Markets Live: ASX tepid, Billabong soars 12:55pm: So what do we know about Billabong's incoming chief executive Scott Olivet? Scott Olivet is a director at headphone maker Skullcandy, amusement park operator Cedar Fair Entertainment Company, and foreign policy organisation the Pacific Council on International Policy. He was the former chairman and chief executive of sportswear manufacturer Oakley, and was a senior executive at Nike and Gap. He was also a partner at management consultants Bain & Co for 13 years. Mr Olivet also served as chairman and director of Collective Brands, the parent company that owns footwear retailers and manufacturers Payless and Airwalk. Mr Olivet has a Bachelor of Arts in Government from Pomona College in Claremont, California and a Master of Business Administration from Stanford University. 12:51pm: The Australian dollar snapped its biggest consecutive two-day gain since November 2011 on speculation the Reserve Bank may cut interest rates to a record low next month and China's economy will slow. "There are still some downside risks for the Aussie," said Janu Chan, a Sydney-based economist at St. George Bank. There's a number of factors supporting that -- the RBA is talking the currency down, the prospect for another rate cut, and additionally the uncertainty around China. The Aussie fell 0.3 per cent to 92.30 U.S. cents as of 12:21 p.m. in Sydney following a 2.3 per cent, two- day gain. It fetched 91.79 yen from 91.69. The Aussie surged yesterday after minutes of the Reserve Bank of Australia's last meeting showed policy makers" inflation outlook is being affected by recent currency declines. The nation's statistics bureau will release second-quarter inflation figures on July 24. "There's very important inflation data next week, so there's limited scope for the market to unwind RBA expectations in the near term,"" said Tony Morriss, the head of interest-rate research at ANZ in Sydney. 12:30pm: More on Billabong. 12:12pm: Engineering company Downer has had its blasting services contracts in the mining sector extended for $230 million. Coal miners Yancoal and Sojitz and gold producer Saracen extended its contracts with Downer Blasting Services (DBS) by another three years. DBS has been working with Yancoal since 2006 and operates at Yancoal's Moolarben, Ashton and Yarrabee mines, as well as the Duralie coal mine in NSW. The contracts mean DBS will continue to work on Sojitz's Minerva mine in the Bowen Basin, as well as Saracen's Carosue Dam gold mine in Western Australia. Downer shares were flat at $3.84. 12:04pm: ANZ economists Warren Hogan and Andrew Salter have crunched the numbers and declared Australia has only a slim chance of turning around the Ashes series. The economists use a "somewhat unorthodox action and appeal to a statistical relationship between Australia's performance at the Ashes and exchange rates between the Aussie dollar and the pound. "Comparing this to our exchange rate data for each calendar year suggests that when the AUD/GBP is high, Australia performs poorly," the economists said. When it is low, Australia performs well. What's more, this partnership seems to hold all the way back to the tail-end of our sample, which opened its innings more than a century ago," they said. They believe the relationship between the Aussie and the pound strong enough to suggest that Australia will find the 2013 series difficult to win. "Indeed, our model suggests that England will win the series by between one and three tests," they said. A challenge indeed. One Australian dollar was last buying a little over 61 pence. 11:51am: Citi analyst Craig Woolford has upgraded Billabong to buy from neutral after the refinancing deal. It will be a difficult journey and there are no quick fixes, but the Board has avoided insolvency with an improved management team in our view," Mr Woolford said. He noted that the complex refinancing deal would be costly for ordinary shareholders, with their interest in the business diluted to at best, 64 per cent of the company, and at worst, 50 per cent of shares. 