ACCC looks to limit supermarkets’ dominance: Midday roundup

The Australian Competition and Consumer Commission is paying “increased” attention to the major supermarket chains’ acquisitions of smaller retailers.

Chairman Rod Sims says the watchdog is keeping an eye on Coles and Woolworths’ moves to increase their participation in the liquor, grocery and home improvement sectors, particularly through many small acquisitions.

“The ACCC is concerned to ensure that further acquisitions do not ultimately lead to retail or indeed wholesale industry structures that may adversely affect the competitiveness of these markets or reduce choice for consumers,” Sims said in a statement yesterday.

“Because of these concerns, the ACCC has been paying increased attention to incremental acquisitions to identify which acquisitions require review and, of those, which raise competition concerns.”

Australian dollar moves above parity

The Australian dollar has moved above parity on speculation the US central bank could bring in quantitative easing to boost growth.

This morning the Australian dollar was trading at US100.14 cents, up from 99.48 cents on Thursday.

Stock market opens slightly higher

The Australian stock market opened higher following Wall Street’s positive performance overnight but world markets are “treading water” in the lead up to the Greek elections on the weekend.

At the official market opening, the benchmark S&P/ASX 200 index rose 0.41% to 4,059.1 points, while the broader All Ordinaries Index inched up 0.41% to 4,106.7 points.

In a research note this morning, ANZ described the world’s stock markets as “treading water” in early trade overnight in the lead up to the Greek election on Sunday.

European equities were mixed with the Euro Stoxx 50 up 0.6% while the German DAX declined 0.2%.

In European bond markets, German bunds held steady and Italian, Greek and Portuguese yields fell.

Echo forecasts lower full-year profit

Echo Entertainment Group has said in a statement to the ASX that full-year profit will fall, while the company has also confirmed a capital raising.

The group now expects earnings of between $270 million and $315 million for the year to June 30, down from last year’s earnings of $347 million.

“Trading conditions have remained difficult in (the second half of financial year 2012) with revenues negatively affected by soft consumer sentiment,” Echo said in a statement.

A new capital raising also announced will help the company’s debt, according to managing director and chief executive Larry Mullin.

“The entitlement offer announced today will reduce gearing, help ensure a more appropriate capital structure and maintain financial flexibility for the company,” he said.

Costello audit recommends asset sales

An audit of the Queensland economy conducted by former federal treasurer Peter Costello has recommended more asset sales to restore the state’s economy.

The commission blames a lack of fiscal discipline in previous governments for the current situation, with debt expected to be $64 billion in 2011-12.

The first step of a recommended process is to grow a surplus by 2014-15, while the second step will be to reduce debt in order to restore the state’s credit rating.

The commission recommends reducing the state’s debt to revenue ratio from 130% to as low as 60% by 2017-18.