Press digest australian business news jan 13

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Jan. 13 Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy. THE AUSTRALIAN FINANCIAL REVIEW (this site)Western Australian Premier Colin Barnett yesterday said the state government would support James Packer's move to expand the Crown Perth casino in a development that could cost up to A$1 billion. "Over time we want to build up more and more attractions such as a golf course  we want to do more and more cool things so people want to come here and have fun," Mr Packer said at a function last month. Page 33.-- The chief executive of Echo Entertainment Group, Larry Mullin, yesterday said the combination of casinos alongside five-star hotels was a winning bet. "The opportunity to build a five-star hotel doesn't always come across unless you have gaming  one thing that's been missing in Sydney and in Australia is the five-star hotel," Mr Mullin said. He added that rival casino operator Crown's intention to broaden its Crown Perth location would increase competition. Page 33.-- Forge Group yesterday rebuffed criticism of its decision to pay chief executive and managing director David Simpson A$2.75 million in his first year, saying it was a requirement due to the competition in the market for qualified executives. "There's a big shortage of people of this calibre around  mining services is a bit of a hot spot, so everybody is trying to get guys like David," Peter Hutchinson, founder of the construction contractor, said. Page 34.-- Mining entrepreneur Chris Wallin is reportedly considering a share placement and partial trade sale of his exploration company's A$1.85 billion coal developments in Queensland. The former geologist, who is also the ninth richest Australian according to BRW's Rich 200 last year, wants to develop QCoal's Byerwen Coal Project to allow production to begin in two years. QCoal is also looking to develop the Drake Coal Project at a cost of A$350 million-plus, with production scheduled to start by 2014. Page 35.-- THE AUSTRALIAN (this site)The value of QBE Insurance Group yesterday plunged by A$2 billion, after investors reacted angrily to the insurer's shock announcement which will see the company's annual profit halve in what is QBE's worst performance since the terrorist attacks on September 11, 2001. Chief executive Frank O'Halloran admitted that "we have made mistakes", but he said the company was "absolutely determined to make up this shortfall". The news comes a day after it was revealed that QBE's main United States subsidiary, Balboa, was being investigated by authorities. Page 15.

-- Analysts have warned investors against looking for short-term profits in the insurance sector following QBE Insurance Group's shock profit downgrade yesterday. "It doesn't matter how many actuaries you employ to crunch numbers and calculate risk  ultimately nature is and always will be an unpredictable beast," Frank O'Halloran, chief executive of QBE, said. Ross Curran, analyst at Commonwealth Bank of Australia, said "you can't look at the profits gained from one year to the next and make a judgement  some years are worse than others". Page 15.-- The Australian Investments & Securities Commission has reportedly launched an inquiry into claims of mismanagement at listed mining junior Paynes Find Gold after money was allegedly siphoned out of the firm while Peter Salter was chief executive. The new management is reportedly working alongside the corporate regulator, while the Australian Securities Exchange has asked the company to explain its recent record of poor disclosure. Page 15.-- Stephen Hester, chief executive of Royal Bank of Scotland (RBS), yesterday confirmed that the bank was thinking about the "sale or closure options for our cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses". The bank is understood to be searching for a buyer for its Asia-Pacific business, of which up to 32 percent of revenue is created by RBS Australia, formerly known as ABN Amro. Observers have warned that the Australian business may close if it is not sold alongside the Asian division. Page 15.

-- THE SYDNEY MORNING HERALD (this site)A parliamentary committee has heard from wealth managers that the Federal Government's proposed reforms to financial advisers will have little benefit for consumers, despite costing millions to implement. Diversified insurer Suncorp Group, which owns the Asteron Life advisory business, yesterday said "an unresponsive or disengaged client is more commonly a reflection of temporary issues rather than a reflection of a genuine need to cease the advice relationship". Page B13.-- Mineral sands producer Iluka Resources yesterday told investors that a drop in production and sales of zircon would be offset by a jump in the price and volumes of titanium dioxide. The company also revealed that Chinese demand for zircon weakened in the last quarter, due to a variety of economic factors. Shares in Iluka fell by A20 cents to close at A$16.70. Page B14.--

A proposal by Nathan Tinkler's Hunter Ports infrastructure group to construct a A$2.5 billion coal loader in Newcastle will be discussed by the New South Wales government next week. The plan pitches the mining magnate's company against Newcastle Ports Corporation, which has also filed a proposal to build new port facilities on the site of the former BHP Steelworks with the state's Department of Planning. Steve van Barneveld, head of Hunter Ports, however, said the company was "open to working with Newcastle Ports Corporation". Page B14.-- Commonwealth Bank of Australia and Australia and New Zealand Banking Group are reportedly considering making an offer for the local arm of Royal Bank of Scotland (RBS), after the diversified financial group announced it would exit the investment banking business. The adviser of RBS, Lazard, has reportedly spoken to Australian lenders about a possible sale of RBS' cash equities unit and a portion of the investment banking and retail equities divisions. Suitors are expected to submit their bids by as early as today. Page B14.-- THE AGE (this site)The S&P/ASX 200 Index fell 6.52 points to close at 4181 points yesterday, with gains nullified by a surprise profit downgrade from QBE Insurance Group. QBE's stock fell 12.7 percent to close at A$11.35 after the insurer warned its after-tax profit for the 2011 calendar year could be halved due to a record level of claims. "There won't be too many brave investors stepping in to catch this falling knife," Peter Esho, chief market analyst at contracts for difference provider City Index, said. Page B11.-- Around 21 internet service providers have signed year-long commercial agreements with NBN Co, the government agency tasked with rolling out the national broadband network, following months of negotiations. NBN Co earlier this week said new end-customers would not be processed unless carriers accepted the wholesale agreement. Companies were holding out over a variety of issues, including NBN Co's limited liability should accidents occur. Telecommunication giants Optus and Telstra are expected to sign the new contract soon. Page B14.-- The Australian Communications and Media Authority will impose a reserve price later this year on its auction of the wireless spectrum, although a spokesperson could not confirm if the auction would be delayed should the global economy continue to suffer. The telecommunications industry is already set to spend around A$1 billion this year renewing current spectrum licences, while any interested parties are required to register for the auction by September. Page B14. -- A former associate at investment bank JPMorgan, Elisa Maree Rietbergen, is scheduled to be arraigned today in the New South Wales District Court on insider trading charges. Ms Rietbergen, alongside her boyfriend Joseph Levi, a former National Australia Bank employee, pleaded guilty to the charges last month. According to a statement of facts, Ms Rietbergen overheard colleagues discussing a takeover of Valad Property Group, information later used by Mr Levi to purchase 30,000 securities before Valad's share price jumped 52 percent. Page B16.