Archives May 2019

need2know: Weak lead from Wall St

Local stocks will have to find their own way at the opening as Wall Street fluctuates between slightly positive and slightly negative after both the Dow and S&P 500 set fresh intraday record highs.

What you need2know:

• SPI futures down 5 pts at 5526

• AUD at 87.00 US cents

• In late trade, S&P 500 -0.1%, Dow -0.1%, Nasdaq flat

• In Europe, Euro Stoxx 50 +0.3%, FTSE +0.2%, CAC +0.5%, DAX +0.2%

• Spot gold up $US18.06 to $US1169.53 an ounce

• Brent oil down 76 US cents to $US81.58 per barrel

What’s on today

Australia credit/debit card lending, wage price index, lending finance, consumer confidence; US wholesale sales.

Stocks to watch

The following companies are hosting AGM’s today: Nine, Fortescue Metals Group, Commonwealth Bank, Asciano, Computershare, Aurizon.

Dulux Group is scheduled to release full-year results.

CIMB is maintaining a “reduce” rating on Commonwealth Bank and dropped its target price to $75.86 from $75.95 a share.“Relative to peers, we view CBA as more at risk from measures to cool the housing market, an increase in mortgage risk weights and a rise in ‘D-SIB’ capital targets. We still think CBA is overvalued,” it said.

Bank of America Merrill Lynch has maintained an “underperform” recommendation on Scentre Group and a price objective of $3.40 a share.


Near-zero US interest rates are too low and should make the Federal Reserve nervous, one of its top policymakers, Charles Plosser, said. In an interview with broadcaster CNBC, Plosser said that even though inflation was below the Fed’s preferred level of 2 per cent, there was no reason to keep interest rates at current crisis-era levels, especially with US unemployment now so low.

“That are many indicators that tell us rates are too low,” Plosser said. “We have been at zero for nearly six years and there is no precedent in history, even when inflation is too low, to have rates at zero when unemployment rates are as low as they are. We are really behaving in a way that is outside historical norms and that should make us nervous.”

The rouble resumed its dramatic slide on Tuesday, a day after the Russian central bank floated the currency that has been driven sharply lower by falling oil prices and economic sanctions imposed over Russia’s policy in Ukraine.


Zinc prices rose, supported by a strike at a Peruvian mine and concerns over expected tight supplies. “The mine supply side for zinc is going to be tight next year but more recently smelter output expectations in China have become more muted. We see zinc prices averaging above $US2300 a tonne next year,” Macquarie analyst Vivienne Lloyd said.

Chile’s Codelco, the world’s top copper producer, has lowered its term premium by 3.6 per cent to $US133 a tonne for 2015 term shipments of the metal to China. The premium is in step with the Chinese spot market, where the surcharge has more than halved this year.

A subtle shift may be taking place within OPEC as it heads into its most important meeting in years as the discussion over whether it needs to cut output to defend oil revenues quietly intensifies.

United States

US stocks edged lower on Tuesday afternoon after the Dow and S&P 500 managed to touch fresh intraday records for a fifth straight session in early trading.

Among the S&P 500’s biggest percentage decliners, the stock of Juniper Networks fell 3.8 per cent, a day after the company’s chief executive resigned following a board review of his conduct in a negotiation with a customer.

The benchmark has rallied more than 9 per cent from a six-month low in October, buoyed by supportive economic data and solid corporate earnings reports. For the year, the index is up over 10 per cent. “We have come pretty far, pretty fast. I wouldn’t be surprised to see the market consolidate a little, in the form of hovering around here or pulling back a little bit,” said David Lebovitz, global market strategist at J.P. Morgan Funds in New York.


Europe’s leading stock markets have pushed higher, with traders reacting to corporate updates while keeping a watch over escalating tensions in eastern Ukraine in the absence of major economic data releases.

Vodafone shares jumped 5.4 per cent to 219.4 pence after the British mobile phone giant hiked its full-year profits forecast despite tumbling profits in the first six months of its financial year, mainly on exceptional charges.

Shares in German consumer goods group Henkel rose 4.6 per cent after it also posted better than expected quarterly earnings and raised its full-year forecast. Outside the blue chips, Germany provided further earnings support after mid-cap construction group Hochtief, controlled by Spain’s ACS, rose 2.6 per cent. It reported a 12 per cent rise in underlying third-quarter net profit, beating market expectations

What happened yesterday

Heavy falls in the biggest miners pushed the Australian sharemarket lower, as the outlook for commodity prices continued to worsen.