11:34am: Moody's has given its seal of approval to bank moves to give their shareholders a bigger slice of the profits, saying current dividend payout ratios would survive a recession. Commonwealth Bank, NZ and NAB have all impressed investors by increasing the share of profits payed out as dividends in recent months, as they generate millions in surplus capital. Other types of ""capital management"" initiatives have included Westpac's special dividend of 10c and moves by ANZ and NAB to buy back their shares. A new report from credit rating agency Moody's has crunched the numbers on whether these payout ratios are sustainable. It noted that households have much more debt than they did two decades ago, which would mean a recession would inflict significant losses on banks. On the other hand, banks have been working hard to build up capital as a buffer against losses. ""Our scenario analysis suggests that, in a cyclical economic downturn akin to that experienced during the 1991 recession, the banks would be able to sustain the modestly increased dividend payouts, and maintain capital ratios at strong levels,"" Moody's says. In a more severe economic collapse such as the 2007-11 US housing meltdown, it says the big four would not be so fortunate. Under these circumstances, banks would suffer ""material"" declines in their capital levels and would have to cut dividends and raise extra capital, it says. 11:21am: UBS has joined Deutsche Bank and others in praising BHP Billiton's results this morning. Led by Glyn Lawcock, the UBS analyst team said BHP had reported "a better than expected quarter overall." UBS noted that BHP had hit an iron ore production rate in the June quarter that - if continued over the 2014 financial year - would easily beat the company's promise to produce 207 million tonnes of iron ore during the next 12 months. UBS said BHP's iron ore division was "doing a great job of optimisation." The optimisation push at BHP ramped up about one year ago when the company axed plans to build a $20 billion outer harbour at Port Hedland. 11:01am: Elsewhere with M&A activity, Macquarie was also wary of APA Group's $2 billion scrip bid for Envestra which values the target's shares at around $1.10. "We have lowered our recommendation from Outperform to Neutral" for APA scrip it told clients today. APA is again using scrip for a potential takeover which creates a scope for additional dilution particularly before final merger terms are established. Beyond the transaction APA is trading at our valuation with limited yield growth. In morning trading, APA was down another 6 cents at $6.17 as Envestra traded steady at $1.12.25 cents. 10:56am: Goldman Sachs is not alone in telling clients to avoid ALS, with Macquarie slapping an "under-perform" on ALS shares, pointing in particular to the trading headwinds the laboratory testing group is encountering, notwithstanding its support for the acquisitions finalised Monday. "The extent of deterioration in Minerals earnings and ongoing challenging market conditions faced by this segment will likely see the stock Underperform in the near term," it told clients today. Hence we reduce our recommendation from Neutral, and lower our target price to $8.45 ($9.40 previously). 10:51am: Goldman Sachs told clients it is not willing to change its "sell" recommendation on laboratory testing group ALS following $490 million of oil and gas sector purchases Monday, along with an earnings downgrade. Along with the acquisitions, ALS is undertaking a 1-for-11 rights issue at $7.80, a modest discount to its last traded price of $9.41. ALS has typically traded around a market multiple but we continue to view a 10 per cent discount as appropriate given earnings are now late cycle and we are forecasting a declining capital returns profile," it told clients today. Our target price implies a total return (including dividends) of -12 per cent (at pre trading halt close). We maintain our Sell rating. Goldman Sachs has a $7.85 target price for ALS shares. 10:45am: Tokyo stocks have opened 0.74 per cent lower, weighed down by the higher value of the yen and caution ahead of the US central bank chief's Congressional testimony. The benchmark Nikkei 225 index on Wednesday was down 107.32 points to 14,491.80 at the start. ""Many players will likely take a wait-and-see approach ahead of major events such as the US Federal Reserve chairman's congressional testimony, the G20 summit, and the Japanese upper house election,"" said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities. Investors are waiting for Bernanke's semi-annual testimony in congress on Wednesday and Thursday. 10:27am: BHP Billiton has beaten its guidance for iron ore production but fallen short in its petroleum business, according to full-year results released this morning. Iron ore remains BHP's biggest money spinner and today's numbers show that Jimmy Wilson's first year in charge of the division was a strong one. BHP had previously forecast full-year iron ore production of 183 million tonnes, including third-party tonnes, but actually delivered 187 million tonnes. That number is expected to jump to 207 million tonnes this time next year. BHP said expansion of its Jimblebar iron ore mine in the Pilbara was ahead of schedule, but the cost had blown out by $US340 million. Full story. 