Monthly archive for ‘ April, 2019 ’

Unemployment to hit four-year high

11th April 2019 | Closed

The jobless rate is expected to have hit a four-year high in July as the rate of hiring in the mining sector slows.


The Australian Bureau of Statistics (ABS) will release its monthly labour force figures on Thursday morning.

The median forecast from an AAP survey of 11 economists is for the unemployment rate to rise to 5.8 per cent, from 5.7 per cent in June.

Australia has not had an unemployment rate of 5.8 per cent since August 2009.

The number of people with jobs is expected to have risen by 10,000 in July, compared to a gain of 10,300 in June.

JP Morgan Australia chief economist Stephen Walters said employment growth is not keeping up with population growth and the expansion of the workforce.

“We forecast a 15,000 net gain in aggregate employment for last month, but a larger expansion of the labour force,” MR Walters said.

“The jobless rate, then, has to rise.”

Mr Walters said the non-mining sectors of the economy had not been contributing to employment growth.

“Firms have been trimming workers’ hours, while achieving modest employment growth, much as they did in the period of subdued growth four years ago,” he said.

“The fact that activity in the non-mining economy remains subdued, though, it means firms probably at some point also have to curb hiring further.”

Mr Walters said he expects the unemployment rate to climb to six per cent by the end of the year.

The expected rise in the unemployment rate is backed up by the ANZ job ads survey, released on Tuesday.

The number of employment advertisements fell for the fifth consecutive month, down 1.1 per cent in July, seasonally adjusted.

Job ads were 18.6 per cent lower than at the same time a year ago.

ANZ chief economist Ivan Colhoun said employment growth in Australia was slowing as mining investment weakened and the rest of the economy failed to pick up the slack.

“The continuing trend decline in advertising is consistent, unfortunately, with a further modest rise in the unemployment rate over coming months,” he said.

“Job advertising in Western Australia is now nearly 45 per cent below the levels of a year ago, consistent with weaker demand for labour in the mining sector.”

The participation rate – the percentage of the working-age population either in work or looking for a job – is expected to be unchanged in July at 65.3 per cent.

Oprah bags Swiss store for racism

11th April 2019 | Closed

A Swiss boutique has denied any wrongdoing after US chat show queen Oprah Winfrey claimed she had been the subject of racism when a shop assistant allegedly refused to show her an expensive handbag.


Swiss luxury chain Trois Pommes says its saleswoman tried to encourage Winfrey to buy a cheaper bag out of kindness, not racism.

Winfrey, one of the richest women in the world, said she had been in Zurich for US singer Tina Turner’s wedding in July and had spotted a swanky crocodile handbag while out shopping.

“I’m in a store, a name-brand store. I’m by myself, absolutely nobody else with me. And I say to the woman, ‘I would like to see that bag on the shelf’,” Winfrey told fellow US talk show host Larry King on internet channel

“And she says, ‘No, that one’s too expensive. I’ll show you this one’,” said Winfrey.

She did not directly describe the incident as racist, but recounted it after telling King of a “racist moment” in New York years ago when she and her hairdresser were refused entry to a luxury store which had been robbed by two black people.

Trudie Goetz, head of the Swiss luxury chain Trois Pommes, denied her saleswoman had ever sought to stop Winfrey buying the bag.

“Everyone wants to sell a crocodile bag,” Goetz told AFP.

“It’s a misunderstanding,” she said, adding that the saleswoman always put the customer first and tried to be “too kind”.

“She explained how beautiful the bag was, then she said, ‘Honestly this bag costs 35,000 Swiss francs, but I can show you other versions in ostrich, in pure leather and in velour’,” Goetz said.

That sum is worth $US38,000 ($A41,970) – small change for Winfrey, whose wealth is estimated at $US2.8 billion by Forbes magazine.

On its Twitter feed, Switzerland Tourism apologised and said the saleswoman had behaved inappropriately.

Winfrey joked that she had been tempted to buy up the entire store, recalling a scene in the movie Pretty Woman where Julia Roberts’ prostitute character has the last laugh in a snobbish shop.

“I wanted to create a Pretty Woman moment and come back and buy everything and say, ‘Big mistake!’. But then I thought she’d get a commission, so let’s not do that,” she told King.

Goetz said no disciplinary action was planned against the saleswoman.

“She’s a great person. She’s highly qualified. She also works in the shop in St Moritz and she takes care of prestigious clients,” she said.

Trois Pommes was still considering how to respond to the claims, and would take legal advice, she added.

Winfrey, 59, was last month named the most powerful celebrity in the world by Forbes.

Why BHP’s Potash bid breathes life into the market.

11th April 2019 | Closed

Make no doubt about it… BHP wants Canada’s Potash Corp.


So much so, the company’s going straight to shareholders in a hostile takeover worth $43 billion, or $US130 per share. That’s because the Potash board rejected a proposal put to its board.

Success would see BHP become the largest fertiliser supplier in the world, at a time when fertiliser prices have recovered following a slump during the global financial crisis.

Right now, analysts are mulling the fine print to work out whether this is a good deal for BHP shareholders, and if it’s an indication the BHP/Rio Tinto Pilbara iron ore joint venture will now not go ahead.

The immediate consensus is that BHP would have to raise its offer price, given shares in Potash jumped to $143 per share, 10 per cent above the bid.

