Westfield has managed to again to ride out the credit crunch and economic slump in the US, UK, Australia and New Zealand that has ensnared its peers in the property sector.That's despite distinct slowdowns in retail spending in the US, UK and New Zealand markets, and the gathering slump in Australia.And in a bit of corporate bottom fishing it has emerged with a 2.96% stake in rival UK shopping centre owner, Liberty International, where the Simon property group from the US (a big rival there to Westfield) has snapped up a 4.2% stake.Liberty's shares have fallen sharply this year as it has cut values on its UK shopping centres because of falling property values and declining retail sales.So far Westfield, with one centre open and another big one in London to open in October, has avoided write-downs because of the UK slump.Westfield said the Liberty stake was acquired & quot;for investment purposes'' but that's what it said when it grabbed 5% of GPT in 2005 and frustrated an offer for its rival from Lend Lease (which used to control GPT years ago). Lowy sold out after Lend Lease failed and picked up valuable interest in a couple of Australian shopping centres.It could very well be aiming to do that in any assault on Liberty by Simon: Liberty has major centres in London and in some regional centres.It would be a very cheap way for Westfield to grow in the UK where the Westfield London is due to open in October and Westfield Stratford (next to the 2012 Olympic Games site) in 2011. It has a big centre open in Derby in the north.Liberty is the biggest shopping centre owner in Britain.The way retail sales are slowing in its major markets, Westfield might need a boost from the injection of new centres over the next year.But it does have over & #36;7 billion in liquid reserves to support any activity, as well as its big development plan which will see work start on the multi-billion dollar revamp of Sydney's Pitt Street Mall area later in the year.Westfield said it had a 14% rise in first-half operating earnings for 2008, thanks mainly to rental growth in Australia.It said that operating earnings for the six months ended 30 June 2008 were & #36;928 million, up 14.7% from the & #36;844 million in the first half of 2007.The group, which has 118 shopping centres in Australia, New Zealand, the United States and Britain, also reaffirmed it would pay a full-year distribution of 106.5 cents this year, with an interim payout of more than 53 cents a security. & quot;The amount available for distribution for the six months, arising from operational segment earnings and related income hedging, was & #36;1,036 million of which & #36;1,033 million will be distributed, representing 53.25 cents per security, & quot; the company said yesterday.Including asset revaluations of & #36;345 million (down from & #36;902 million in the first half of 2007), net profit was & #36;1.285 billion, down 35% on the & #36;1.9 billion in total in the first half of 2007 because of the sharp fall in those revaluations.The company said most of the higher valuations came in Australia and offset falls in NZ and the US.Australia was the highlight, with retail sales from stores open more than a year up 5.6%, but there was a noticeable slowing in the six months to June and in the last month of the half, Westfield noted.Growth the 6 months slowed to an annual rate of 4.9% and in the June quarter, it slowed again to 4.4%, with a sharp fall in sales growth for major retailers (such as Coles, Woolworths, Myer and David Jones).In contrast, comparable store sales fell 1.9% in the United States and dipped 0.2% in New Zealand in the six months to June. UK sales also eased, although London was firm for most of the year.Unlike most of Australia's listed property real estate investment trusts (REITs), Westfield is trading above its net tangible asset backing. Its shares have fallen 20% so far this year, outperforming a 33% slide in the A-REIT index which it dominates.Westfield securities traded at & #36;16.10 at the close yesterday, down 56 cents, or 3.3%, after being as high as & #36;16.95.

