Lending finance rises, WorleyParsons profit downgraded: Economy Roundup

Commercial finance commitments increased by a seasonally adjusted 4% in November, with fixed lending commitments up 8.5%, according to new figures from the Australian Bureau of Statistics.

Revolving commercial credit commitments dropped 6.9%, but the value of personal finance commitments increased by a seasonally adjusted 1.1%, with revolving credit commitments up 2.5%. Fixed lending commitments dropped 0.4%.

The total value of owner occupied housing commitments excluding alterations and additions decreased by a seasonally adjusted 2.9%.

The Australian sharemarket has opened lower today after US stocks fell due to fears of a levy to be imposed on banking profits in order for the US Government to recover funds from its $US700 billion bailout package.

The benchmark S&P/ASX200 index was down 30 points or 0.61% to 4869.5 at 12.00 AEST, while the Australian dollar continued its decline to US92c.

Commonwealth Bank shares fell 0.7% to $56.15, while NAB shares also declined 0.4% to $26.84. Westpac lost 0.2% to $25.13, while ANZ fell 0.5% to $22.14.

WorleyParsons downgrades forecasts

Engineering firm WorleyParsons has downgraded its profit guidance for the 2009-10 year, saying decreased demand for its services is to blame.

The company announced net profit after tax was expected to be in the $280-320 million range, down from the previous profit forecast of $320-335 million. The company said its recently announced acquisitions of infrastructure services groups Evans & Peck and CNEC would not contribute a great deal to the second half result.

“The company is encouraged by increasing activity in a number of regions and customer sector groups supporting our view of a more significant weighting of earnings to the second half of the financial year,” WorleyParsons said in a statement to the ASX.

As reported in the Australian Financial Review, the country’s major transport operators are pressuring the Government to ensure revenue raised by a proposed road user charge be spent on upgrading existing infrastructure.

The Henry tax review is expected to recommend the introduction of congestion charges, which the nation’s largest companies are reportedly coveting for upgrades.

Griffin Coal in possible government deal

Also in the AFR, the administrator of collapsed coal miner Griffin Coal is now under pressure to create a deal with the Western Australia Government which could give the company a $4 million lifeline.

Premier Colin Barnett said last week the Government would make a commitment to buying two weeks of coal in advance of delivery, but the final terms of such an agreement have not yet been laid down.

Meanwhile, opposition finance spokesman Barnaby Joyce has hit out against the foreign investment watchdog after Chinese-owned Bright Foods launched a $1.5 billion bid for part of sugar manufacturer CSR’s business yesterday.

“The shareholding of the company then will be the municipality of the people of Shanghai,” he told Fairfax.”When a government has the ownership of an asset they’re not driven by market fundamentals, they’re driven by strategic long-term interest.”

“If it’s only ever going to say yes (to foreign investments) then it’s sort of purposeless,” he said.

In the US, stocks fell due to fears of a levy to be imposed on bank profits by the US Government in order to recoup some of the losses made when it handed out $US700 billion in a financial rescue package in late 2008.

While the story has not yet been confirmed by the White House, the Dow Jones Industrial Average nevertheless dropped 36 points or 0.34% to 10,627.26.