The chief executive of the ANZ Banking Group, Mike Smith, has said the Australian economy has reached its bottom and the financial services sector is in a much better position than it was last year.
“I think the worst is probably behind us now,” Smith told ABC’s Lateline Business. “That doesn’t meant there haven’t been any casualties – we’ve been through a war.”
“It was very precarious…Most people don’t understand how perilous it was,” Smith said. “We’re in a different game now.”
Smith also said he believed unemployment will peak at 6%, which he said was not a “historically high number”. His comments came just hours before new Labour Force data showed the unemployment rate remained at 5.8% during July.
The Australian share market has opened higher today despite disappointing results from the US overnight, where new economic data dashed hopes of a fast and speedy recovery from the recession.
The benchmark S&P/ASX200 index was up 42 points or 0.98% to 4306.5 at 12.00 AEST. The Australian dollar also remained steady at US84c, but moved to $US40.5c after the unemployment data was announced.
NAB shares rose 1.3% to $25.75, while Commonwealth Bank shares also gained 1% to $43.66. Westpac rose 2% to $22.51, as ANZ gained 1.1% to $19.45.
Big profits for Citigroup
Meanwhile, Citigroup Australia expects a record profit due to strong results from the company’s debt capital markets division.
In an interview with Business Spectator, chief executive Stephen Roberts said the local business is performing better than it ever has.
“The numbers that we are generating in Australia are significant records for the first six to seven months of the year over and above any year in history, so the results are very, very strong,” he said.
“But it’s been a very successful year for us, in fact a record year for us in terms of capital markets activity in Australia.”
He also said the global financial crisis was caused due to an “unprecedented oversupply of liquidity and mispricing of risk”.
Optus bids for NBN work, Turnbull to go before election
Optus, the country’s second largest telecommunications provider, has said it supports the first plans for the Government’s National Broadband Network and has even launched a tender for its first stages.
The company said in a statement that the $250 million program to connect black spots in regional areas is an important first part of constructing the network.
“Therefore the Optus group of companies are pleased to announce that they have lodged a range of bids in response to the Commonwealth Government’s request for tenders for the RBBP,” Optus said.
“The bids would see Optus build and then operate the new backhaul network for a period of at least five years on behalf of the Government.”
Meanwhile, The Australian has reported that Liberal MPs are considering replacing opposition leader Malcolm Turnbull before the 2010 election.
The report claims that emissions trading spokesman Andrew Robb is in the top spot to replace Turnbull. The paper cites MPs who said any more blunders from Turnbull could lead to his replacement.
Overseas, Wall Street recorded disappointing results after the Institute for Supply Management’s services index fell to 46.4, below the 50-point level separating expansion from contraction.
The Dow Jones Industrial Average fell 39.22 points, or 0.42%, to 9,280.97.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