The benchmark S&P/ASX  200 Index and the All Ordinaries each slipped 0.1 per cent on Tuesday.

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Port Hedland tugboat strike put on hold

A last-minute intervention has held off a strike at Australia’s largest iron ore export port.

A last-minute intervention has held off a strike at Australia’s largest iron ore export port.

A last-minute intervention has held off a strike at Australia’s largest iron ore export port.

A last-minute intervention has held off a strike at Australia’s largest iron ore export port.

Industrial action looms at Gorgon LNG project

Plans for a tugboat strike at Port Hedland on Wednesday morning have been put on hold, after an eleventh-hour intervention by the Fair Work Commission on Tuesday evening.

The four hour strike was due to begin at 6am Western Standard Time, but has been delayed by another week after the commission acted upon an application by tugboat operator Teekay Shipping.

The intervention means that iron ore exports by the likes of BHP Billiton, Fortescue Metals Group, BC Iron and Atlas Iron can go ahead unhindered on Wednesday.

Teekay sought an intervention on the grounds that it had sent a proposed workplace agreement to the tugboat engineers, which was due to be voted upon within a week.

The proposed agreement had not been ratified by the engineers’ union, the Australian Institute of Marine Power Engineers, and does not meet the engineers demand for daily hours of work to be capped at 12 hours.

But the commission handed down interim orders late on Tuesday evening, which effectively postpones the strike for one week, to allow Teekay’s proposal to be voted on by the engineers. Aside from the one week delay, the engineers must also provide three days notice of any new strike, meaning the earliest a strike would now take place at Port Hedland appears to be November 22.

Teekay has struck new workplace agreements with the other two groups of tugboat workers in recent weeks, the deckhands and the masters, and the company wants to test the engineers’ appetite toward the proposed deal.

AIMPE spokesman Andrew Williamson said an informal poll of engineers conducted on Tuesday indicated the members remained strongly opposed to the proposed deal circulated by Teekay in recent days.

“AIMPE is campaigning vigorously for its members to reject the company’s proposed agreement,” he said.

The threat of a strike comes at a bad time for iron ore miners who are already battling depressed iron ore prices, with several smaller iron ore exporters struggling to break even during the September quarter.

The miners believe the tugboat workers are already well paid, and their demands for improved conditions are at odds with the general drive across the mining industry for austerity and improved workforce productivity.

But with shipping movements through the port reaching record highs on the back of the rising tide of iron ore exports, the tugboat workers argue they are doing more work than ever before, and often working more than 12 hours per day.

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Scandal over Ultranet shares, jobs

The Ultranet schools IT project was dumped by the Coalition government last year.Senior Victorian education department officials bought shares in and took jobs with the company given a $60 million contract to deliver the failed Ultranet schools IT project.

The revelations will re-ignite questions over the former Labor government’s handling of the project – dumped last year by the Coalition after its cost blew out to $180 million – and come as Victoria’s anti-corruption agency continues its probe of the education department.

The shares scandal was uncovered by a secret 2010 internal education department inquiry which revealed its general manager, John Allman, had bought shares in CSG Limited before it was announced winner of the Ultranet contract in July 2009.

The internal inquiry also found two of the department’s then regional directors, Wayne Craig and Ron Lake, purchased 11,289 and 1112 CSG shares respectively after it was awarded the Ultranet contract.

Mr Lake’s assistant regional director for Loddon Mallee, Julie Baker, also bought 14,238 CSG shares in August 2009. CSG’s share registry confirms these purchases.

Fairfax Media understands the department’s former acting secretary, Jeff Rosewarne, received the findings of the internal inquiry in early 2011.

But it appears Mr Rosewarne, who also headed the Ultranet Project Board, had not acted on the inquiry’s recommendations for disciplinary action and referral of the share purchase to the Australian Securities and Investment Commission by the time he was appointed head of the Primary Industries department in August 2011.

Fairfax Media can also reveal the education department deputy secretary responsible for the Ultranet, Darrell Fraser, took an executive job with CSG in July 2011, two years after he was instrumental in giving the company its biggest-ever contract against the advice of Premier and Cabinet and Treasury.

