THE Australian market looks set to open modestly higher, following Wall Street’s positive lead as international tech stocks regrouped and investors anticipated an interest rate rise from the US central bank. At 0700 AEST on Wednesday, the share price futures index was up seven points, or 0.12 per cent, at 5,789.

Meanwhile, the Australian dollar is lower against its US counterpart amid a sharp fall in the price of iron ore. The local currency was trading at 75.37 US cents at 0700 AEST on Wednesday, from 75.50 on Tuesday.

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WASHINGTON — US inflation at the wholesale level stayed unchanged in May as food and energy prices slipped.

WASHINGTON — US senators have reached agreement on a new package of sanctions on Russia amid the firestorm over Russia’s meddling in the presidential election

WASHINGTON — The United States is weighing sanctions on countries doing business with North Korea and looking for ways to revive strained relations with Russia, US Secretary of State Rex Tillerson says.

WASHINGTON — US Secretary of State Rex Tillerson says Cuba “must begin to address human rights challenges” if it wants Washington to move toward more normal relations started under former President Barack Obama.

LONDON — House price growth in London has accelerated for the first time in nearly a year, according to an official index.

NEW YORK — Time Inc is eliminating 300 positions, or four per cent of its workforce, through lay-offs and buyouts, according to an internal memo seen by Reuters.

SAN FRANCISCO — Uber boss Travis Kalanick will take a leave of absence for an unspecified period and let his leadership team run the troubled ride-hailing company while he’s gone.


TEN — Ten Network directors have been urged not to “rush prematurely into administration” after billionaire shareholders Lachlan Murdoch and Bruce Gordon refused to back a new funding deal for the loss-making commercial free-to-air broadcaster.

CROWN — The Crown Resorts employees detained in China have all been charged with the illegal promotion of gambling on the Chinese mainland.

BELLAMYS — Infant formula supplier Bellamy’s will raise $60.4 million through a new issue of shares and acquire a canning facility that the company hopes will help improve margins and satisfy Chinese regulatory demands.

RIO TINTO — China’s Yancoal is waiting for Rio Tinto to make a determination on Glencore’s late offer for the global miner’s NSW energy coal operations before deciding whether to engage in a bidding war.

CSL — CSL has secured a foothold in the world’s fastest growing plasma therapeutics market with a $US352 million ($A466 million) stake in Chinese biotech Ruide.

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SUPER RETAIL — Robert Wright will step down as chairman of sports, auto and camping goods retailer Super Retail Group, after eight years in the role.

SPRINT — Phone and internet provider Sprint Telco has been fined $10,800 for allegedly tricking a consumer into believing it was an agent for Telstra and transferring them to its own service.

FARMERS — Farmers are feeling better about the year ahead as they fetch high prices for lamb, mutton, wool and beef.

GLOBAL credit ratings agency Standard & Poor’s has downgraded the ratings of 23 Australian finance institutions, warning the risk of a “sharp correction” in home prices has increased.

The agency has slashed its rating on finance industry heavyweights including wealth manager AMP and second-tier mortgage lenders Bendigo & Adelaide Bank and Bank of Queensland.

While it has spared the nation’s big four banks in the sweeping downgrade, the S&P says it still has a negative outlook on the lending giants.

Analysts at the agency said they were concerned about a strong build-up in private sector debt over the past four years as well as the latest surge in property prices, especially in Melbourne and Sydney.

Melbourne prices have climbed 15.3 per cent in the year to April with the median price now at $650,000, while Sydney has increased 16 per cent, according to figures from CoreLogic.


S&P forecasts that by the end of next month, private sector debt in Australiawill have increased to about 136 per cent of economic output, measured by gross domestic product.

That compares with 117 per cent just four years ago.

“Consequently, we believe the risk of a sharp correction in property priceshas increased,” S&P wrote in note for investors.

“We consider that if this downside scenario were to occur, all financial institutions operating in Australia are likely to incur significantly greater credit losses than at present.”

The negative effects would be “amplified” by the nation’s persistent current account deficits and large amounts of offshore debt, it added.

However, S&P said the outlook for the banking sector remained “relatively benign by global standards”.

