Markets Live: Westpac weighs on ASX 4:16pm: The share market has closed lower, after slipping into the red in afternoon trade. The benchmark S&P/ASX200 index lost 20.6 points, or 0.4 per cent, to 5390.5, while the broader All Ords fell 22.3 points, or 0.4 per cent, to 5384.2. Among the sectors, energy tumbled 0.8 per cent, consumer staples lost 0.9 per cent and materials ended flat. Consumer discretionary and financials, which had traded in the black for long stretches of the session, both closed down 0.3 per cent. 4:13pm: The dollar is hanging onto its earlier gains in the wake of the stronger than expected retail sales, trading at 94.80 US cents. Another factor supporting the dollar is yesterday's upbeat Chinese data showing activity in the country's services sector expanded at the fastest pace in 13 months in October - a further indication the world's No. 2 economy has stabilised. Up next for the currency is the Reserve Bank's policy meeting tomorrow, but just about every economist expects the central bank to keep its cash rate unchanged at a record low 2.5 per cent. 3:57pm: An unexpected jump in retail spending is the result of confidence returning to the economy upon the election of a coalition government, Treasurer Joe Hockey says. ""Today's retail sales figures ... show that confidence is returning to the Australian economy in the lead up to and immediately after the coalition's election victory,"" Mr Hockey said in a statement on Monday. ""Consumers have now started taking their wallets out of their pockets."" 3:46pm: Stocks around the region fell after Federal Reserve Bank of Dallas President Richard Fisher said the US central bank should end its record stimulus as soon as possible. Nikkei: -0.9% Shanghai: -0.1% Taiwan: -0.5% South Korea: -0.6% Singapore: +0.1% New Zealand: -0.1% ""It's all about the Fisher speech,"" said Chris Weston, chief market strategist at IG. ""We're starting to see a slight change in rhetoric from the Fed, more and more people are highlighting the cost of quantitative easing. The Fed rhetoric in the last few weeks has certainly been more hawkish than the markets were expecting."" Fisher, speaking in Sydney, said the Fed should resume normal policy as soon as possible. Read more from the Fisher speech 3:33pm: Emirates has warned that it faces a ""mini perfect storm"" on international routes worldwide with excess flight capacity, heavy discounting of fares and high jet fuel prices. But the Dubai airline emphasises that its alliance with Qantas has boosted the number of passengers in its business and first-class cabins on routes to and from Australia, helping to offset lower margins on economy tickets. Emirates declined to put a figure on the financial gains from the Qantas alliance but one of its senior executives, Barry Brown, said the ""strength in the premium cabins is hugely noticeable"" from the tie up. ""The overall profitability of our cabins across the aircraft is not so bad. That [increase in passengers in business and first-class] is probably allowing us to keep our head above the water,"" Mr Brown said. Emirates has a 9 per cent share of the market to Australia, making it the third-biggest operator after Qantas and Singapore Airlines. Qantas and Emirates officially launched their alliance in late March, in a deal which covers routes from Australia to Europe, New Zealand and Asia. 3:21pm: The banks are reporting very comfortable bad and doubtful debt positions. Westpac in particular is comfortably geared, writes BusinessDay's Malcolm Maiden. Several global measures are being rolled out under the auspices of the Basel 3 banking regime, to insure bank balance sheets against the risk of another global bushfire like the crisis of 2008 and 2009. Some investors sold bank shares last week on speculation that the big four "domestically systemically important banks" (DSIBs) would need to build capital overlays equal to up to 1.5 per cent of their risk-weighted assets, and on reports that banking regulator APRA had warned them to preserve capital while the details were being worked out. Westpac nevertheless boosted its regular dividend for the year by 5 per cent to 174 cents a share with a final payout of 88 cents a share on Monday morning, and followed its interim special dividend of 10 cents a share with a 10 cent-a-share final special dividend. 3:08pm: The ownership tussle over the Westfield Innaloo shopping centre, in Perth, has ended with the Charter Hall Group saying the put option agreement to acquire the mall and adjoining Shoppers Village, has been terminated by the joint owners of the mall, Westfield Group and Westfield Retail Trust. Transaction costs incurred by Charter Hall and its capital partner have been recovered through the payment of a put option fee by Westfield. The deal, which was first announced to the market on September 11, was very complicated and was initially predicated on Westfield selling its remaining 33 per cent stake in another Perth Mall at Karrinyup, which it did in late in September to UniSuper for $246 million. But with the termination of the deal with Charter Hall, it is now expected Westfield will look to redevelop the Innaloo centre. 