Today's News - Wednesday 14 October 2020
Today's News - Wednesday 14 October 2020
Our Backyard
The Federal Government is looking into reports that Chinese state-owned energy providers and steel mills have been told to stop importing Australian coal.
Trade Minister Simon Birmingham said he had seen the reports, and that the Government had reached out to China for more information.
"We don't have evidence to verify those reports," he said.
Prime Minister Scott Morrison said China does sometimes change its import demand based on how much coal it is receiving domestically.
The federal government revealed plans in the 2020 budget last week to block super funds from adding new members if they fail to perform against benchmarks for two consecutive years, in a bid to improve returns within the $3 trillion sector. Treasurer Josh Frydenberg said in June he wanted the super funds to invest more in Australian infrastructure to help with the recovery from the coronavirus-induced recession. Industry super-owned IFM has almost $160 billion worth of funds under management, including about $65 billion in infrastructure investments.
IFM Investors chief executive David Neal has warned that federal government-imposed performance benchmarks of superannuation funds could lead to catastrophic results for workers' retirements and lead to fewer infrastructure projects amid the worst recession in 90 years. Mr Neal said there was a risk new benchmarks would make infrastructure returns look poor compared to a listed market index in some years. Infrastructure returns are typically lower but more consistent, providing long-term returns, while the share market can be more volatile.
Defence officials knew Australia's new fleet of attack submarines would cost almost $80 billion as early as 2015, despite publicly stating at the time the estimated price tag was $50 billion.
The admission by the Department of Finance was made to a parliamentary inquiry last week, with a Defence spokeswoman telling this masthead it did not disclose the figure for commercial reasons as the tender process had not been completed.
It was revealed in Senate estimates last year that the "out-turn cost" – the actual cost of the build calculated at the end of the project – was estimated to be at least $80 billion. The cost of the 12 new French-designed submarines then blew out this year to $90 billion.
But it has now been revealed the government budgeted for the project to cost $78.9 billion as far back as October 2015. This was the same month Defence officials told a Senate estimates hearing the out-turn cost was $50 billion.
A bill will pass South Australian parliament on Tuesday that will see criminal offenders have their sentence discounts for early guilty pleas reduced.
Under the changes, the reduction would apply for serious criminal offences — such as manslaughter, causing death by dangerous driving and rape.
The reductions include a 40 per cent discount decreasing to 25 per cent where the guilty plea is entered within four weeks of the first appearance.
The legislation will also require the courts to consider a number of factors when determining how much a sentence should be reduced.
Telstra says expensive costs associated with the NBN and the ongoing coronavirus pandemic will hurt the major telco’s earnings, but it will prioritise dividend payments to shareholders.
At its annual general meeting on Tuesday, the nation’s primary telecommunication provider said it is aware shareholders are concerned about future dividend payments being whittled down due to the economic downturn fuelled by COVID-19.
Telstra’s underlying earnings have been hit by around $200 million due to the recession and costs incurred with the rollout of the NBN across Australia.
Telstra chairman John Mullen said close to $6 billion in profit had been lost over the past decade primarily from the NBN rollout, but also lower intake from voice, SMS and global roaming revenues.
West Australian taxpayers will tip an extra $16.1 million into the East Perth Power Station transformation, bringing the state's contribution in the development deal with Kerry Stokes and Andrew Forrest to $66 million.
In April, Premier Mark McGowan announced Mr Stokes' Australian Capital Equity and Andrew 'Twiggy' Forrest's Tattarang Pty Ltd – the new name of the Minderoo Group – would redevelop the 105-year-old landmark into a commercial and residential precinct.
The land at the centre of the $218 million redevelopment was valued by the state government at just $1, with the government initially planning to contribute $50 million in site works.
But budget papers released on Thursday revealed an extra $16.1 million for the project was included in the $5.5 billion 'WA Recovery Plan', which was intended as a spending stimulus to help the state recover from the economic shock caused by coronavirus pandemic restrictions.
The copyright for the Aboriginal flag should not be compulsorily acquired by the federal government, according to a Senate committee.
Instead, an independent Aboriginal body could have “custodial oversight” over the flag and make decisions about its use.
The recommendations follow an inquiry into Australians’ ability to freely use the image of the flag after a community push to “free” it from licensing arrangements held by artist Harold Thomas.
Forcing a partner to sleep on the floor, controlling their finances, monitoring who they see and other forms of coercive control could be made illegal under possible reforms to domestic violence laws.
On Tuesday, the NSW government said it would establish a Parliamentary Joint Select Committee to examine coercive control, possible legislative reform and overall policy approach.
The government also released a discussion paper detailing key issues, including potential benefits and challenges associated with criminalising coercive control.
