ACCC delays AXA, NAB deal decision: Economy Roundup

The Australian Competition and Consumer Commission has delayed its decision on two proposed bids for AXA Asia Pacific Holdings by National Australia Bank.

The corporate regulator has said it has pushed back the offer from AMP to April 1, while any decision on NAB’s bid will not be announced until April 22.

The ACCC said on its website it has delayed the decisions in order to “consider further information requested from the merger parties”. It is now the second time the decision timetable has been pushed back.

Last month the ACCC said NAB’s $13.3 billion bid raised a higher level concern than AMP’s offer.

Meanwhile, the Australian sharemarket has opened higher today after Wall Street stocks reached a 17-month due to new data showing unemployment is improving

The benchmark S&P/ASX200 index was up 11 points or 0.24% to 4825.8 at 11.45 AEST, while the Australian dollar remained around the US91c mark.

ANZ shares gained 0.6% to $26.90, while Commonwealth Bank shares rose 0.4% to $56.04. NAB lifted 0.6% to $26.90 as Westpac rose 0.5% to $27.14.

Overseas, Wall Street has reacted positively to news the number of US workers filing new claims for unemployment benefits fell by 6,000 to 462,000. While the data from the Labour Department was below market expectations, an improvement in the trade deficit helped lift markets.

The Dow Jones Industrial Average gained 44.51 points, or 0.42% to 10,611.84, while the S&P 500 index gained 4.63 points or 0.40% to 1150,24.

Also in the US, president Barack Obama has said at the Export-Import Bank’s annual conference in Washington DC that the Asia-Pacific region, including Australia, “will be fundamental to America’s ability to create jobs and to thrive in the 21st century”.

“While I’m there, I’ll visit Indonesia and Australia, two vibrant economies and democracies that will be critical partners for the United States,” he said. “And in both countries, I’ll highlight the role that American businesses play there and underscore how strong economic partnerships can create jobs on both sides of the Pacific while advancing both regional and global prosperity.”

Obama is set to address a joint sitting of parliament on Tuesday, March 23 during his trip.

Lehman Brothers operated while insolvent

In New York, a court-appointed examiner has found Lehman Brothers Holdings had been insolvent for some weeks before filing for bankruptcy in September 2008.

In a 2,200-page report, Anton Valukas, chairman of the law firm Jenner & Block, has found that while some of the bank’s decisions “can be questioned in retrospect”, those in charge were not responsible for the company’s collapse.

However, he also identified a practice within the company used to alter its books to give the impression it was reducing leverage in 2008, when in reality it was doing nothing of the sort.

Back home, shares in miner CBH Resources have entered a trading halt after the company has received a takeover proposal.

In a statement, the company said it has received “a proposal from a party which may lead to a change of control transaction”. The company is expected to resume normal trading ahead of the opening on March 16.

Meanwhile, Nomura Australia has said it plans to double the number of finance professionals on staff in Australia this year.

“With Lehman, we finally had local (trading) capabilities on the ground. Then our ambition changed,” Nomura Australia’s chief executive officer Hiroyuki Nishikawa told Reuters. Currently it has nearly 80 professionals.

“Within six to 12 months, we will definitely provide research capabilities and trading capabilities to onshore (equity) clients,” Nishikawa added. “The bottom line is corporate clients feel very comfortable just to deal with local guys.”

Cape Lambert enters conditional sale agreement

Also in the mining industry, explorer group Cape Lambert Resources has entered a conditional sale agreement with investment company China Sci-Tech Holdings.

CST has already paid a $5 million cash deposit, and will pay another $125 million once the sale is complete. The remaining $5 million will be paid in two tranches.

“In the end we felt a trade sale was the best outcome for shareholders and stakeholders given capital markets remain choppy, and may continue to do so for the medium run,” executive chairman Tony Sage said in a statement.

“China Sci-Tech has a very clear focus and complementary financial capacity to return Lady Annie to production in the short-term and we believe this is in the best interests of the various stakeholders associated with the project.”