2:53pm: The passing of the federal election in September has not encouraged consumers to spend more says retailer Harvey Norman. The company says it hasn't seen a boost to consumer spending since the federal election but looks forward to a good Christmas trading period. Harvey Norman says its global sales, excluding Singapore, for the three months to the end of September rose 2.7 per cent to 1.37 billion dollars, compared to the corresponding period one year earlier. Sales in Australia rose 1.2 per cent. Harvey Norman shares are 1.6 per cent higher at $3.28. 2:37pm: BusinessDay's Michael Pascoe has taken a deeper look at today's retail figures: At first glance, the Abbott honeymoon or normal post-election surge certainly shines through in the September retail sales statistics - a better performance on all measures than the tipsters were expecting. It looks like it wasn't just David Jones customers who came out buying. But as an Australian Bureau of Statistics feature published with the numbers points out, retail sales aren't the guide to consumption growth that they used to be. And department stores are no guide to overall retail performance, let along household consumption. As the ABS points out, retail trade estimates historically contributed 55 to 60 per cent of household final consumption expenditure. Now it's only about 30 per cent as households spend a greater proportion of their income on services. Unfortunately there's a generation of commentators, not least from the retail industry itself, who are yet to adjust their perspective. We're all shoppers so retail news makes headlines, but it doesn't mean as much as it used to. Shrinking share of consumption. 2:22pm: Sydney's property market isn't the only one heating up. China's southern city of Shenzhen will raise minimum down payments on second home purchases to 70 per cent from 60 per cent, the official China Securities Journal reported on Saturday, the latest local move to curb property prices. Many Chinese cities are seeing record home prices, adding to the risk of a property bubble in the world's second largest economy. Home prices in Shenzhen, which rose 19.7 per cent in September from a year earlier, are among the highest. Shenzhen's move came after Beijing, the capital, tightened measures last month while vowing to boost supply for middle-income families and punish property speculators. The new rule in Shenzhen will take effect on Wednesday and apply to home buyers who want to take mortgages from banks, the newspaper quoted unnamed banking sources in Shenzhen as saying. Banks will also tighten mortgage regulations to ensure that speculators are not granted loans, the paper said. Most second-home buyers in Chinese cities have been required to make down payments of at least 60 per cent since 2011. Beijing raised the down payments to 70 per cent in April. 2:13pm: A study by the Federal Chamber of Automotive Industries says that killing off car manufacturing in Australia would lead to a $21.5 billion hit to the economy. And Australia's GDP would be $7.3 billion smaller, or 0.6 per cent of total GDP. 2:09pm: Here's a bit more analysis from economists on the spate of data released today: Paul Bloxham and Adam Richardson, HSBC: Retail spending is lifting, supported by rising housing and other asset prices, as well as improving confidence. We expect that the RBA will not need to cut rates further. George Tharenou, UBS: Positively, the pick-up of retail sales in September provides an early sign that record low interest rates, combined with rising household wealth, are leading to better consumption growth (which we expect to be evident over the year ahead). Meanwhile, flat job ads suggest that leading indicators of the labour market are stabilising, albeit still not yet pointing to a recovery ahead. Annette Beacher, TD Securities: After a year of decelerating growth, this report reveals a clear turnaround in activity, and will be welcomed by the RBA as a fresh source of 'non-mining' growth. ... The missing puzzle piece is non-mining investment, and we await the September quarter survey on November 28. 1:46pm: The federal opposition is putting an upswing in business confidence at risk by not supporting the government's repeal of the carbon tax, a leading business group says. New data from the Australian Chamber of Commerce and Industry (ACCI) shows that while business confidence has strengthened since the federal election, actual trading conditions remain weak. ""General business conditions within the economy are still quite challenging,"" ACCI acting chief economist Burchell Wilson told reporters in Canberra on Monday. As such, it makes the improvement in sentiment fragile. ACCI's business expectations survey for the September quarter showed its general business conditions index mired at 42.8 points, and well below the 50 point mark that separates expansion from contraction. In the June quarter the index was 42.9 points. Sales indicators have now fallen for six consecutive quarters, selling prices reached their lowest level in the survey's 19-year history and profits slumped to a four-year low. However, expectations rose for all components with general business conditions expected to rise to 53.2 points in the December quarter. 