Some good news at last. US Federal Reserve chairman Ben Bernanke has said in a taped interview with the CBS program 60 Minutes that the country’s recession will likely end later this year.
“We’ll see the recession coming to an end probably this year. We’ll see recovery beginning next year.”
“This (economic) decline will begin to moderate and we’ll begin to see a leveling off. We won’t be back to full employment. But we will, I hope, see the end of these declines that have been so strong in a last couple of quarters,” he said.
But Bernanke said that nations must use “political will” to continue, and that recovery is impossible without any motivation.
“The biggest risk is that, you know, we don’t have the political will,” he said.
“We don’t have the commitment to solve this problem, and that we let it just continue. In which case … we can’t count on recovery.”
Meanwhile, shares in debt-laden transport infrastructure group Asciano have gained 23.8% to 78 cents after it announced it has received several takeover proposals.
In a statement to the ASX today, the company, which is majority owned by entrepreneur Mark Rowsthorn, said it has received “multiple expressions of interest/proposals from a range of industry and financial parties in relation to a variety of potential transactions”.
Asciano says it is considering the sale of its coal or container ports operations and that other takeover proposals would see a recapitalisation of the company.
The news helped the Australian sharemarket, which has started the week on a positive note, following gains late last week on Wall Street.
The benchmark S&P/ASX200 index was up 20 points or 0.6% at 12.04 AESDT. The Australian dollar also opened higher at US65 cents.
Commonwealth Bank shares have gained 3.2% to $31.23, while ANZ jumped 2.7% to $13.85. NAB gained 2.2% to $18.18 as Woolworths also gained 1.2% $24.86.
Meanwhile, ANZ has rejected speculation about widespread job cuts by saying it does not expect to make “material” job cuts during the next 12 months and will not be moving work to India.
“Despite the economic slowdown, ANZ’s business is continuing to grow, and the bank does not expect material reductions in employment in 2009,” the bank said in a statement yesterday.
The bank has also said that while the nature of some employee’s jobs will shift, none of these jobs will be moved to India where the company has a technology centre.
Meanwhile, troubled financial group Babcock & Brown is searching for finance for management buyouts, according to newspaper reports.
The group’s head of infrastructure in Europe, Antonino Lo Bianco, is believed to be seeking backing for the group’s infrastructure and wind farm funds, according to British newspaper The Independent.
Britain’s Financial Sunday Express also reported that the British division of the company is interested in buying a management contract.
The division, Babcock & Brown Public Partnerships, released a statement last week saying the administration of its parent company will not affect it negatively.
There has also been more good news for the property sector, with the total value of housing commitments excluding alterations and additions gaining a seasonally adjusted 2.3% according to new ABS figures.
The data shows total personal finance jumped 0.6%, with credit commitments up 0.8% and fixed lending commitments also up 0.2%.
Commercial finance commitments, however, decreased 0.4%. Fixed lending commitments dropped 2% while revolving credit commitments gained 2.3%.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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