The Reserve Bank of Australia index of commodity prices fell in October due to coal and iron ore prices backing off.
The index fell 1.1% in October in SDR terms, following a 0.9% fall in September. However, the index reading of 119.1 was 46% higher than in October last year. In Australian dollar terms, the index fell by 2.9% in October, but is up 33% for the year.
As reported by The Australian Financial Review, Western Australia and Queensland are upset about the way $50 billion of revenue from the GST will be distributed this year.
The states have reportedly said they have lost over $460 million this year due to a change in how mining royalties are handled. Both states are predicting they will lose even more money next year if the system remains unchanged.
Overseas, General Motors is seeking to sell over $US10 billion worth of common stock and $US3 billion of preferred stock in an IPO that would move the US Federal Government to a minority shareholder position, it has been reported.
The company expects to sell 365 million common shares for between $US26-29 and will file the terms in a prospectus with the Securites and Exchange Commission tomorrow, Reuters has reported.
The agency also reports the IPO would value the company at $US60 billion, but this is below the $US67 billion needed for the US Government to break even on the money loaned to the company.
The Treasury currently holds a 60.8% stake in GM due to the $US50 billion bailout, but is now prepared to take a loss on the sale of stock. Over time, sources say, the Government hopes its stock will improve.
Shares lower after weak Wall Street lead
The Australian share market has opened lower this morning following a weak night on Wall Street, where stocks dropped due to weak performances in the oil market.
The benchmark S&P/ASX200 index was down four points or 0.1% to 4693.6 at 12.25 AEST, while the Australian dollar was down slightly to US98c.
ANZ shares lost 0.2% to $24.84, while Commonwealth Bank shares fell 0.4% to $49.10. Westpac dropped 0.3% to $22.99 as NAB lost 0.4% to $25.79.
As reported by Fairfax Media, former prime minister Kevin Rudd and senior ministers held fake budget meetings in order to stop plans being leaked by former finance minister Lindsay Tanner.
It has been reported that these meetings would contain little detail in order to stop plans being leaked. After these meetings ended, Rudd, Wayne Swan and Julia Gillard would apparently meet together to discuss more detailed plans.
Global recovery still fragile
Nobuo Tanaka, executive director of the International Energy Agency, has told Reuters that the global recovery is still more fragile than expected and oil inventories remain high.
“The economic recovery has been a bit more fragile than people thought,” he said. “There’s still some uncertainty about recovery in Europe, while China is concerned about inflation and they’re tightening policy.”
“OECD stock levels are very, very high – historically high, and this situation will continue well into next year,” he said.
In Canada, regulators are set to approve BHP Billiton’s bid for Potash, according to the National Post.
The Post has reported that the decision will be in front of Prime Minister Stephen Harper’s desk, but his office has reported that industry minister Tony Clement will have the final say.
The publication has reported that Clement’s ministry has recommended a government-appointed overseer be set up to enforce the takeover terms, which include billions of dollars worth of infrastructure investments.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