Mr Fraser was joined at CSG six months later by another senior education bureaucrat responsible for the Ultranet, Dianne Peck.

The decision to award CSG the Ultranet contract shocked many in the education department and IT sector, with widepread concern over the Darwin-based company’s lack of experience and expertise in delivering major projects.

Victoria’s Auditor-General confirmed these concerns in December 2012, reporting “serious process and probity issues” with the Ultranet tender process, including CSG’s suspension from bidding in February 2009 only to months later re-emerge as the contract winner.

Fairfax Media can reveal that the key to CSG winning the Ultranet tender was its $5 million offer to buy a small company part-owned by a former colleague of Mr Fraser and Ms Peck’s weeks before tender process began in November 2008.

CSG bought a little-known company called Cinglevue Pty Ltd on October 17, 2008. Cinglevue was a vendor for US software giant Oracle’s educational products.

Oracle had been a partner in the Ultranet prototype trialled at Glen Waverley Secondary College, where Mr Fraser was principal and Ms Peck his assistant principal in the early 2000s.

Company records show another former Glen Waverley Secondary College staff member, Frank Aloisio, was a director and part owner of Cinglevue until its sale to CSG in October 2008.

Cinglevue’s other owners were former WA education department official-turned-Oracle executive, Greg Martin, and Perth IT businessman, Greg Tolefe.

Mr Aloisio was also a former business partner of the education department’s Ultranet project director Ben Cushing. Mr Cushing had worked at Glen Waverley under Mr Fraser and Ms Peck.

West Australian Supreme Court documents reveal that CSG paid $1.8 million for Cinglevue in October 2008 and a further $3.2 million when the Ultranet contract was signed in June 2009.

The documents refer to an “exclusive teaming agreement” between Oracle and Cinglevue to enable the Australian company to “act exclusively as the prime contractor with respect to the Ultranet tender response and the subsequent Ultranet agreement”.

In a statement, an education department spokeswoman said the department’s secretary Richard Bolt was provided with the internal inquiry into the CSG share purchases shortly after he was appointed to the role in late August 2011.

“Mr Bolt instructed his department to refer the report to ASIC and he also implemented the disciplinary actions recommended to him. In May 2012, ASIC advised the department it was not going to initiate a formal investigation,” the spokeswoman said.

Mr Allman, who is now the department’s south-east regional director, said he co-operated with the internal inquiry and accepted its recommendations.

“My decision to buy those shares was simply part of a long-term ongoing interest and was in no way on the advice of or connected with any employee of the department, past or present,” he said.

Mr Craig, whose wife is understood to have bought the shares under his and her name, declined to comment. He left the department last year and was not involved in the decision to give the Ultranet contract to CSG.

Mr Lake, who resigned as the department’s regional director for the Loddon Mallee in 2012, is now a director of schools in Riyadh, Saudi Arabia. He did not respond to Fairfax Media’s inquiries.

Ms Baker has also left the department and worked as a consultant with Mr Lake in Saudi Arabia in late 2012.

Mr Fraser and Ms Peck have left CSG and have also worked in Saudi Arabia with Mr Lake. Neither has responded to Fairfax Media’s inquiries.

Mr Cushing and several other former education department staff involved with the Ultranet have also since worked in Saudi Arabia.

Mr Rosewarne, now a director of the Catholic Education Office, declined to comment.

Announcing the signing of the Ultranet contract in July 2009, then education minister Bronwyn Pike described the tender process as “rigorous and comprehensive” and said CSG had “proven it is ready, willing and able to take on this important project.”

CSG’s education technology business was bought by Japan’s NEC in 2012.


What is the Ultranet?

An intranet for Victorian government schools promised in 2006 by the then Labor government.  It was shelved by the Napthine government after costs blew out to $180 million and it had few users.

Why is IBAC investigating the Education Department over the Ultranet contract?

Senior Education Department bureaucrats bought shares in the company awarded the Ultranet contract, CSG, and two were given executive jobs at CSG.



Labor government holds trial of Ultranet using software from US giant Oracle at Glen Waverley Secondary College.The college’s principal Darrell Fraser (left) joins education department as a deputy secretary.

