained under Scentre Group.The move gives Westfield greater freedom to focus solely on growth opportunities overseas, without the distraction of its Australian shopping centre business, which has little room left to expand."The strategy of Westfield Corporation is to own, develop and operate iconic shopping centres in some of the world's great cities," co-chief executive Steven Lowy told reporters on Friday.That includes the massive Westfield World Trade Centre development, a planned development in Milan which the company is billing as "the best shopping centre in Europe" and major centres in the UK.But the move almost didn't go ahead.Westfield Group shareholders overwhelmingly backed the move at a meeting last month, but WRT investors looked set to vote down the proposal, with only 74.1 per cent of proxy votes cast in favour of the restructure.On Friday, the total vote was 76 per cent in favour.A significant minority of shareholders in WRT, which was itself spun off from Westfield in 2010, opposed the move on the grounds it would create a higher risk business with more debt than the passive property trust they bought into.Australian Shareholders Association spokesman Stephen Mayne said Westfield had run a well orchestrated campaign to win over institutional investors in the past few weeks."Ultimately they ran a very successful lobbying campaign against those institutions that voted against it or didn't vote," he told AAP."The question is, who flipped?"Steven Lowy downplayed concerns about debt levels, noting credit ratings agencies S&P and Moody's had already given Scentre A ratings."We felt that debate was well overplayed," he said on Friday.Fellow co-chief executive Peter Lowy said Westfield Corp would maintain its listing on the Australian stock exchange but is looking at the possibility of a dual listing overseas.

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Vic building workers face drug tests

BUILDING workers on Victorian government projects will face random drug and alcohol testing from July 1.

VICTORIAN Finance Minister Robert Clark said requiring all building companies that tender for taxpayer-funded projects worth $10 million or more to test workers for drug and alcohol use among measures he said would cut substance abuse, intoxication and drug dealing on building sites.

Head contractors must perform a minimum number of random tests on workers each month and identify what methods they will use, Mr Clark said on Friday.Contractors will determine the level of intoxication they deem unsafe and how workers will be sanctioned if drugs or alcohol are detected in their systems, he said.Tenderers will have to list site security measures, which may include CCTV, a swipe card access system and photographic or biometric security systems in a bid to stamp out criminal activity."We believe this will save taxpayers' money and it will help ensure law-abiding workplaces," Mr Clark said."We are introducing these guidelines to ensure that every contractor that tenders for Victorian government construction projects needs to commit to have processes in place to guard against drug and alcohol abuse in their workplaces and also to ensure site security."When the guidelines were first announced, Construction Forestry Mining and Energy Union (CFMEU) Victorian secretary John Setka said the guidelines would unfairly single out construction workers."There is no epidemic of drug taking on construction sites," he said.

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Troops off to Iraq to protect Aussie staff

The Australian government is continuing to monitor the situation in Iraq. Source: AAP

AUSTRALIA has sent soldiers to protect embassy staff in Baghdad as Prime Minister Tony Abbott warns that nobody should underestimate the threat posed by terrorists bearing down on the Iraqi capital.

DEFENCE on Friday confirmed a small unit of Australian Defence Force personnel had been sent to Baghdad to bolster security at the embassy, where a skeleton staff of diplomats remains.

The situation in Iraq has deteriorated significantly since jihadists from the Islamic State of Iraq and the Levant (ISIL) routed government forces from two major cities a week ago.Up to 100 Australians are believed to have left the country to fight alongside jihadists in Iraq and Syria - including with ISIL - and some have been accused of committing atrocities.In his strongest warning yet, Mr Abbott vowed that "murderous potential terrorists" trying to return to Australia would be locked up to protect the community."These people should have no place in our country, and we will do our best to keep them out," he told reporters in Sydney on Friday."If they can't be kept out, they will be taken into detention because we are not going to allow people who are an obvious threat to our safety and security to roam loose in Australia."Australia has not received calls for assistance from the United States or other parties, but Mr Abbott said if any such request was made, it would be taken seriously.For now the safety of Australia's remaining diplomatic personnel in Baghdad remained a top priority, as ISIL - also known as ISIS - militants continue their push south towards the capital.Australia began withdrawing its officials from the strife-torn country this week, leaving an "essential core" of embassy staff in place.The federal government has warned there is little they can do to assist those Australians in Iraq, estimated at possibly more than 2000.The terrorist group stunned the world last week when it seized the major Iraqi cities of Mosul and Tikrit in a lightning offensive, sending government forces and civilians fleeing for safety.Shadow minister for defence Stephen Conroy said Labor supports the decision to send an ADF liaison unit to Baghdad to provide additional security for Australian embassy officials."Given the unstable security situation in Iraq, this is an appropriate course of action to take," he said in a statement.

