The Wallabies have something in common with the Aussie dollar – both have recently taken a beating, but the difference for the currency is that this is a good thing for the country. Australia’s economy, which has enjoyed 22 years of uninterrupted growth – contributing to its status as the happiest country in the world and home to some of the most expensive cities – is facing a one in four chance of going into recession, according to Bank of America Merrill Lynch.
The fall this year in the value of the country’s currency may offer some relief, even if, to date, the impact has been offset by declines in commodity prices. Australia’s economy has broad exposure to mining and mining-related industries, and with prices falling and demand weakening, especially from its primary market of China, dollar receipts have been down. This could change, if the currency weakens even further.
Australia’s beleagured prime minister, Julia Guillard, who herself is facing defeat in the September general elections, says the Aussie needs to weaken further. “A sustained depreciation of the Australian dollar in those circumstances would be a very good thing…(it would) stimulate further growth in the non-mining sector, while the firms that have adjusted to the historically high dollar stand to benefit from its fall.” The local currency has slumped 11.3% this quarter, the worst performer among 10 currencies tracked by Bloomberg which says this is due to the US economy strengthening and growth slowing in Australia’s biggest trading partner, China.
Australian banks, however, continue their winning streak, raking in AUD$71 million in profit – each day. The Sydney Morning Herald quotes the latest report from the Bank of International Settlements which says that the country’s big four banks have been ranked the most profitable in the developed world for the third year running. With big bank profits likely to exceed AUD$26 billion this year, figures show the Commonwealth Bank, Westpac, ANZ and NAB made better returns last year than lenders in 10 major developed countries, including Canada, the US, Britain and Europe. The chief executive of the Australian Bankers’ Association, Steven Munchenberg, says the banks’ superior profits stem from the economy’s resilience.
But banking employees haven’t shared in the ongoing windfall. Australian banks have embarked on deep job cuts. The Finance Sector Union says the big four cut more than 3300 positions last year, and 1300 jobs so far this year. The union’s national secretary Leon Carter said the profit numbers showed banks were ”sacrificing” their staff for shareholder gain.
The market tumult of the last two weeks, which has seen huge swings in the performance of several Asian stock exchanges, is taking a growing toll on the IPO market. Casino owner Macau Legend is believed to have pulled its planned Hong Kong listing on Friday, and has apparently had discussions with the bourse about a restructured offering. The company had hoped to raise USD$607 million, but since the start of its pre-marketing efforts on May 27, the exchange has dropped by 11%. The casino company is not the only victim of the latest upheaval in the markets – SPH Reit and NW Hotel Investments have also put road show plans on hold.
The Financial Times reports that the average pay of top bankers, including JPMorgan’s Jamie Dimon and Royal Bank of Scotland’s Stephen Hester, dropped by 10% last year in response to to investor and regulatory pressure. Analysis of total pay awarded to the heads of 15 banks shows that they took home $11.5m on average in 2012, one tenth less than in the previous year. This marked the first pay cut for bank chiefs in three years, a period in which their profit growth and investor payouts have underperformed many other sectors.Last year’s fall in pay coincides with the 15 banks surveyed reporting an average drop in net income of more than 20%.
Amundi, the asset management arim of Credit Agricole and Societe Generale, is hiring to beef up its Asian distribution team as it plans to expand its investor base and boost assets under management in the region over the next three years. Amundi currently has 15 staff in Hong Kong, Taiwan, Singapore, Malaysia, Korea, and Japan, and is looking to make hires in Hong Kong and Taiwan in sales, product and marketing.
In what may come as a big surprise to many, China has beaten Singapore as having the best work-live balance rating in Asia, according to the Regus Work/Life Balance Index. Singapore improved to 128 points to place third overall in Asia, behind China (136) and India, in first place, at 139. The annual survey of 26,000 professionals in 90 countries uses various factors to produce an index value that reflects overall levels of personal-work life harmony. Among other factors, independent researchers asked respondents whether, over the past year, they were spending more time away from home, whether they enjoyed work more, whether they were achieving more at work, and whether they had taken on additional work duties.
Quants are not the only experts in mind-boggling equations. Reuters reports that scientists from Britain’s John Innes Centre have detected that plants do complex calculations to adjust their rate of starch consumption to prevent starving at night when they are unable to feed themselves with energy from the sun. “This is the first concrete example in a fundamental biological process of such a sophisticated arithmetic calculation,” the John Innes Centre reports.