November 2006

Labor promises Victorians it will deliver a $60.5m IT project to connect students, parents, teachers and administrators to classrooms.

August 2007

First request for tender to develop Ultranet released. All bids are over $100m so department cancels tender process and reduces project by 90 per cent. Cinglevue Pty Ltd is registered, part-owned by a former Glen Waverley SC staff member and with an exclusive deal to provide Oracle software.

October 2008  Darwin IT firm CSG Limited offers $5m to buy Cinglevue.

November 2008 Second request for tender for Ultranet begins.

February 2009 

Education Department Ultranet project board suspends CSG from bidding.

May 2009 CSG re-emerges as preferred Ultranet tenderer.

July 2009

Labor’s then education minister Bronwyn Pike announces $60.5m contract signed with CSG.

August 2010

Ultranet launched across Victoria and students given day off so teachers can get accustomed. System crashes, embarrassing government.

November 2010

Ted Baillieu leads Coalition to surprise election victory. Internal Education Department inquiry into senior officers buying shares in CSG begins.

Early 2011  Report of internal inquiry confirms four senior officers, John Allman (right), Ron Lake (far right), Wayne Craig and Julie Baker, had bought shares in CSG. Report delivered to acting education secretary Jeff Rosewarne.

June 2011 Darrell Fraser resigns as deputy secretary and takes senior executive post with CSG.

August 2011  Jeff Rosewarne (left) becomes Primary Industries Department secretary. New education secretary Richard Bolt handed report into CSG share buying. He acts on recommendations, taking disciplinary action and referring to ASIC.

January 2012 Education Department’s key Ultranet officer, Dianne Peck, joins Darrell Fraser at CSG.

May 2012  ASIC decides not to launch formal investigation into CSG share trading.

December 2012 Auditor General reports cost of Ultranet has blown out to $180m and finds serious probity issues with tender process.

June 2013  Napthine government announces taxpayer support for the Ultranet will end at the start of 2014, effectively killing the project.

Read more:Ultranet shares and jobs scandal snares Victoria’s education department Ultranet executive accused of fraudUltranet’s costly failure an education in politics and procurementUltranet IT system lined up for Catholic schoolsThreat to subpoena Victorian education chiefs over Ultranet dealUltranet’s biggest losers

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Fairfax front pages: Wednesday, November 12

Fairfax front pages: Wednesday, November 12 Central Western Daily, Orange, NSW.

Parkes Champion-Post, Parkes, NSW.

Canowindra News, Canowindra, NSW.

Hunter Valley News, Newcastle, NSW.

Manning River Times, Taree, NSW.

The Courier, Ballarat, VIC.

The Tamworth Times, Tamworth, NSW.

Bendigo Advertiser, Bendigo, VIC.

The Area News, Griffith, NSW.

Southern Highland News, Bowral, NSW.

Beaudesert Times, Beaudesert, QLD.

Camden Haven Courier, Laurieton, NSW.

The Courier-Sun, Bellingen, NSW.

Blue Mountains Gazette, Springwood, NSW.

The Transcontinental, Port Augusta, SA.

Coastal Leader, Kingston, SA.

The Border Mail, Albury-Wodonga, NSW/VIC.

Narooma News, Narooma, NSW.

Dubbo Mailbox Shopper, Dubbo, NSW.

Northern Daily Leader, Tamworth, NSW.

Mid-Coast Observer, NSW.

Wingham Chronicle, Wingham, NSW.

Gouburn Post, Goulburn, NSW.

The Advocate, Burnie, TAS.

Eastern Riverina Chronicle, Henty, NSW.

Nyngan Observer, Nyngan, NSW.

The Advocate, Hepburn, VIC.

South Coast Register, Nowra, NSW.

The Examiner, Launceston, TAS.

Port Macquarie News, Port Macquarie, NSW.

Daily Liberal, Dubbo, NSW.

Merimbula News Weekly, Merimbula, NSW.

North West Star, Mt Isa, QLD.

The Daily Advertiser, Wagga, NSW.

The Observer, Coleambally/Darlington Point, NSW.

The Weekly, Mudgee, NSW.

Redland City Bulletin, Cleveland, QLD

Bay Post, Batemans Bay, NSW.

Yass Tribune, Yass, NSW.

Gloucester Advocate, Gloucester, NSW.