Ugly scenes erupted in Melbourne over the weekend when a group of Orthodox Jews practising their faith were confronted by people accusing them of breaking lockdown rules.
Fiery footage showed worshippers, understood to be the Satmar Hasidic group, leaving the Adass Israel School, in south Melbourne, on Saturday night.
One of those filming the group leaving the school appears to be chased down the street in his video as two groups can be heard screaming at each other.
One clip uploaded onto social media showed the cameraman pointing at a large group walking down the street.
There is a recall which affects about 5500 of the family-focused Dodge Nitro SUV and Chrysler Grand Voyager seven-seat people-movers, is unrelated to the worldwide Takata airbag recall.
Dodge Nitros built between 2007 and 2012 are affected, as are Grand Voyagers built between 2008 and 2010.
In this case the driver’s airbag emblem may become loose or completely detached, making it a projectile when the airbag deploys.
Amazon Prime Day kicked off at midnight, offering Prime members two days of deals.
The deals will run for 48 hours until Wednesday October 14.
Prime Day deals from the US will also be available through Amazon until 6pm AEDT on Thursday October 15, extending the sale to 66 hours.
World News
At a huge military parade in the capital Pyongyang, overseen by Kim Jong-un, the Hwasong-16 intercontinental ballistic missile (ICBM) was wheeled out.
Analysts have said its “monster” size and range means it could target nukes to anywhere in the US and would overwhelm America’s missile defence systems. The really worrying element, however, is less the missile itself and more the truck it was resting on.
But there could be a fatal flaw in Mr Kim’s new nuke. It could be too big to move.
The unveiling of the Hwasong-16 missile system came at a military parade in Pyongyang to mark the 75th anniversary of North Korea’s ruling Communist Party.
Thousands of Rohingya have been forced to flee in recent days after gang warfare broke out in the world's largest refugee camp in southern Bangladesh, killing at least eight people and terrifying residents with sporadic gunfire, arson and abductions.
Authorities have arrested 12 people and dispatched hundreds of armed military and police officers to the camp of more than a million people near the coastal town of Cox's Bazar to try to contain clashes between rival gangs fighting for control of a cross-border methamphetamine trade.
Refugees, already traumatised by their flight from ethnic cleansing in neighbouring Myanmar in 2017, are once again being displaced and living in fear. It also prompted concerns that efforts to curb the spread of COVID-19 in the squalid camps could be hampered.
https://www.smh.com.au/world/asia/rohingya-flee-refugee-camp-gang-warfare-20201013-p564qd.html
The White House is moving forward with three sales of advanced weaponry to Taiwan, sending in recent days a notification of the deals to Congress for approval, five sources familiar with the situation said.
Reuters broke the news in September that as many as seven major weapons systems were making their way through the US export process as the Trump administration ramps up pressure on China.
Leaders of the US Senate Foreign Relations and House of Representatives Foreign Affairs committees were notified that three of the planned weapons sales had been approved by the US State Department which oversees Foreign Military Sales, the sources said, speaking on condition of anonymity.
A black man who was led through the streets of a Texas town by two white police officers on horseback pulling a rope has sued the US city and its police department for $US1 million ($1.4 million), saying he suffered humiliation and fear during his arrest.
A lawsuit filed last week in Galveston County district court on behalf of Donald Neely, 44, alleged the officers' conduct was "extreme and outrageous," both physically injuring Mr Neely and causing him emotional distress, news outlets reported, citing the court documents.
Covid-19
COVID-19 vaccine clinical trials by Johnson & Johnson in the US have come to a halt after a participant developed an “unexplained illness”.
In a statement, the pharmaceutical giant said further dosing in all COVID-19 candidate vaccine clinical trials had been “temporarily paused”.
This includes phase three of its Janssen Pharmaceutical Companies trial called “Ensemble”, involving up to 60,000 volunteers across three continents.
Premier Daniel Andrews says Victoria's coronavirus case numbers are still too high to open up, as the state records 12 new infections and one further death.
Melbourne's rolling 14-day average of new cases now stands at 10, which is up from 9.9 yesterday, and there are now 13 cases with an unknown source.
The latest death, a man in his 70s linked to aged care, takes Victoria's pandemic death toll to 811.
There are now 186 active coronavirus cases in the state, including five in regional Victoria's Mitchell Shire, north of Melbourne.
https://www.abc.net.au/news/2020-10-13/victoria-coronavirus-cases-rise-by-12/12759206
NSW Premier Gladys Berejiklian has announced the easing of social-distancing restrictions on outdoor dining and events on the same day the state recorded seven new locally acquired coronavirus infections.
Ms Berejiklian said businesses using an electronic QR code to maintain customer records will be allowed one patron for every 2 square metres in outdoor areas from Friday.
