Retail sales grow by 1.2% in January, Tatts buys NSW Lotteries: Economy Roundup

Retail sales grew by a seasonally adjusted 1.2% in January following a surprising decrease of 0.9% in December, according to the latest figures from the Australian Bureau of Statistics.

The figures that in trend terms, all industry groups recorded increases during January with the largest rise in the cafes, restaurants and takeaway food services industry of 0.7%.

Department store sales grew by 0.4%, clothing, footwear and personal accessory retailing by 0.4%, household good retailing by 0.3%, food retailing by 0.3% and other retailing by 0.3%.

Western Australia recorded the highest increase in trend terms of 0.7%, followed by New South Wales at 0.6%, Australian Capital Territory at 0.5%, South Australia by 0.3%, Victoria by 0.3%, Northern Territory by 0.2%, while Tasmania decreased by 0.2%. Queensland sales remained flat.

Meanwhile, the total number of dwelling units approved during January fell by a seasonally adjusted 7% to 14,045, according to the latest figures from the ABS.

The seasonally adjusted estimate for private sector houses approved grew by 0.3%, following two months of rises. Private sector dwelling approvals dropped by a massive 29.1%, while the value of total buildings approved fell by 24.6%.

In a move that could question the viability of the Government’s National Broadband Network, Telstra has come out in force against the draft legislation for the framework of the NBN Co., saying it could create just another retail business.

“Such an outcome would run counter to the core purpose of the NBN and the Government’s primary policy objective of restructuring the industry to have separate providers for retail and wholesale fixed network services,” Telstra chairman Catherine Livingstone and chief executive David Thodey said in the letter.

“We are very concerned about this potential change in the Government’s position… If enacted, we would need to factor this into the financial consideration required to achieve an agreement that is in the company’s and your best interests.”

Many in the telco industry have attacked the Government’s draft legislation, saying it goes back on a promise to keep the NBN Co. as a wholesale-only company. Some provisions in the bill have led analysts to believe the company could potentially act as a retailer.

“If enacted, we would need to factor this into the financial consideration required to achieve an agreement that is in the company’s and your best interests,” Telstra said.

Shares rise ahead of RBA meeting

The Australian sharemarket has opened higher today ahead of the Reserve Bank of Australia’s meeting where economists widely expect the board to increase the official interest rate by 0.25%.

The benchmark S&P/ASX200 index was up 0.7 points or 0.02% to 4687.3at 12.10 AEST, while the Australian dollar also increased to US90c ahead of the RBA’s meeting.

NAB shares fell 0.7% to $25.44, while Westpac shares gained 0.4% to $26.63. Commonwealth Bank shares gained 0.6% to $54.75, as ANZ rose 0.6% to $23.73.

The New South Wales government has sold to Tatts Group its lottery business for $850 million, with treasurer Eric Roozendaal saying the deal will create proceeds of over $1 billion.

“That means total proceeds of the sale of NSW Lotteries for NSW taxpayers of more than $1 billion – money that will go straight back into funding frontline services for the families of NSW like teachers, police and nurses, and strengthening the state’s balance sheet.”

Virgin Blue Holdings has appointed former Qantas chief executive John Borghetti as the company’s new chief executive and managing director.

“We are delighted to have John join us. He is a highly regarded executive with deep aviation experience and insights; proven strategic capabilities and; strong marketing credentials,” Virgin chairman Neil Chatfield said.

“Today, Virgin Blue has a credible market position with a solid balance sheet and has the scale and momentum for further growth, despite the enormous challenges faced by the industry in recent years.”

“The company is in good shape and is exceptionally well-placed to build on its strengths and embrace revenue growth opportunities ahead,” Borghetti said.

Macquarie Group appoints Savoret in new role

Macquarie Group has now appointed former Lehman Brothers chief operating officer for Europe, Benoit Savoret, as its new head of Europe, Middle East and Africa.

“Benoit brings substantial management and leadership experience across equities, fixed income, investment banking and asset management activities,” chief executive Nicholas Moore said in a statement.

“His appointment adds significant depth to our EMEA management team and to our client offering as we grow our businesses throughout the region.”

In the mining sector, Rio Tinto has said it has completed the sale of its Alcan Packaging Food Americas division to Bernis Company.

The company said the finalisation of the sale had boosted its balance sheet, and that its divestment program has now passed $US10 billion.

“Our balance sheet has been transformed in the past 12 months on the back of the divestment programme, the rights issues and continued strong operating cash flows,” chief financial officer Guy Elliott said.

Overseas, US stocks rose due to ongoing optimism regarding the sale of one of AIG’s major Asian units. The Dow Jones Industrial Average grew 78 points or 0.76% to 10,403.79.