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$A at the mercy of two central banks

DOVES are meant to symbolise peace, but the Australian dollar is getting caught in a tug of war between two of them.

IN financial jargon, a dove is a central banker who prefers interest rates to stay low.

Record low interest rates in Australia should be helping Reserve Bank governor Glenn Stevens guide the stubbornly high Australian dollar lower to help the local economy.However his aim is being frustrated by interest rates in the US that are even lower, with Federal Reserve boss Janet Yellen signalling they will remain low for a "considerable time".The Aussie fell to a two-week low of 93.22 US cents on Tuesday after minutes of the RBA's June board meeting showed it wants to keep the cash rate at a record low of 2.5 per cent "for some time yet", and included a downbeat assessment on Australia's economic growth prospects.But the dollar bounced back up through 94 US cents early Thursday morning after Dr Yellen wound up the Fed's two-day policy meeting saying she would keep the federal funds rate steady despite a recent spike in inflation."There were some expectations that they would hint that they were concerned about inflation, but they didn't, and they reiterated they are maintaining their dovish stance," Easy Forex currency dealer Tony Darvall said.Mr Darvall said it was unclear if the Aussie dollar will rise to 94.60 US cents, its highest level this year, or fall towards 92 US cents if commodity prices remain under pressure."You'd think that the RBA at the next meeting would continue with the dovish talk," he said."The June minutes were crafted to try and stop the Aussie from rallying and if we get above 95 US cents it will probably be more explicit about the concern."BK Asset Management managing director Kathy Lien said investors were disappointed by Dr Yellen's policy announcement."When pressed for a definition of `considerable time' she refused to provide any details, saying only that there is no formula for what considerable time means," Ms Lien said."In other words, unlike other central banks that have recently expressed their desire to become more active, the Fed remains comfortable with their current course and has no desire to alter the market's expectations."

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House prices tipped to continue to rise

ONE of the country's largest property developers believes house prices will continue to rise for years to come, with the Sydney market set for a "golden decade".

STOCKLAND chief executive Mark Steinert expects nationwide house prices to rise by four to five per cent on average for the foreseeable future, with Sydney leading the charge.

Despite a sharp rise in house prices in the past 12 months, an undersupply of property and improving confidence meant the growth was set to continue, he said."At the moment it is fair to say there is at least three years of undersupply in every major capital city," Mr Steinert said."Because of this demand-supply fundamental, we anticipate at least four to five per cent compound growth in new house prices for the foreseeable future."Mr Steinert said the NSW government's efforts to increase housing supply and infrastructure plans would boost Sydney's new property market."We are particularly bullish on Sydney," he said."I think it's fair to say that we are going to see Sydney and to a certain extent NSW have a golden decade."Mr Steinert's optimism contrasts with warnings from economists and analysts that house prices are likely to flatten or slide over the next few years.Credit Suisse analyst James Ellis has said a collapse in prices was unlikely, but he expects prices to remain flat for several years, which would amount to a decrease in prices in real terms, relative to incomes."Our base case scenario is one of real erosion of house prices," he said.Recent figures from the bureau of statistics suggest the housing market boom is cooling, with no growth in home loan approvals in April.Meanwhile, house prices suffered their biggest monthly fall in five years in May, dropping 3.6 per cent across capital cities, according to research from RP Data.But prices remain substantially higher than a year ago, especially in Sydney, were prices have risen 16.6 per cent in the past 12 months.

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JB Hi-Fi weathers the retail storm

Entertainment retail chain JB Hi-Fi expects its sales will be up by 5.3% for the year. Source: AAP

JB Hi-Fi is proving more resilient to slumping consumer confidence than other retailers.

THE electronics retailer remains on track to lift annual profit by about 10 per cent, despite winding back its sales expectations since the end of March.