Braidwood Times, Braidwood, NSW.

Hawkesbury Gazette, Hawkesbury, NSW.

Augusta-Margaret River Mail, Margaret River, WA.

Wimmera Mail-Times, Horsham, VIC.

Northern Argus, Clare, SA.

Goondiwindi Argus, Goondiwindi, QLD.

Narromine Newsn Narromine, NSW.

Dungog Chronicle, Dungog, NSW.

Jimboomba Times, Jimboomba, QLD.

Moruya Examiner, Moruya, NSW.

The Esperance Express, Esperance, WA.

The Canberra Times, Canberra, ACT.

Tenterfield Star, Tenterfield, NSW.

Wellington Times, Wellington, NSW.

The Advertiser, Cessnock, NSW.

Cootamundra Herald, Cootamundra, NSW.

Maitland Mercury, Maitland, NSW.

Border Chronicle, Bordertown, SA.

The Flinders News, Flinders, SA.

Armidale Express Extra, Armidale, NSW.

The Leader, Wagga, NSW.

Grenfell Record, Grenfell, NSW.

The Armidale Express, Armidale, NSW.

Cowra Guardian, Cowra, NSW.

Merredin-Wheatbelt Mercury, Merredin, WA.

The Blue Mountains Review, NSW.

Avon Valley Advocate, Northam, NSW.

Western Advocate, Bathurst, NSW.

The Young Witness, Young, NSW.

Bombala Times, Bombala, NSW.

Great Lakes Advocate, Great Lakes, NSW.

The Standard, Warrnabool, VIC.

The Border Mail, Albury-Wodonga, NSW/VIC.

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Grab the garden hose rather than a shoe to splat a cockroach

Graphic: Jamie Brown Graphic: Jamie Brown

Local cockroaches are parched but for leaf-eating bugs it’s an orgy of eating and breeding, as Melbourne’s drying conditions are a boon for some creatures and dire for others.

Rainfall in Melbourne has been well below average for five of the past six months, down by about one-third in every month but June, which is bad news for native cockroaches.

Dry conditions are both the reason why we have some cockroaches in urban areas and the reason we see them inside homes, Melbourne Museum’s manager of live exhibits Patrick Honan says.

About five years ago the local shy variety were hardly known. These creepy crawlies ate bush leaf litter, quietly churning soil nutrients, breaking down mulch and being part of the native eco system. But when gardeners – worried about water restrictions and drought – started introducing mulch to their gardens many were inadvertently transporting native cockroaches to their gardens inside bags of mulch.

As the gardens continued to dry out during the drought, desperate local cockroaches, like the common shining cockroach, started to venture into bathrooms seeking moisture, Mr Honan says.

“They only tend to be inside temporarily because there is nothing for them to eat inside. They are transient visitors,” he said.

These locals are around all year but it is only the dry conditions that bring them to notice, he says. There are about 500 native species but only four introduced varieties which are the ones seen scurrying in pantries or wardrobes.

Mr Honan knows most people either fear or loathe cockroaches no matter where they come from.

“People don’t like them but they are neutral as far as humans are concerned, they are neither good nor bad,” he said.

In theory, he says, Melburnians with cockroaches in their bathrooms should be looking for a garden hose to water their garden rather than a shoe to splat them with.

“That would make the garden outside more attractive than the inside of the house, but it might not work in all circumstances,” he said.

In dry weather leaf-eating bugs such as aphids, lerps (which attach themselves to leaves) and common butterflies are also likely to thrive.

“Leaf chewers do well during the dry weather,” Mr Honan said.

Distressed plants concentrate their nutrients in an effort to survive making leaves and sap richer and a feast for leaf chewers.

“Every year there will be a massive increase in one particular insect,” Mr Honan said.

“The environmental factors and sequence seem to make it perfect for that particular insect. There could be seven or eight factors that make it perfect for them to breed in numbers. We never really know what those factors are until it’s happened – it might be dry, then two weeks of rain and then very dry conditions. You just don’t know.”

There is one weather factor that brings an universally dreaded bug, and that is the hot northerly wind from the top end of Australia. The foul bush fly travels on those winds.

“Once they start being blown down on the hot northerly they start to breed here, but they can’t survive Melbourne’s winter so that’s something,” Mr Honan said.

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