"While we are concerned with the emerging clusters we do feel confident enough that from Friday, outdoor venues will be able to have 2 square metres outside, in preparation for summer," she said.
Indoor restrictions will remain at 4 square metres.
Up to 500 people will be allowed to attend outdoor seated music performances, subject to the 4-square-metre rule.
https://www.abc.net.au/news/2020-10-13/nsw-locally-acquired-coronavirus-cases-rise-by-seven/12760558
A person with COVID-19 visited popular locations in NSW, including a Woolworths, McDonalds, Bunnings, and Ikea.
NSW Health issued a public health alert on Tuesday afternoon urging anyone who has visited the key sites to get tested for coronavirus.
The venues of concern are:
- Woolworths Oran Park, 351 Oran Park Drive on the following dates:
- Wednesday, September 30 from 5.30pm to 6.30pm
- Thursday, October 8 from 5.15pm to 6pm
- Friday, October 9 from 6pm to 6.30pm
- Prasadi Nepali Emerald Hills, 2 Hurricane Drive, Raby on Friday, October 2 from 3.30pm to 4pm
- Emerald Hills McDonalds, 101 Raby Road, Leppington on Friday, October 2 from 5pm to 5.15pm
- Aldi Emerald Hills, Shop 2/03, 5 Emerald Hills Boulevard, Leppington, on Friday, October 2 from 5.30pm to 6.15pm
- Fantastic Furniture Campbelltown, 4 Blaxland Road, Campbelltown, on Friday, October 9 from 3.30pm to 5.20pm
- Bunnings Gregory Hills, 2 Rodeo Rd, Gregory Hills, on Tuesday, October 6 from 7pm to 8pm
- Ikea Tempe, 634-726 Princes Highway, Tempe, on Wednesday, October 7 from 1.30pm to 5.30pm
https://www.news.com.au/world/coronavirus
Property
The proponent of a hotel and hospitality school on Hobart's eastern shore (Kangaroo Bay) has failed to secure a two-year extension for starting substantial construction on the project.
Chambroad Overseas Investment Australia asked Clarence City Council for the extension, arguing the COVID-19 pandemic caused the delay.
But the motion was lost after a tied vote at Monday night's council meeting.
Council was presented with a petition with 2,000 signatures urging it to reject the extension.
Centuria Property Fund’s flagship office platform has cut by half the rent relief it is offering tenants as COVID-19 eases its grip and employees start returning to their workplaces but analysts remain pessimistic about the sector's outlook.
The fund manager’s ASX listed Centuria Office REIT reaffirmed its 2021 financial year guidance in a quarterly update - at 16.5￠ - and said rent collections were stable around 94 per cent, giving investors an upbeat look at the sector's post-COVID recovery.
But, despite Centuria's green shoots, the health of Australia's offices stands on a knife edge. Investment house Macquarie paints a more gloomy picture.
Sydney's vacancy rate has hit 10.2 per cent, Melbourne's is higher, at 11.3 per cent. Not too long ago, they were 3.7 and 3.4 per cent respectively.
SALES:
- Epping NSW - Eight strata-title shops in Lendlease’s Aurora Village sold to self-managed super funds or retirees looking for income-producing assets, Fitzroys’ Chris Kombi and Lewis Waddell said. All the shops transacted after July for a combined $7 million on an average yield of 5.4 per cent. Shops 301, 303, 305, 307, 309 Harvest Home Road and shops 1, 2 and 3 at 299 Harvest Home Road had rentals ranging from $33,000 to $58,000 per annum. Tenants included a Bottlemart, Harvest Pizza, Suburban Grill, Aurora Butchers and Oregano’s Bakehouse.
- Mount Waverley - A development site at 246-250 Highbury Road has sold for $3,628,888. Gorman Commercial’s Jonathon McCormack and Stephen Gorman, and Corser Property Group’s Bernard Corser, negotiated the sale of the site, which has a permit for 10 2-storey townhouses.
- Bayswater - Held by the same family for almost 30 years, a 2200 sq m office/warehouse at 9-11 Turbo Drive sold within three days for about $3.15 million with vacant possession, according to NSL Property Group’s Guy Naselli and CBRE’s Joe Brzezek and Sasan Misaghian. "Even during Covid 19, the pent up demand for quality assets has been evident," Mr Naselli said.
- Derrimut - A high clearance office/warehouse in the Paramount Business Estate, Unit 6 at 71 Elgar Road, sold through CVA’s Leo Mancino and Matthew Alderman for a tad over $1 million. The owner decided to sell after the tenant vacated the property. It was listed and sold within a month.
- Chadstone - A developer paid $1.66 million for a home at 307 Huntingdale Road after more than 30 others registered interest. Commercial Bureau’s Gideon Marcus said the 951 sq m property had attracted 38 genuine inquiries, many about the build-to-rent market. The property has a permit for a three-storey building with 14 apartments.
