Fortescue Metals founder and chief Andrew Forrest has announced he will step down from the top job and become the company’s chairman.
Nev Power will replace Forrest as chief executive, while current chairman Herb Elliot will become deputy non-executive chairman and lead independent director.
Fortescue shares increased this morning by over 1% to $6.59 when the announcement was made. Forrest says the company is in a good position for him to step down.
“Fortescue is now recognised for its ability to deliver on its targets and, with Nev’s extensive experience and knowledge available to lead the company, this is a perfect time for me to move away from my day-to-day, hands-on role,” he said.
Forrest founded the company in 2003, but now intends to focus on philanthropic endeavours.
Manufacturing activity contracted In May for a third consecutive month, according to the latest results from the Australian Industry Group-PriceWaterhouseCoopers Australian Performance of Manufacturing Index.
The index fell by 0.7 points to 47.7, under the 50-point level separating expansion from contraction. AIG chief Heather Ridout said in a statement the result was due to weak demand and cheaper imports.
“Key input costs such as energy are rising and manufacturers face ever shrinking margins,” he said.
“This continued flat performance highlights the potential risks the sector faces from any poorly designed climate policy measures.”
PricewaterhouseCoopers global head of industrial manufacturing Graeme Billings also said the weakness in manufacturing is evidence of weakness in the overall economy.
“Australia is one of only a handful of countries that are experiencing a surge in their currencies and underlines the need for local manufacturers to innovate, reassess their costs, develop new products and processes and continue the search for talent,” Billings said.
The Australian sharemarket has opened flat this morning despite a rise in Wall Street overnight where investors were given a boost in optimism due to debt crisis talks in Greece.
The benchmark S&P/ASX200 index was down by one point or 0.02% to 4707.2 at 12.00 AEST, while the Australian dollar rose over half a cent to $US1.07c.
AMP shares lost 0.96% to $5.16, while Commonwealth Bank shares lost 0.97% to $50.13. ANZ lost 0.96% to $21.94 as NAB fell 1.4% to $26.11.
In the United States, the Dow Jones Industrial Average rose by 128.21 points or 1.03% to 12,569.79.
Shareholders in gaming group Tabcorp have approved a plan to spin-off some company casinos.
“The cleanest, most effective outcome for shareholders is for the companies to go their separate paths,” chairman John Story told his shareholders, according to Reuters. “Time will tell, but we believe the outcome will be successful.”
Various analysts have said spin-offs may attract takeover offers.
“The creation of two companies potentially enables each company to participate in any consolidation or corporate activity in their respective industries,” Story said.
Mining group Xstrata has said it is confident in the medium- and long-term outlook for commodity prices.
Chief executive Mick Davis has told a mining conference that de-stocking of commodities in China has helped balance the market.
“The impact has been exacerbated by the events in Japan in March, recurring concerns about southern European debt and unrest in the Middle East. But despite these short-term influences in commodities markets, we remain confident about the medium- to long-term fundamentals of our industry,” he said.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