1:36pm: Australia's economic indicators are all falling into place, says Peter Martin, adding that an interest rate cut tomorrow is unlikely: The rosiest picture in years Australia's economic indicators are all falling into place, says Peter Martin, adding that an interest rate cut on Tuesday is unlikely. PT3M45S http://www.smh.com.au/action/externalEmbeddedPlayer?id=d-2ww8x 620 349 November 4, 2013 - 2:07PM 1:29pm: Share prices in some of Australia's biggest retailers have been boosted by the better-than-expected September retail trade data released today. David Jones shares at up 4.83 per cent to $3.04, while Myer stocks have risen 2.8 per cent to $2.57. JB Hi Fi shares have gained 2.07 per cent to trade at $21.66. And Harvey Norman has risen 2.01 per cent to $3.295. While there's some optimism in the market on the retail sales data, the figures are from September and it is not clear if the boost in spending will continue into October. Harvey Norman, in its September quarter sales figures released today, said at the bottom of its report that "we have not seen a boost to consumer spending post the federal election but look forward to a good Christmas trading period." 1:19pm: Coles has paid $1 to officially become the owner of a $40 million Sydney supermarket leased to arch rival Woolworths, after it was caught using an elaborate tax-haven structure to conceal its identity as the owner. The supermarket company has defended its actions as a "common" industry practice, dismissing as a "conspiracy theory" questions about the use of an offshore company to secretly act on its behalf. Land title records show Coles paid $1 at the start of the financial year to formally take ownership of the property, rather than holding it at arm's length via an agent and trustee, Sino Ace Investment Pty, a company ultimately controlled by an entity registered in the British Virgin Islands. Fairfax Media has previously revealed Coles used a labyrinthine corporate structure to conceal its involvement in the purchase transaction, blindsiding Woolworths to become the landlord of the 4282 square metre supermarket site in Neutral Bay. The Grosvenor Street outlet is one of Woolworths' best-performing supermarkets in the country. 1:08pm: A fascinating yarn for your lunchtime from today's paper about a Chinese tycoon who has bought a $20 million+ property in Toorak. Wang Hua is China's 790th richest person and is embroiled in a Supreme Court battle with a former business partner, 'Sunny' Sun, over a Victorian golf course. He alleges that Mr Wang regularly flies into Australia with suitcases of cash on board a private jet. 12:59pm: Here's a break down of the September retail sales data. Spending at department stores rose a seasonally adjusted 2.8 per cent in September, while clothing sales rose by 2.5 per cent. Consumers also forked out for pharmaceuticals, cosmetic and toiletries, with spending growing by 3.1 per cent for the month. Cafes and takeaway foods was boosted by 0.6 per cent. In contrast, spending on household goods fell by 0.4 per cent. In terms of states and territories, spending rose across the board in September except in mining powerhouse Western Australia, where sales fell by a seasonally adjusted 0.3 per cent in volume terms. Spending rose by 1.2 per cent in Victoria, 2 per cent in South Australia and 0.4 per cent in Queensland. Sales also rose 0.3 per cent in NSW, 2.5 per cent in Tasmania, 4.3 per cent in the Northern Territory and 0.2 per cent in the ACT. Retail 12:41pm: More than $100 million of neighbourhood shopping centres have changed hands in the past two months as investors target higher-yielding bricks and mortar. The grocery-based non-discretionary centres remain the preferred property in the retail sector as they are less vulnerable to the vagaries of consumer sentiment. According to the retail sales data for September, it showed that general groceries were stronger, despite the volatility of fruit and vegetables. In the latest deal, the wholesale Australian Property Opportunities Fund (APOF) has bought two prime neighbourhood shopping centre investments, Lynbrook Village Shopping Centre in south-east Melbourne and Lake Innes Village in Port Macquarie, for a combined purchase price of $47.35 million. 12:29pm: Retail sales growth has ticked up a fair bit in the past months, coming in sync with the better consumer confidence numbers of late, says JPMorgan economist Ben Jarman: Department store sales have been the clear outperformer for the last couple of months but that was after they essentially tanked in July, so we think it's coming back after a bit of a distortion at mid-year. But we're still a bit skeptical that you can see much of an uplift when labour income growth has been so weak, the hiring side of things has been so poor for so long, so we're a little bit skeptical about whether this can be sustained. The Reserve Bank is likely to be happy with the improvement in retail sales in September, says Barclays' chief economist Kieran Davies. At the same time, he says the central bank would be fairly relaxed about the rise in house prices for the third quarter, although its board would be keeping an eye on the property market amid fears that a sharp lift in prices could trigger a bubble: Retail sales have been pretty sluggish for most of this year. This is the best result since February. I think the RBA will be quite pleased. It's better than what some of the anecdotes are suggesting. You've seen a pick-up in the housing market and retail sales are finally showing some signs of life, so I think the RBA would be quite happy that we're seeing a lift in consumer spending after all this time. JPMorgan economist Tom Kennedy says the housing data shows just how much prices are on the rise, especially in Sydney: In the nation's largest property market, things really are starting to heat up. A big part of the Reserve Bank story is that they've been trying to revive the construction sector so I think the big uptick we've seen in prices definitely is supportive of that, as higher prices encourage activity and investment. 