BP tipped to remove CEO, Shares move higher: Economy roundup

Oil giant BP is set to drop chief executive Tony Hayward in favour of executive Robert Dudley, in an attempt to overhaul the clean-up operation in the Gulf of Mexico and mend ties with the US government.

According to a report in the Wall Street Journal, the BP board met yesterday and created a plan for Dudley to take over Hayward’s role. The company is not expected to make an official statement on the matter until later tonight.

However, it is also understood Hayward will be nominated for a role as non-executive director for TNK-BP, the company’s Russian venture.

Investors hope Dudley will be able to take some heat away from the company. It has suffered massive criticism in the US due to its handling of the Gulf of Mexico spill, and Dudley is understood to be adopting a new approach.

Meanwhile, Insurance Australian Group shares have fallen over 5% this morning to $3.23 after the company announced it expects a drop in annual profit for the financial year.

The company also announced it has made changes to executive team, but expects a better performance in the 2011 financial year.

IAG said annual profit to 30 June will be $91 million, dropping from $181 million during the 2009 financial year. The announcement comes just hours after QBE made a similar statement, saying it would cut its earnings forecast due to lower than expected interest rates.

IAG said it will announce an insurance profit of $493 million for the year, down from the $515 million recorded during 2009. A final dividend of 4.5 cents is also expected.

However, Australand has recorded solid results with half-year net profit up 127% to $72.2 million, with revenue of $281.5 million.

The company also said it is in position to achieve its full-year earnings guidance.

“The fundamentals for the residential, commercial and industrial sectors remain positive, and the group is well positioned to achieve its 2010 earnings guidance and deliver growth in 2011,” Australand said in a statement.

Shares rise after strong Wall Street leads

The Australian share market opened higher today, driven by a boost on Wall Street overnight where increased home sales gave investors more confidence regarding the economy’s recovery.

The benchmark S&P/ASX200 index was up 26 points or 0.59% to 4512.6 at 11.30 AEST, while the Australian dollar was up at US90c, due to strong performance in equities markets overnight.

ANZ shares gained 1.2% to $23.01, while Commonwealth Bank shares gained 1.2% to $52.11. Westpac rose 1.8% to $23.57 as AMP gained 0.7% to $5.45.

Meanwhile, telecommunications giant Telstra has announced the appointment of Nora Scheinkestel as a non-executive director.

“Dr Scheinkestel has significant expertise in the financial sector, as well as broad experience as a director of large Australian companies operating in increasingly competitive markets,” chair person Catherine Livingstone said in a statement,

As reported by The Australian, ANZ will bid for Lone Star Funds’ multibillion-dollar stake in theKorea Exchange Bank. The publication also says ANZ will make a late offer for 51% of the company, valued at $3.86 billion.

German regulators deny banks criticism

German financial regulators have shrugged off criticism that the country’s banks failed to detail their sovereign risk exposures as part of the widespread stress tests.

Seven banks did not push their sovereign debt exposure, and six of them were German – although some of these banks have now said they will offer their data.

“CEBS has strongly encouraged the participating banks and their supervisory authorities to disclose detailed information on their exposures to EU sovereign debt,” the Committee of European Banking Supervisors said in a statement. “The disclosure of this information is considered as an essential part of the exercise.”

In the United States, investors were given a confidence boost after positive home sales data was released. The Dow Jones Industrial Average gained 100.81 points or 0.97% to 10,525.43.