Debate continues over the next head of the International Monetary Fund, with French finance minister Christine Lagarde gaining more support despite a challenger from Mexico.
The Mexican Finance Ministry has said it would nominate its central bank chief Agustin Carstens for the role, but there is still pressure to nominate a European – as has been the tradition for decades.
While European Union officials have said there is a consensus growing for Lagarde’s appointment, the Mexican Finance Ministry said Carstens “has the abilities and qualifications needed to lead an institution of the relevance of the International Monetary Fund”.
Questions have also been raised over the IMF’s attention to smaller economies, with Oxfam saying the selection process needs to acknowledge the needs of developing countries.
Federal treasurer Wayne Swan has also said the selection process must be based on merit, saying in an economic note that “it’s important the selection of a replacement be open and transparent”.
“The tradition of automatically appointing a European to the role is one that’s long past its use-by date given the shift of global economic weight to emerging economies, particularly in Asia, over the past few decades.”
The Australian sharemarket has opened lower this morning following a weak lead form Wall Street late last week.
The benchmark S&P/ASX200 index was down 72 points or 1.54% to 4659.4 at 12.00 AEST, while the Australian dollar opened lower to $US1.06c.
AMP shares lost 0.76% to $5.23 while Commonwealth Bank lost 1.44% to $51.42. ANZ lost 2.41% to $22.24 as Westpac lost 2.5% to $22.18.
Elders has downgraded its forecast for full-year profit following a $14.6 million loss in the first half, with its shares falling over 8% this morning to $0.45c.
The company said in an update that underlying profit is now expected to be “at the low end of the current market range of between $7.5 million and $24.5 million” for the year. Its previous forecast was for a result between $15 million and $30 million.
The company said the result is due to one-off items including payment for cyclone damage.
“While we are expecting our customary increase in second half sales and earnings, our expectations are being moderated as headwinds increase in a number of business areas,” managing director Malcolm Jackman said in a statement.
The company also said that sales and demand for farm supplies is healthy.
Kevin Rudd, the foreign minister and noted sinophile, has called on Australia to broaden its relationship with China beyond resources-based trade.
According to The Australian Financial Review, Rudd said Australia could position itself to gain from China’s development as a consumption-based society.
“This is not the new orthodoxy… it has potentially huge implications for the future of Chinese growth, huge implications for how we do business with this place,” Rudd was quoted as saying.
The Future Fund, set up to fund the retirement liabilities of public servants, has snapped up a 50% stake in a Brisbane office building for $216.3 million from Stockland’s unlisted property fund.
The fund’s property allocation to March was 6.1%, up from 5.5% for the December quarter.
The fund, which no longer holds a significant stake in telco giant Telstra, has also nabbed Stockland’s 50% interest in the nearby Eagle Street for $16 million.
BHP withdraws from copper venture
BHP Billiton has said it will withdraw from the Zambian Mumbwa copper venture with Blackthorn Resources.
“We are confident about the potential to expand this resource and also very optimistic about the prospectivity of the Mumbwa region,” Blackthorn managing director Scott Lowe said in a statement
BHP shares fell over 1% today to $43.48.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