Not a word about the outlook for 2009, The management of GPT is still too busy dealing with the realities of 2008 and the damage done by the credit crunch.The 2008 distribution is being slashed by a third, and the shares have fallen by around 70%; there was a lot of chat in the comments about the new, conservative outlook, but nothing substantive on what distributions might look like in 2009.GPT's net loss for the six months ended June 30 was & #36;67.7 million, compared to a profit of & #36;737.1 million in the previous corresponding period. The loss was after hundreds of millions of dollars of write-downs in asset and investment values.For the full year, it has forecast operating income of & #36;464 million, down from & #36;605.1 million in 2007. It's expected earnings per share (EPS) for the year is 21.2 cents, and its distribution per security guidance is 20 cents.GPT securities finished off 1.5 cents at & #36;1.685.But not a word about 2009.At least Stockland, a housing and shipping centre developer and operator reckons it will boost its distribution next year by 1%.The bleat from GPT was predictable about going back to basics. But then that's what we have heard from a long list of engineered finance and property groups, from Stockland, Centro, Allco, to Mirvac and Valad on Tuesday and from Babcock and Brown, Macquarie Group's satellites and any number of easy money riders. & quot;GPT is currently trading at a discount to NTA of approximately 50%, which we regard as unsustainable given the quality of GPT's underlying asset base.The initiatives outlined today, while likely to take some time to execute, are consistent with the objective of GPT's management team and Board of pursuing a strategic direction that will deliver long-term value for securityholders, & quot; CEO Nick Lyons said in the company's interim earnings report, & quot; & #160;In summing up GPT's future strategic direction and the underlying rationale, Mr. Lyons said: & quot;The strategic initiatives outlined today will result in a simplified business focusing on the ownership, management and development of high quality Australian real estate, and a more conservative financial structure reflective of the current environment and appropriate for this business model moving forward. & quot;The quality of GPT's underlying asset base and revenue streams will be significantly enhanced, but will remain suitably diversified by asset class, revenue source and capital source to provide resilience throughout the real estate cycle. & quot;As the initiatives are progressed, we believe that we will see GPT's underlying value emerge and GPT well-positioned with good growth prospects moving forward. & quot; & quot;GPT remains a business that still expects to generate nearly half a billion dollars in realised operating income this year, and remains in a strong financial position with balance sheet gearing of 37%, and no recourse to GPT for debt within GPT's funds (including the Joint Venture Fund). & quot;We have approximately & #36;14 billion of assets including an irreplaceable, diversified portfolio of high quality Australian real estate. & quot;There's a sense of wonderment at what happened and how all the grand designs were brought down as leveraged and risk returned as corporate no-nos and the cost of money ballooned.Now economies in the US, Europe and Australia are declining, adding further pressure to stretched groups like GPT which is trying to regain its poise.It's a rediscovery of the joys and benefits of being a 'simple' business, without complexity: This after making itself very opaque and complex with the help of the geniuses of Babcock and Brown and its discredited management.Like so many Australian companies who rode the easy money trail, and came a cropper, there's a lot of mea culpas and hair shirts at GPT, but few apologies to investors for seeing the value of their holdings destroyed as the companies stood too long and waited for the credit crunch train to run them over.Before the 2005 takeover battle between Lend Lease, Westfield (how the ASX ever allowed its involvement) and the management of GPT and the bright sparks at Babcock And Brown BNB GPT was a safe, boring company, well regarded, with some of the best shopping centre, office building and other assets in the country.It was a contender with Westfield for its security and performance as a shopping centre operator and all of those advantages and values were abandoned for the 'synergies' of joint ventures in Europe with Babcock and Brown) and in the US with a company called Benchmark, and for a whole lot of other poor calls.For all Westfield's reluctance to face up to the collapse of the UK property market (except to stark stalking the rival Liberty group), the Lowy run company has emerged as a 'winner' from the crunching of the financial engineers, and GPT could have been there beside it.In its profit announcement this morning, GPT management talked a lot about getting back to basics and to a simpler structure.There was an operating profit, and like its peers, an unfortunate loss to quickly paper over. & quot;Realised operating income for