ASIC to take over finance market supervision, Shares surge: Economy Roundup

The Australian Securities and Investments Commission is set to take over the supervision of trading from individual finance markets from the Australian Securities Exchange, as part of a Government plan to increase integrity in the market.

ASIC is expected to take its new roles in the third quarter of 2010, which will include responsibility for supervision and enforcement of misconduct laws on financial markets.

Financial services, superannuation and corporate law minister Chris Bowen said the move, which will see the ASIC take over some of the ASX’s responsibilities, is a move towards considering competition between operators in the market.

“Having one whole-of-market supervisor will consolidate the current individual supervisory responsibilities into one entity, streamlining supervision and enforcement, and providing complete supervision of trading on the market,” Bowen said.

“The supervision of listed entities raises a different set of issues,” he said. “ASIC and ASX are working well together in performing this role.”

Shares open higher after 10-month Wall Street high

The Australian share market has opened 1.8% higher today after positive results on Wall Street last week, where stocks rose to a 10-month high after Federal Reserve chairman Ben Bernanke made optimistic comments about the country’s recovery.

The benchmark S&P/ASX200 index was up 102.5 points or 2.39% to 4393.1 at 12.00 AEST. The Australian dollar also gained ground, up to US82c.

NAB shares gained 3.2% to $26.49, with Commonwealth Bank shares also gaining 2.3% to $44.56. Westpac rose 2.9% to $23.39, while ANZ also gained 3% to $19.60.

New figures from the Australian Bureau of Statistics reveal that vehicle sales dropped by a seasonally adjusted 6.9% during July, with only 75,006 vehicles sold.

The figures reveal a fall of 10.4% year-on-year. The biggest yearly fall was in Tasmania, which recorded a 21.6% decline, with the biggest monthly fall in ACT with an 11.7% drop.

Toll road operator ConnectEast is planning to raise up to $421 million in order to pay down debt.

The company said the raising is aimed to “create a more robust and sustainable capital structure” as well as reduce net interest costs and retain the benefit of current pricing of remaining debt tranches.

ConnectEast plans to pay off $559.6 million in debt by November 2010, aided by $624 million in existing cash balances, with gross debt of $810 million expected to be paid by November 2012.

“ConnectEast is benefitting from Eastlink’s continuing traffic ramp-up period, as well as steady customer account growth and our ongoing focus on account management,” managing director John Gardiner said.

Challenger records $90 million loss

Challenger Financial Services has recorded an annual loss of $90.7 million, but the company says it is well funded and placed to continue its investment management business.

Normalised net profit, excluding market-to-market movements and significant items, was up 0.5% to $218.9 million, while underlying operating cashflow was $287 million.

“Despite testing market conditions, we finished the year with an increase in normalised profits and enviable cash and capital balances to fund future growth,” chief executive Dominic Stevens said on Monday in a statement.

“The group is very well-capitalised and capable of moving quickly on opportunities expected to arise for life and funds management.”

Discount airline Jetstar is now in negotiations with Asian air traffic authorities, in order to expand its network to China, India and Laos as part of new flight plans.

“Currently we are in talks with some of the authorities in the region to gather traffic rights – so once we have additional rights we’ll definitely mount more flights to the region,” Jetstar Asia chief executive officer Chong Phit Lian told AAP.

“There’s still China we haven’t flown to, there’s still India we haven’t flown to, and Laos we haven’t flown to,” she said.

“And the rest are all here. So I would say that if you look at the map with the `five hour region’ these are the additional places that we would probably have the opportunity to talk to.”