- Campbellfield - A private buyer bought a 1727 sq m vacant industrial site at 34 Sarah Street for $640,000. The property will initially be used for storage, with future plans to develop into a warehouse and office, selling agents Colliers International’s Mitch Purcell and Corey Vraca said.
LEASES
- Prahran - Peregrine Projects has leased a 56 sq m space in it’s Luxton Development to specialty coffee providers Head Honcho. Honcho will be opening its doors towards the start of November after signing up for a rent of $30,000 per annum plus GST through Aston Commercial’s Lucy Kuhne.
- Preston - AMS Constructions Pty Ltd has leased an older style brick warehouse at 74 Raglan Street, Gray Johnson’s Stephen Buchan said. The privately owned property leased for one year with a further one-year option at rent of $43,000 plus GST.
- Beaumaris - Coco Colour Bar Hair Salon is moving down Balcombe Road from No.82 to shop 4 at No.268 after signing a lease negotiated by GormanKelly’s Gerry Gleeson. Given the COVID-19 uncertainty, the landlord granted a 1-year lease at rent of $22,000 net per annum. All five shops forming part of 268 Balcombe Road are now tenanted.
- East Melbourne - Noble Systems has leased a 237 sq m office from Vantage Property Investments on level 2 at 176 Wellington Parade, paying $475 per sq m under a three-year lease. Noble will relocate from 487 Swan Street in Richmond to the fully fitted office with views out to the MCG in a deal negotiated by Colliers International’s Ash Dean and Damien Adkins.
- Hawthorn East - A bakery/cafe/restaurant will open at 1 Russell Street just behind the Rivoli Theatre after a business signed a 6-year lease with options. GormanKelly’s Gerry Gleeson said the 97 sq m shop was leased at rent of $30,000 net per annum with a six month rent free incentive.
- Bayswater North - Four industrial warehouses at 7,9,13 and 14 Market Drive have leased through CVA’s North Ian Angelico and Stan Dawidowski. Rents were undisclosed but each building netted between $180,000 and $200,000 per annum, with the estate typically attracting rentals between $120 and $125 per sq m.
Markets
Woodside employees got a rude awakening Tuesday morning with news from chief executive Peter Coleman of another 300 redundancies at the oil and gas giant.
Mr Coleman told global employees in a statement the company had made "a number of difficult decisions, but this one was the toughest one yet".
At the close the benchmark ASX 200 index was up 1 per cent to 6,196 points.
The Australian dollar was lower at 71.85 US cents.
Coal stocks suffered the sharpest falls, including Coronado Global Resources (-7.8pc) and New Hope Corporation (-7.3pc).
The fall was driven by media reports that China had effectively banned Australia's coking and thermal coal imports.
Meanwhile, banks and many other "blue chip" stocks were some of the best performers.
They include ANZ (+2.7pc), NAB (+1.9pc), Westpac (+2.2pc), the Commonwealth Bank (+1.1pc), Telstra (+4pc) and QBE Insurance (+3.2pc).
It followed a strong session on US markets, fuelled by expectations the US Government will eventually pass another round of COVID-19 stimulus packages.
US President Donald Trump offered $US1.8 trillion on Friday, after urging his team to "go big" on stimulus spending. It was a major backflip for Mr Trump who tweeted, last Wednesday, that he had "instructed" his "representatives to stop negotiating until after the election".
Betting odds aggregated by RealClearPolitics suggest punters see a 67 per cent chance of a Biden victory, and a 33 per cent likelihood of Trump retaining his job — the greatest gap so far between the two candidates.
On Wall Street, the tech-heavy Nasdaq index jumped 2.6 per cent to close at 11,876 points.
The Dow Jones index rose 250 points (or 0.9 per cent) to 28,838, while the broader S&P 500 lifted by 1.6 per cent to 3,534.
The S&P was about 1 per cent below its record closing high from September 2, nearly recovering from most of a 9 per cent pullback last month.
Amazon jumped (+4.8pc) ahead of its annual Prime Day shopping event on October 13 and 14, while Microsoft gained 2.6 per cent.
Apple surged (+6.4pc) ahead of a virtual event on Tuesday, when the company is expected to launch its newest iPhones.
Spot gold was down (-0.4pc) to $US1,922.78 an ounce.
Oil prices also slipped after a force majeure at Libya's largest oilfield lifted, a Norwegian strike affecting production ended and US producers began restoring output after Hurricane Delta.
Brent crude fell (-2.5pc) to $US41.78 a barrel.
https://www.abc.net.au/news/2020-10-13/asx-rise-wall-street-stimulus-covid19-tech-rally/12760160
Michael Tran
Director Relationships