Lending finance rises 6.3% during April: Midday Roundup

Housing finance commitments for owner-occupiers was up by a seasonally adjusted 6.3% to $13.8 billion, according to new figures from the Australian Bureau of Statistics.

However, finance fell by 1.1% in trend terms.

Personal finance commitments rose by 0.4%, while estimates for commercial finance commitments fell by 8.8%. Lease finance commitments rose by 2.3% to $436 billon.

Insurance Australia to review profit margins

Insurance Australia Group was on track to meet its insurance pre-tax profit margin of between 8-10%, however the extent of the earthquake aftershocks in Christchurch yesterday is unknown.

IAG Group chief executive, Mike Wilkins said it was too early to forecast the financial impact of yesterday’s events.

“We’ll advise the market as soon as we have a firm assessment of the likely outcome and any impact on our results for the financial year 2011,” Wilkins said in a statement this morning.

Following the earthquakes that struck last September and February this year, natural peril claim costs for the current financial year are expected to be higher than AIG Group’s previously forecast figure of $540 million.

AIG Group expects the reinsurance bill this financial year to be $630 million.

Greece credit rating downgraded

Greece has now become the lowest-rated country in the world according to Standard & Poor’s, which downgraded the country’s credit rating yesterday.

The blow comes as investors become increasingly worried over European sovereign debt, and have urged the Greek Government to continue hashing out a new funding deal with the European Union, the IMF and the European Central Bank.

Greece is now rated as CCC, down from B.

In a statement, S&P said this reflects “our view that there is a significantly higher likelihood of one or more defaults”.

“Risks for the implementation of Greece’s E.U./IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required.”

Virgin, Delta alliance given final approval

Virgin Australia has said it has been given final approval for a proposed alliance with Delta with American regulators giving the tie-up their clearance.

The Department of Transportation has said it has given approval for the joint venture to proceed, which will allow the two companies to share codes and flight schedules.

“The Delta alliance is a key plank in our strategy to build an international network of airline partners that offers global coverage,” Virgin Australia chief John Borghetti said in a statement.

“Now that we have DOT approval, we will move quickly to implement the joint venture and plan to have it up and running by the end of the year,” he said.

Shares low after Greece downgrade

The Australian sharemarket has opened lower today after a weak night on Wall Street, where investors were spooked after S&P announced a downgrade on Greece’s credit rating.

The benchmark S&P/ASX200 index was down 30 points or 0.66% to 4531.9 at 12.00 AEST, while the Australian dollar remained flat at $US1.06c.

AMP shares lost 0.81% to $4.89, while Commonwealth Bank shares fell 0.14% to $49.52. Westpac fell 0.41% to $21.76 as ANZ dropped 0.46% to $21.43.

In the United States, the Dow Jones Industrial Average rose just over one point or 0.01% to 11,952.87.

Government to maintain mining tax levy

Resources minister Martin Ferguson has said the Government will not move to increase the amount of revenue imposed on miners under the new MRRT.

“We took it to the last election and we will deliver on the agreement with the mining industry,” Ferguson told ABC Radio this morning, responding to comments from Labor’s left-wing faction that levies should be increased.

“Doug Cameron and members of the Left are entitled to their view but I must say they have got short memories.”