This deal though, may be a major turning point for the share market. As Ben Potter from IG Markets points out, many market watchers were looking for a catalyst to drive the market, and this deal could provoke other mergers and acquisitions. Why? Because many corporations are sitting on large amounts of cash, earning very little return.

The global financial crisis has reduced investor and corporate confidence, and thus risk, so many have been leaving their cash in banks earning very little. But as share prices eroded, certainly some value must be kicking in.

Charlie Aitken at Southern Cross Equities believes we’ll see a raft of M&A activity as a result, so he’s continuing to set portfolios for rises in commodity prices and positioning for growth. Aitken thinks the best value on the share market, remains in growth stocks. He notes obvious takeover targets like Macarthur Coal, Alumina, Fortescue Metals, Riversdale, Equinox Minerals, Whitehaven Coal, ERA and Western Areas, and that they’d be the ones he would be adding to a portfolio first, not just for takeover potential, but because he believes this is where the cheap growth in the market is.

There’s been a number of takeover approaches already this year, the most recent being Intoll Group, Centennial Coal and AWB… how many more will we see this year?

Watch this space!

Of course before making any financial or investment decisions, speak with your financial planner to find out what is suitable, for you.

Record low rates a boon for borrowers

11th April 2019 | Closed

Australia’s central bank has cut the cash rate to a new record low, which it hopes will stimulate a sluggish economy.


Some economists believe further cuts are possible, though not in the next few months.

The RBA’s 25 basis point cash rate cut to 2.5 per cent was quickly passed on by National Australia Bank and Commonwealth Bank, while Westpac will cut by 28 basis points.

The RBA cited below average growth and moderating commodity prices for its widely-expected cut.

In a statement accompanying the decision, RBA governor Glenn Stevens said growth was still below trend.

“This is expected to continue in the near term as the economy adjusts to lower levels of mining investment. The unemployment rate has edged higher,” he said.

But Mr Stevens said there was a “reasonable prospect” of growth picking up in 2014.

He also noted that the Australian dollar has fallen 15 per cent since April, but said it was still quite high.

“It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy,” he said.

JP Morgan chief economist Stephen Walters said the RBA statement was unexpectedly bland, with little clue as to what triggered the cut or whether more cuts were on the cards.

“The statement announcing today’s decision was minimalist, bordering on terse,” Mr Walters said.

“It does not betray clear reasons for the move, instead laying out a somewhat familiar snap-shot of where things are at.

“The policy guidance at the end is unexpectedly bland, with the recently favoured `scope to ease policy’ reference made only in the past tense.”

ANZ chief economist Ivan Colhoun said he would be surprised if this was the last cash rate cut.

“The indicators that tell you it’s the last one, such as job ads, such as unemployment, they’re still heading in the wrong direction,” he said.

CommSec chief economist Craig James said the RBA wanted to wait before acting again.

“It is our belief that the economy will pick up after the election. The Reserve Bank is also waiting to see what happens post-election,” he said.

“Low interest rates, combined with a weaker Aussie dollar, are acting to support growth in the economy.

“But it all gets down to confidence. We wouldn’t expect the economy to lift markedly until the federal election has been run and won.”

Real Madrid are united now, says Ancelotti

11th April 2019 | Closed

The Italian makes his league debut at the helm when Real Betis visit the Bernabeu and he does so with the fans, the local media and the players all seemingly singing from the same hymn sheet.


“In a season it is normal to have problems, but when a team is united they are resolved quickly,” Ancelotti told a news conference on Saturday.

“For now, the team is united and I hope it continues this way.”

The 54-year-old also stressed the team’s style of play would be different to that practiced by his predecessor.

“The idea isn’t to play on the counter-attack,” he said. “The idea is to play football, to have a good control of the ball, and possession.

“My experience with AC Milan, Chelsea and Paris St Germain was the same. I wanted to play attacking football because that is what the club asked for. Here, it is no different.”

Real have already signed a right back and three midfielders to strengthen their squad for the new campaign, but there is one name that continues to grab the headlines, Gareth Bale.

There are two weeks to go until the end of the transfer window with Real president Florentino Perez seemingly intent on securing the Tottenham Hotspur winger, with talk of a world record bid of around 100 million euros (85.29 million pounds).

Asked about the negotiations, Ancelotti was evasive.

“Great players make a team better,” he said as he went on to refute that the club not having assigned the shirt number 11, the same Bale wears at Spurs, was for any particular reason.

“It isn’t reserved for Bale,” he said. “It is only that no one has claimed it in the squad.

“The squad in principle is complete. We only need to evaluate the position of (Portugal defender) Fabio Coentrao, because he has asked to leave. He has been left out of the squad to play Betis.

“I am very pleased with this group because they have good balance between youth and experience.”

Ancelotti approaches his debut with three important players struggling to come back from injuries.

Spain midfielder Xabi Alonso had surgery on a nagging groin problem in June, France defender Raphael Varane knee surgery in May and new signing Asier Illarramendi has only managed one training session before succumbing to a muscle problem.

“Xabi isn’t ready to play,” Ancelotti said. “He is close to reappearing and perhaps he will in the friendly next Thursday.

“Illarramendi is working alone to be ready in about 10 days time. Varane is working alone to strengthen his leg to avoid problems with the knee. In a week he will be working with the group again.”

($1 = 0.7500 euros)

(Reporting by Mark Elkington, editing by Rex Gowar)