Fairfax Media names new directors, Trade surplus falls: Economy Roundup

Fairfax Media has now named former Austereo chief executive Michael Anderson, and former Fairfax executive Gregory Hywood, as the company’s two new directors.

“The addition of Michael’s and Greg’s skills and experience to the board is a very good complement to our existing board,” Fairfax chairman Roger Corbett said in a statement.

“I believe the newly constituted board is a great combination to guide the company into its future in the exciting and challenging world of new media.”

Meanwhile, Australia recorded a trade surplus of $1.9 billion during July, according to the latest figures released by the Australian Bureau of Statistics.

The figures show the balance on goods and services totalled $1.88 billion during July, down from the revised surplus during June of $3.44 billion. Experts fell 4% to $25.4 billion, with imports rising 2% to $23.51 billion.

A Reuters poll revealed economists expected a median surplus of $3.1 billion.

In other corporate news, Foster’s chief financial officer Angus McKay has resigned from his position to take up a new role with Asciano, following six years of service.

In a statement, the company said he will leave Foster’s before the end of the year, with Asciano managing director and chief executive Mark Rowsthorn saying the announcement comes after a drawn-out searching process.

“We look forward to McKay joining Asciano and believe that he will bring the necessary skill set to deliver Asciano’s strategic objectives and our significant growth opportunities,” Rowsthorn said in a statement.

“As finance director for our Australian beer and wine business and later, group chief financial officer, Angus has played an important role over last six years and we wish him success in his new position,” chief executive Ian Johnston said.

In the mining sector, The Australian has reported Santos plans to raise up to $US2 billion in a rights issue to fund the Curtis Island liquefied natural gas project. The publication reports the company, along with JPMorgan would launch the issue after completing equity-stake sales with Korea Gas Corp and Chinese Sinopec Corp.

Shares higher after Wall Street rally

The Australian sharemarket has opened higher today following a solid night on Wall Street where stocks rose to their highest point in eight weeks.

The benchmark S&P/ASX200 index was up 33 points or 0.74% to 4529 at 12.30 AEST, while the Australian dollar rose above US91c following the release of solid economic data overseas.

Westpac shares rose 1.1% to $22.59, with Commonwealth Bank shares also up 1% to $51.82. ANZ rose 1.3% to $23.43 while NAB gained 1.6% to $24.22.

New figures from the Veda Advantage commercial credit demand index show credit demand in the small business sector fell during June by 21%.

Head of commercial risk products Hamish Osborn said in a statement credit growth was tracking higher in 2009-10 that it had in 2008-09, although stimulus activity would have artificially inflated that data.

“Based on this we can expect a drop off in year-on-year demand, although we did not predict the large drop off in June,” he said.

Rio Tinto has opened the $US1.5 billion Brockman 4 iron ore mine in the Western Australia Pilbara region.

“The initial output from Brockman 4 fits within our 220 million tonnes per annum capacity, demonstrating our ability to add high value sustaining tonnage, on time and within budget, as we prepare for our next major phase of expansion,” chief executive Sam Walsh said.

IMF warns on debt pessimism

The International Monetary Fund has said investors are overestimated the risk of default in some economies, saying countries are able to adjust to high levels of debt as they have in the past.

“Although the fiscal fundamentals look challenging, current market indicators of default risk seem to reflect some market overreaction,” the IMF said in a statement.

“Admittedly, this will be the first time that most advanced economies have to adjust simultaneously by such large amounts, implying a non-trivial drag on economic growth….Judging from past experience, such a major adjustment will no doubt be difficult, but is possible.”

Meanwhile, stocks on Wall Street reached an eight-week high following solid economic data released domestically and in Chian regarding factory outputs. The Dow Jones Industrial Average gained 254.74 points or 2.54% to 10,269.47.