Analysts say JB Hi-Fi is performing better than other retailers as it is not exposed to seasonal factors such as unusually warm weather, and due to its expansion into new product areas.The company said on Thursday it expects a 5.3 per cent rise in annual sales for 2013/14, weaker than its previous forecast of six to eight per cent growth.But it is sticking to its previous forecast of a $126-$129 million net profit for the year, a rise of between 8.3 and 10.8 per cent.That is in contrast to several other major retailers, who in recent weeks have warned of a sales slump amid consumer worries about spending cuts announced in May's federal budget.Shares in JB Hi-Fi soared in early trade, but fell back during afternoon trade, and closed 22 cents higher, up 1.2 per cent, at $18.95.CBA retail analyst Andrew McLennan said JB Hi-Fi was performing well during a period of disastrous consumer sentiment, continuing with store expansions and branching out into new categories such as coffee machines and other household appliances."For them to have held to a positive sales growth number in the fourth quarter is actually a good outcome," Mr McLennan said."More recently JB Hi-Fi have expanded into their JB Home category of household electronics products, including whitegoods and small appliances, and that appears to be enhancing their underlying sales growth off a relatively small base."This strategy had differentiated JB Hi-Fi from some of its competitors as CD and DVD sales continued to slide, Mr McLennan said.JB Hi-Fi was also not as exposed to seasonal factors as apparel retailers, who were experiencing difficult sales conditions due to warm weather in the lead-up to winter, he said.Meanwhile, JB Hi-Fi chief executive Terry Smart has confirmed he will retire on June 30.Mr Smart announced his plans to step down in April, and will hand over the reins to chief financial officer Richard Murray.

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Vic Nats upset by Liberal bid for Euroa

THE Liberals' decision to run against the Nationals in the Victorian seat of Euroa is "most unfortunate", state Nationals leader Peter Ryan says.

THE Nationals asked the Liberal Party not to field a candidate in the new seat, created after a redrawing of the Benalla electorate being vacated by retiring Nationals MP Bill Sykes, Mr Ryan said.

"The Liberal Party has apparently chosen to stand, although they have not spoken formally to me about it. We think that is a most unfortunate decision," Mr Ryan told reporters in Ballarat on Wednesday.The deputy premier said the Nationals believe the Liberal move is a breach of their coalition agreement."The very basis and foundation for having a coalition agreement is to ensure we don't see this sort of waste of resources occur," he said."We saw this all happen in the recent federal election in the seat of Mallee and here we go again."The Liberals ran a candidate in Mallee at last year's federal election, which was being vacated by National John Forrest.The Nationals' Andrew Broad won the seat.Stephanie Ryan will run as a Nationals candidate for Euroa at the November 29 state election."We are very confident of being able to win the seat," Mr Ryan said."We have not asked the Liberal Party to stand, indeed we have asked the Liberal Party not to stand."Premier Denis Napthine says decisions about running candidates are up to the party's administrative wing, which is in regular contact with the National Party administration."Peter Ryan and I work well professionally, we're also personally good friends. The coalition is a great working team," he told reporters.Dr Napthine said running Liberal and National candidates in the same seat gives voters a choice, but also maximises the Liberal-National vote."With regard to this seat, I think the National Party has selected a very, very good candidate and I'm sure Stephanie Ryan will do very well."

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Newcrest hit with $1.2m fine by ASIC

ASIC has fined Newcrest Mining $1.2 million for breaching continuous disclosure obligations in 2013. Source: AAP

GOLD miner Newcrest Mining has been fined $1.2 million in Australia's largest ever penalty for selectively providing market sensitive information.

NEWCREST, the nation's largest gold miner, admitted withholding the information from the wider investment market for at least a week in 2013.

