Business News

Arcelor Mittal, headed by steel billionaire Laxmi Mittal, is the world’s largest steel maker by volume, acquired 14.9 percent in Macarthur Coal (MCC) which shook up the possible takeover bid of the coal miner. Ken Talbot decided to split his majority shareholding and allowed Mittal’s company, Arcelor Mittal, to acquire stake in his company. He agreed to sell his 9.1 million shares that accounts to nearly 20 percent of his stake in the company to ArcelorMittal at $19.96 per share. The price offered by Arcelor Mittal was an 8.5% premium to Mararthur Coal’s last trade.

The Macquarie Group posted their annual profit results today reflecting a 23 percent rise in their full year profit. It admitted in its statement that it would be difficult to match these records next year owing to the current economic conditions.
Macquarie Group recorded an annual profit of $8 billion for its financial year 2008 which was 23% up from previous year $1.46 billion. The full operating income reflected a 15 percent increase to $8.2 billion while Earning per share (EPS) increased 13 percent to $6.71.

Treasurer Wayne Swan delivered one of the biggest budgets ever for the nation today for the Australian Budget 2008. Economists and business groups hailed the budget and expressed their confidence in the budget. The Australian financial market also expressed their confidence and expected that the proposed budget shall help to reduce interest rates and benefit the financial markets as well. It is wise to understand that the budget surplus is heavily contributed by the boom in resource prices which is being fuelled by demand in China.

Merger of two big financial institutions of Australia – Westpac Banking Corporation and St George is likely to be announced today. Westpac revealed yesterday that it is in talks with St George for a possible merger between the two.

Investors and share traders at the Australian stock exchange are cautious before the introduction of new budget to be introduced on Tuesday. Traders also fear yet another surge in crude oil prices and problems in the financial markets. Thus, they would be more focussed towards the domestic events in coming few days.

National Bank of Australia has reported an increase of 25.8% increase in its profits to 2.7 billion in the first half. The net income for the bank rose to AUD 2.69bn in 6 months ended March 31. The stocks were also traded at three months high in Sydney trading. NAB’s shares rose $12.4 or 4 percent to $32.24. The strong results were attributed to strong lending and deposit growth. It also included one time gain from Visa Inc.’s initial public offering.

A 57-year-old former senior executive at Woolworths (WOW) has been charged for taking $3.7 million worth of kickbacks from awarding $37 million contracts a decade ago. A spokesperson from Woolworths said that the fraud charges were related to the retailer's MIS division (management information systems) before 1999. The former executive spent 9 years at WOW. The investigations, code-named Strike Force Whittlesford, have been following the worldwide money trait since 1999.

Here's an update on Australian real estate. The "Australian Mortgage Industry Report", a joint research whitepaper by JPMorgan and Fujitsu Consulting, due to be published next month, makes the prediction that some 750,000 Australian homeowners will be subjected to "mortgage stress" in the coming months - which means more than 35 per cent of their income will be allocated to home-loan repayments alone.

Jérôme Kerviel , the 31 year old French rogue trader employed by France's second largest bank, Société Générale (SocGen) has been charged for "breach of trust'', "falsifying and using falsified documents'' and "breaching IT controls access codes''. News of the biggest ever financial fraud in history broke last Thursday on the 24th of January 2008. The rogue trader defrauded the bank of €4.82 billion (AUD$8.2 billion, US$7.09 billion) - the largest trading fraud by a single person. Kerviel took an US$83 billion losing bet on European share prices.

The world’s second richest man, Warren Buffett, is pledging 84 per cent of his fortune to charity - that’s about $54 billion. In an interview with Fortune magazine 75 year old Buffet planned to give away more than $54 billion in stock in his Berkshire Hathaway investment firm, starting in July. Warren Buffet is the chief executive and chairman of Berkshire Hathaway, owning 474,998 Class A shares in the company, a stake of nearly 31 percent that was worth nearly $US44 billion in late June, Fortune said.