10:25am: Iluka shares are 3.8 per cent higher to $10.81 despite reporting revenue from its mineral and sands operations has dropped 42 per cent in the first half of 2013 after lower prices forced it to cut production. 10:23am: A bit more on Billabong. The shares went into a trading halt at 25 cents yesterday pending announcements by the company on asset sales and refinancing. But after the news of a bridge loan and Ms Inman's departure, Billabong shares were up 11 cents, or 46 per cent to 36 cents shortly after the market opened on Wednesday. 10:21am: The Australian share market has opened flat to lower. The benchmark S&P/ASX200 index was down 7.1 points, or 0.14 per cent, at 4,978.9, while the broader All Ordinaries index was down 8.1 points, or 0.16 per cent, at 4,960.5. On the ASX 24, the September share price index futures contract was down 10 points at 4,937, with 5,026 contracts traded. 10:03am: Forecasting demand for zircon and titanium dioxide remains "challenging" mineral sands producer Iluka Resources said, due to the volatile global and regional economic performance along with uncertain business conditions. The prospects for a pick up in demand for zircon has prompted a slight rise in production with calender 2013 output now seen at 280,000 tonnes up from 220,000 tonnes forecast earlier it said. 10:02am: Billabong International chief executive Launa Inman could walk away from the Australian surfwear company with up to $4.6 million after 13 months on the job. Ms Inman, who came to Billabong from Target and Officeworks, is set to be replaced by Scott Olivet, a former chairman and chief executive of US sportswear group Oakley. Billabong has entered a complex $294 million refinancing deal that will give the ailing company a lifeline. According to the package outlined by Billabong when Ms Inman was appointed in May 2012 she was given: Base salary: $1.3 million a year, subject to an annual review Short-term incentive: Up to 100 per cent of her base salary, subject to the board's assessment of her performance in achieving financial and non-financial targets Share investment: $100,000 to acquire shares in Billabong Long-term incentive: $614,000 for the financial year ending June 30, 2013, subject to shareholder approval Termination: Base salary of $1.3 million if "fundamantal change" in the company occurs Billabong has yet to outline Ms Inman's termination package. 9:53am: More on BHP. Deutsche Bank analyst Paul Young described the result as "very strong" and named the copper result at Escondida and the iron ore result in the Pilbara as the highlights. "This is a very strong result, it was ahead of our forecasts for every single commodity with the exception of petroleum and that was just a miss on the conventional volumes," he said. Mr Young said he believed BHP's forecast of 207 million tonnes of iron ore production next year was "very conservative." "We think they will beat that," he said. 9:50am: Insurance Australia Group says it will beat its previous profit guidance for the recently-concluded financial year, thanks to lower-than-expected claims and favourable money market trends. The insurer today said its profit margins would be between 16.8 per cent and 17.2 per cent- compared with previous guidance of 12.5 to 14.5 per cent. Managing director Mike Wilkins said revenue from premiums had grown more than expected, thanks mainly the changes in the currency markets. As well, claims from natural disasters were $470 million, compared with its assumption these claims would hit $620 million. Compared to our previously held assumptions, these factors have caused the Group's insurance margin to exceed our earlier guidance. Meanwhile, the underlying performance of the Group has remained strong over the course of the financial year," Mr Wilkins said. 9:46am: Wesfarmers says production at its coal mines rose sharply in the June quarter after recovering from the effects of wet weather over the summer. The company said 2.84 million tonnes of coal was produced from its coal mines over the quarter, up 25.2 per cent from the previous quarter, Wesfarmers said in a production report. The Perth-based conglomerate owns two coal mines, Curragh, in Queensland's Bowen Basin and Bengalla in NSW" Hunter Valley. As a result, metallurgical coal production for the year increased was up just 2.3 per cent to 7,380,000 tonnes. 9:28am: Good morning folks.