In a settlement with the Australian Securities and Investments Commission (ASIC), it admitted to two contraventions of continuous disclosure rules, which dictate companies make available any information than can impact its share price.The Federal Court will now decide whether to approve the settlement.It is more than double the country's previous largest disclosure rules penalty of $500,000, and only the fifth such litigation by ASIC in a decade.The Newcrest penalty relates to selective briefings given by the company's then investor relations manager Spencer Cole to analysts from investment banks, alerting them to large cuts in gold production and capital expenditure.That sparked a suspicious raft of broker downgrades of the stock, and a 15 per cent slump in Newcrest's share price in the three days before the market was informed of production and spending cuts.Newcrest also announced on June 7 more than $6 billion in impairments, partly related to its struggling PNG operations at Lihir.ASIC said Newcrest's selective disclosures had generated confusion, speculation, media attention and a loss of confidence in market integrity and the company's shares.Anyone who traded in Newcrest shares between May 28 and June 7 when analysts were informed and the public was not had been materially prejudiced, it said.ASIC acknowledged Newcrest's budgeting process at the time was difficult, with its cash flow under threat in the wake of gold's most dramatic price fall in 30 years.Commercial law expert Ian Ramsay, from the University of Melbourne law school, described the judgment as rare and significant.While Newcrest has not admitted knowingly or intentionally breaching its corporate obligations, it has still admitted liability, he said."What's got ASIC excited is not just the fact that Newcrest is one of the world's biggest mining companies, it is the seriousness of it," Professor Ramsay told AAP."He (Mr Cole) wasn't off on a frolic, it looks as though what he was doing was run past senior management."Newcrest may now also want to settle a shareholder class action related to its announcement of writedowns and the resulting share price falls.Slater & Gordon lawyers, representing Newcrest shareholders, are reviewing the ASIC settlement.Newcrest chairman Peter Hay said the company regretted the contraventions, and pointed out it had since revised and tightened its governance structure.Newcrest shares were up 20 cents to $10.17 at 1530 AEST.

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Carbon policy pits Aus against US: Garnaut

AUSTRALIA is setting itself against the US and will become a drag on global climate change efforts with the repeal of the carbon tax, prominent economist Ross Garnaut says.

THE former government adviser says China, Europe and the US are gearing up for another big effort to address climate change and by scrapping its detailed and sophisticated carbon laws, Australia is going against this.

"With our existing policies, we're not ahead of any game yet but we're part of the game. We will be doing our fair share," Professor Garnaut said on Wednesday."With the repeal of the carbon laws, and in the absence of anything in their place, then we won't be doing our fair share."We will be a drag on the international system."He said the move was particularly puzzling when the world's two big emitters, China and the US, whose inaction had previously been a problem, were committing themselves to very strong action."We have set ourselves against our ally the United States on a major question of policy in a way that we haven't done since the Ottawa conference in 1931," Prof Garnaut said.The comments came at the release of a report by the Committee for Economic Development of Australia (CEDA) into the economic trouble Australia could face without an appropriate response to climate change.The report says Australia faces the risk of growing repair bills from extreme weather and barriers to major project investment.CEDA chief executive Stephen Martin said policy makers need to recognise climate change is an economic issue, not just an environmental issue."Statistics show that the number of catastrophic weather events is increasing and the economic losses associated with these events are also trending up," Prof Martin said.He said Cyclone Yasi, Black Saturday, the Queensland floods and other weather events have had a direct impact on industry and on most Australians' hip pocket.Professor Martin said the federal government needs to introduce a national risk register that includes strategies to manage risks of extreme weather."Australia is reliant on foreign capital to fund major projects and new developments in international climate change policy are likely to impact international capital flow and investment decision making," Prof Martin said.

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Kiwi gains against weak Aussie dollar

THE New Zealand dollar has climbed against its trans-Tasman counterpart after the Reserve Bank of Australia minutes for its last meeting showed an expectation of slower growth as the country's mining boom winds down.

THE kiwi climbed as high as 92.54 Australian cents shortly after the release of the central bank's minutes and was trading at 92.48 cents at 5pm in Wellington, up from 92.25 at 8am and 92.31 cents at 5pm on Monday.

The kiwi fell to 86.58 US cents at 5pm, from 86.78 cents at 8am and 86.85 cents on Monday."The RBA released its minutes this afternoon. They didn't say much different about the currency, but there were some hints that they were slightly less positive on the economy," said Raiko Shareef, a currency strategist at Bank of New Zealand."The kiwi/Aussie has had a bit of a move, and that's largely driven off the weakness of the Aussie dollar."In contrast, the Reserve Bank of New Zealand is hiking interest rates to curb inflationary pressures, while Thursday's gross domestic product figures are expected to show the economy growing at a 3.1 annual pace in the first quarter."From a global investors perspective New Zealand has pretty good appeal from the interest rate side and also combined with the fact the New Zealand dollar currency volatility is at an all time low," Mr Shareef said.The kiwi slipped to 63.84 euro cents from 64.12 cents on Monday and to 88.26 yen from 88.34.The trade-weighted index fell to 80.70 from 80.85.

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