Telstra is poised to complete an $11 billion deal with the National Broadband Network in less than a week.
Under the terms, Telstra will receive at least $9 billion from NBN Co. to use or rent its infrastructure while the network is being built. Another $2 billion will go towards meeting Telstra’s service needs and delivery standards.
The deal still needs to be reviewed by Telstra advisors.
In further good news for the telecommunications giant, Telstra’s shares have jumped to their highest level in 10 months, up six cents to close at $3.08.
The NBN Co. Chairman Harrison Young told the Australian Financial Review yesterday a “very complicated” 2,000-page contract being negotiated with Telstra will be completed soon.
“Hopefully it will be done in about a week,” Young is quoted saying.
Optimism over the Australian economy among executives has fallen, according to the latest Business Spectator Accenture chief executive Pulse survey, which shows a 22% decline in the number of respondents saying they are confident about the year ahead.
The survey, which questions executives who run companies with revenue of over $100 million, also recorded that the estimation of the Government’s performance in managing the economy has fallen to the lowest average score in a year.
Employment expectations have fallen from 57% to 48%, while capital investment and profits expectations have fallen to 56% and 64% respectively.
Business Spectator reports the survey found that in general, executives feel that competition should continue to be encouraged.
The Australian sharemarket has opened slightly lower this morning after a weak night on Wall Street, here investors reacted to words from Federal Reserve chairman Ben Bernanke.
The benchmark S&P/ASX200 index was down 35 points or 0.77% to 4531.2 at 12.00 AEST, while the Australian dollar rose to just above $US1.07c.
AMP shares lost 0.4% to $4.94, while Commonwealth Bank shares fell 0.97% to $49.25. ANZ lost 0.94% to $21.13 as NAB dropped 0.94% to $24.21.
In the United States, the Dow Jones Industrial Average fell 19.15 points or 0.16% to 12,070.81.
Property giant Stockland has said it is in negotiations to sell 20% of its industrial portfolio for $200 million to a potential unnamed buyer.
“We have a clearly articulated strategy to reweight our commercial portfolio towards retail and self-fund our growth opportunities,” commercial property chief executive, John Schroder, said in a statement. “This offer is consistent with our strategic objectives and we are assessing the opportunity.”
“We are also evaluating a number of acquisition opportunities for reinvestment of the proceeds into assets across the group in line with our 3-R strategy.”
The company said the talks were in an advanced stage.
Sigma Pharmaceuticals says it has gained market share since selling its pharmaceuticals division, and has flagged a “substantial” improvement in earnings.
“Trading for year to date has been strong,” Sigma managing director and chief executive Mark Hooper says.
“The stronger momentum reflects a number of factors, including market share gains and changes in the distribution cost base following the sale of the Pharmaceuticals Division.”
“We would anticipate a sustainable increase in (earnings before interest and tax) EBIT for these factors of $6-8 million per annum.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
