Retail sales fall 1.4% in February, New stock exchange gets initial approval: Economy Roundup

Retail turnover decreased by a seasonally adjusted 1.4% in February to $19.8 billion, according to the latest figures from the Australian Bureau of Statistics.

The latest figures reveal that cafes, restaurants and takeaway food services recorded the highest increase in turnover at 4%, with other retailing, department stores and household good retailing increasing by 0.4%, 0.2% and 0.1% respectively.

Food retailing, along with clothing, footwear and personal accessory retailing, decreased by 0.1%. The highest increase was recorded in Western Australia at 0.6%, followed by the Northern Territory at 0.4%, the Australian Capital Territory at 0.3%, Victoria at 0.2% and South Australia at 0.1%.

New South Wales, Queensland Tasmania all recorded a decrease of 0.1% during February.

Also released by the ABS today, new figures reveal the seasonally adjusted estimate for total dwelling units approved fell by 3.3% – a second consecutive fall.

The estimate for private sector housing approvals fell by 0.9%, with the estimate for private sector dwelling categorised as “other” fell by 10.9%. The estimate for the value of total building approvals fell by 4.5% in February, with the value of new residential building approvals increasing 0.5%, along with the value of approved alterations and additions increasing by 6.2%.

The Federal Government has announced its approval of a new licensee to trade shares in Australia, saying it will open up the country as a hub for financial services and markets.

Financial services minister Chris Bowen has said the Australian Securities and Investments Commission has advised the Government that Chi-X Australia is “well on its way” to fulfilling legislative requirements.

“I look forward to assessing Chi-X’s final application once it has met all of the necessary requirements,” Bowen said in a statement.

“I know today’s announcement will be disappointing to some, but it’s the right decision,” he also told reporters at a conference. “It’s the right decision to promote Australia as a financial service centre.”

Bowen also took the opportunity to reference the transfer of supervision powers to ASIC, saying that the process was advanced on set to be completed in the third quarter of 2010.

Having Chi-X enter the market would cut costs of share trading, proponents have said. The exchange is one of a few rivals to the ASX, but would be mainly concerned with wholesale trades, or “crossings”.

Meanwhile, NAB has agreed to binding terms with takeover target AXA Asia Pacific’s French parent AXA SA, to purchase the company for $4.6 billion.

Under the terms, AXA SA will purchase the Asian businesses of AXA APH for $9.4 billion, with terms to have some debts repaid. “NAB will therefore acquire AXA APH A&NZ without debt,” the bank said in a statement.

However, the deal still requires regulatory approval and the Australian Competition and Consumer Commission is taking its time. Yesterday the watchdog said in a statement it has delayed its decision on the deal once again, still weighing up the consequences of the deal.

Macarthur Coal has entered a pre-open trading halt pending an announcement by the company regarding an approach by an outside party for a controlling stake.

The company, valued at $3.1 billion, is currently being advised by JP Morgan, sources have told Reuters. An announcement is expected within the next two days.

Shares flat despite Wall Street lead

The Australian sharemarket has opened flat today, despite good results on Wall Street where stocks rose due to a sharp rise in tech giant Apple’s shares.

The benchmark S&P/ASX200 index was down 12 points or 0.26% to 4904 at 11.50 AEST, while the Australian dollar opened slightly lower to US91c following a disappointing bond sale in Greece.

NAB shares gained 0.5% to $27.83, while Commonwealth Bank shares lost 0.3% to $56.58. AMP fell 0.6% to $6.34, as Westpac managed to gain 0.1% to $28.15.

As reported by the Australian Financial Review, Australia’s major banks are now expected to post a combined profit for the first half of the current financial year of about $10.4 billion.

Three of the banks are expected to report profits of over $7.4 billion, following Commonwealth Bank’s report of a $2.9 billion profit. Westpac, ANZ and NAB are set to release their reports in late April or early May.

In the mining industry, Fortescue Metals Group has said it remains “very confident” about operating in China, despite the recent outcome of the Stern Hu case which saw four former Rio Tinto executives sentenced to years in prison for stealing secrets and accepting bribes.

“We’re very confident about China,” a spokesman told AAP. “Stern Hu, iron ore pricing… there’s no change in Fortescue’s positive perspective in terms of how it views China.”

“The appetite for resources is non-stop,” he said, adding that businesses would not run into trouble, “if you’ve got integrity and are doing things the right way”.

Meanwhile, Tinto has apparently enlisted the assistance of former US secretary of state Henry Kissinger in order to help rebuild its relationship with China, the SMH has reported.

Kissinger has reportedly assisted in securing a meeting on Rio Tinto’s behalf with Politburo member and former banker Wang Qishan, who often acts as an international representative for China.

IMF downgrades German GDP forecast

Overseas, the International Monetary Fund has announced a downgrade in Germany’s GDP growth this year to just 1.2%, saying economy recovery is likely to be moderate and reflective of a reliance on export demand.

“Simultaneous measures to increase labour market flexibility and reduce obstacles to product and service market development would enhance efficiency and foster domestic demand,” the IMF said.

In the United States, stocks have continued to rise following solid economic data and a hive of investment activity surrounding Apple, after the Wall Street Journal posted a report.

US consumer confidence managed to rebound in March, according to industry group the Conference Board, with its index reaching 52.5, up from 46.4. Home prices also rose for an eight consecutive month, according to a popular housing index. The Dow Jones Industrial Average closed up 11.56 points, or 0.11%, to end at 10,907.42.