Efforts by regulators to tighten riskier lending practices should help slow the pace of house price growth or even result in a mild drop in prices over the next two years.

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AMP was downgraded from A+ to A, while both Bendigo & Adelaide Bank and BoQ were trimmed from A- to BBB+.

The move strips away a prized rating BoQ first attained in 2013, which the bank at the time said would increase both opportunities for funding and reduce its cost.

But the Queensland lender on Monday argued that rating drop had struck despite a “significantly lower level of exposure to the Sydney and Melbourneproperty markets than many other industry participants”.

The 190-branch lender further arced up about an anticipated “too big to fail” Government benefit received by its Big Four rivals. S&P kept credit ratings on the major banks untouched, saying it reflected “our expectation of likely timely financial support from the Federal government”.

BoQ argued this meant with its own rating falling, the “two notches of government support for these institutions has increased to three notches of benefit”.

However fellow Queensland institution Suncorp, whose bank has the benefit of being part of a big insurance business, remained an A+ rating.

Other institutions to cop a one-notch downgrade included Auswide Bank, Credit Union Australia, Defence Bank, Mecu, Members Equity, Rural Bank and Teachers Mutual Bank.

It is a fresh blow for the nation’s second-tier lenders in particular.

Those lenders are hoping to claw back market share from the majors as customers jump ship to avoid any potential fallout from the $6.2 billion levy — announced in the federal Budget this month — to be imposed on the nation’s five biggest banks.

Separately, S&P reaffirmed its ratings on Australia’s fifth biggest lender, Macquarie Bank, which is subject to the new bank tax alongside the Commonwealth Bank, Westpac, ANZ and National Australia Bank.

The ratings agency has upgraded its outlook on Macquarie’s investment bank parent, Macquarie Group, from negative to stable, leaving its rating at BBB — two notches above “junk” status.


S&P has consistently maintained that the nation’s four biggest banks could be expected to be bailed out by the government in the event of any large-scale financial crisis, meaning their credit ratings would move in concert with that of the sovereign.

The agency affirmed Australia’s triple-A credit rating last week, but pointedly maintained its negative outlook, meaning the nation remains at risk of a downgrade in just over a year.

All four big banks carry a AA- long-term rating and the same negative outlook afforded to the Australia.

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WESFARMERS’ new managing director will be paid as much as $4 million less than outgoing chief Richard Goyder when he steps into the top job in November.

But Rob Scott, an Olympic medallist, will still be eligible for a pay and perks pool worth $10 million — about $27,400 every day of the year.

Wesfarmers, the parent company of retail heavyweights including Coles, Kmart and Bunnings, has revealed Mr Scott will receive a base salary of $2.5 million.

That compares with $3.5 million for Mr Goyder, his long-serving predecessor, who is now chairman of the AFL Commission.

Mr Scott’s potential bonus pool has been set at $7.5 million, almost 30 per cent less than the $10.5 million for Mr Goyder.

“We recognise changes in the market that have seen downward pressure on fixed pay levels for CEOs and reductions in overall reward opportunities,” Wesfarmers chairman Michael Chaney said today.

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Mr Chaney said the board and Mr Scott had “discussed and recognised the expectations of Wesfarmers’ many stakeholders regarding the remuneration levels of senior executives”.

They believed “this package and those of other senior executives in the group are appropriate and in line with contemporary market practice of peers”, he said.

Mr Scott, who won a silver medal in rowing at the 1996 Atlanta Games, had worked at Wesfarmers in 1993 before becoming an investment banker.

He returned to the company in 2004, climbing the corporate ladder to lead its insurance arm, then Coles’ finance division followed by managing director of the industrials division.

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The 47-year-old has also started shaking up the company’s executive leadership in preparation for his ascension.

Chief financial officer Terry Bowen will step down later this year after more than 20 years at Wesfarmers, including eights years as CFO, to chase opportunities elsewhere.


He will be replaced by the group’s current boss of its industrials division, Anthony Gianotti.

David Baxby will take over the industrials division in August, while Bunnings Australia and New Zealand managing director Michael Schneider has been promoted to lead the hardware chain worldwide.

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