12:10pm: Here's a bit more from the Bureau of Statistics on the third-quarter figures for house prices: "This is the first time since 2010 that the capital city average has shown four consecutive quarters of growth year on year," the Bureau of Statistics' Robin Ashburn said. Sydney recorded the strongest growth at 3.6 per cent for the September quarter. Melbourne prices rose by 1.9 per cent, Hobart by 1.4 per cent, and Brisbane by 1.2 per cent. House prices also lifted by 0.2 per cent in Perth and 0.4 per cent in Darwin for the September quarter. 12:01pm: Whitehaven Coal is currently not looking to raise equity, its chairman said at the AGM in response to speculation the miner may need to raise funds in the face of weak coal prices and delays on its biggest project. "We are not looking at a placement or any capital raising in the equity markets at the moment," chairman Mark Vaile told shareholders. He said the company's development pipeline was fully funded from its local banking syndicate, which has provided $1.2 billion in project financing. 11:56am: Surging power prices have resulted in NSW government-owned electricity companies emerging as among the most profitable companies in Australia, as they boosted profits 50 per cent in the year to June. Figures released by the NSW Audit Office show that the state government's electricity companies boosted their combined profit to $1.54 billion in the year to June, up from $1.03 billion a year earlier. This includes the electricity distributors which have been big spenders on new equipment over the past several years, triggering a heavy round of power price rises - and a public backlash which has resulted in lower electricity usage. Their high profits pushed their return on equity to 15.2 per cent from 10.7 per cent, which is well ahead of most ASX-listed industrial companies which earn closer to 10 per cent. 11:55am: Westpac boss Gail Kelly has played down the fast growth in lending to self-managed super funds investing in real estate, saying banks apply cautious standards in the sector. The Reserve Bank has warned that the growth in SMSF investment in property could threaten financial stability by opening up another avenue for speculative investment. But Mrs Kelly today said the amount of lending to SMSFs was small in absolute terms, and banks applied tougher tests when they were approving these loans. It's off a small base. We've got less than $3 billion in SMSF," Mrs Kelly said this morning. There are a range of additional requirements for lending in that vehicle. 11:46am: Troubled surfwear and streetwear retailer Billabong announced this morning that $US300 million in funding from its new private equity partners, Centrebridge Partners and Oaktree Capital, had been received and used to repay a bridging facility. Meanwhile a convoluted and complex musical chairs manoeuvre within the Billabong boardroom will see three directors step down, two directors appointed and a third director who was intending to leave actually now stay. Billabong, which has been in desperate need of a cash injection following billions of dollars in losses and writedowns in the face of a slump in sales and profits, also said this morning in a statement to the Australian Securities Exchange that has agreed to sell its Canadian retail chain West 49 to YM Inc for between $CAD9 million and $CAD11 million. Shares in Billabong are 0.75 per cent lower to 39.7 cents. 11:42am: Australian capital city house prices rose 1.9 per cent in the September quarter, official data showed. That followed a rise of 2.7 per cent in the June quarter.In the year to September, the house price index rose 7.6 per cent, the Australian Bureau of Statistics said on Monday. Economists had expected a rise of 2.2 per cent for the September quarter. 11:35am: Job advertisements slipped by 0.1 per cent in October after a 0.2 per cent gain the month before, a private forward indicator for employment has found. The monthly ANZ job ads survey, released this morning, found that job ads were 12 per cent lower than a year ago. But the declining trend in ads has slowed to minus 0.5 per cent month-on-month. 11:31am: The latest retail figures suggest we are beginning to open our wallets. Australian retail spending rose by 0.8 per cent in September as third-quarter sales lifted by 0.7 per cent. Economists were expecting a 0.4 per cent rise for September and a 0.2 per cent gain for the third-quarter. The sales growth followed a 0.4 per cent lift in August and a flat second-quarter.