the half-year to 30 June 2008 of & #36;234 million, full-year guidance of & #36;464 million confirmed & quot;Statutory loss for the six months to 30 June 2008 of & #36;68 million, primarily as a result of non-cash adjustments: & quot; & #36;122 million write-down of goodwill associated with GPT Halverton; and - & #36;222 million (1.5%) net reduction in asset valuations (primarily relating to Hotel/Tourism, the Joint Venture Fund and warehoused assets) & quot;Cash distributions of 11.4 cents per security for the six months to 30 June 2008. Which you had to then read deeper into the report to find this was a 20% drop on the 14.3 cents distributed back when the hay was being made in the pre-crunch days of the first half of 2007.That means full year distribution will be cut to 20 cents, compared to 29.2 cents in 2007, with the company keeping its development profits to help finance growth and not paying them out to boost returns and make the business look better than it was. Distributions will be based on operating performance.Headline gearing (37.3%) and look-through gearing (46.7%) remain within policy rangesLiquidity position remains comfortable ( & #36;1.1 billion of funding required over the next 12 months covered by & #36;1.4 billion of cash and other committed funding sources)Revised distribution policy and underwritten DRP to provide additional financing flexibility whilst non-core asset sale program is progressedSimplified strategy focused on high quality Australian real estate, with traditional rental streams from property ownership complemented by development and funds management capabilities and earnings streams not available to GPT pre-internalisation.Strategic focus on core domestic operations to be reinforced by & #36;1.7 billion non-core asset sale program (Hotel/Tourism, Homemaker, warehoused assets), potential exit from US Seniors and the expected orderly realisation of the Joint Venture Fund from December 2009 No wonder the shares trade around & #36;1.66, less than a third the 52 week high of & #36;5.11.It's all so easy to see now for the likes of GPT. Back to basics and the good old days of being boring. Just like Mirvac, and Fosters, if you think about. it's all about wrong strategies and poor management making. & #160; & #160;

Even the clever market players are being caught by the credit crunch and slowdown.Players like Sir Ron Brierley's Guinness Peat Group, which is his third investment vehicle after Brierley Investments in NZ and Industrial Equity in Australia.Sir Ron isn't a financial engineer like Allco or GPT or Mirvac (since reformed). He and his band of market players are old fashioned stock pickers, asset raiders and finders of value.Normally the current market should be one where players like him find value, but the credit crunch has not been discriminating: anyone with leverage in their business model or asset plays have been hit.GPG was bitten and bitten badly in the June half, according to a statement yesterday.In fact it was the first half in 37 half year reporting periods where there wasn't a successive increase in assets from one half to the next.GPG reported a first-half net loss of 42 million pounds ( & #36;90.4 million), compared with a net profit of 94 million pounds ( & #36;202.32 million) in the first half of 2007.The company's biggest investment, its wholly owned industrial threads business Coats Group, also suffered from deteriorating economic conditions thanks in particular to a sustained downturn in the European crafts market.Guinness Peat spent 226.1 million pounds to take full control of Coats - the world's biggest supplier of threads and craft material - which makes up a third of its investment portfolio.Coats generated a profit of just & #36;US4.4 million ( & #36;5.17 million) for the June half, down sharply from the & #36;US24.7 million earned in the same period of 2007.Sir Ron, who is Guinness Peat chairman, said his commentary that the group had produced a & quot;rather poor & quot; result for the half year to June 30, 2008.He said on the positive side the company, which controls an equities portfolio worth more than 1.181 billion pounds, recorded a profit of 15 million pounds from normal trading sources and sales of shares.However, there were also share portfolio write-downs of 35 million pounds, hence producing an overall loss for the period of 20 million pounds.Sir Ron said there was also a deferred tax adjustment of 22 million which he described as & quot;purely IFRS nonsense & quot;.But Sir Ron was upfront about what caused the damage. & quot;GPG's portfolio has not been immune from the worldwide sharemarket shakeout and to that extent, we believe most of those losses will be recovered and more. & quot;The majority of GPG's investments are sound strategic long term holdings where we are confident of intrinsic value regardless of share price fluctuations, & quot; he said.Sir Ron said there were some instances of & quot;arguably misplaced investment judgement' where prospects of recovery were more remote and where cost exceeded market value. & quot;We will review those again on a full year basis at 31 December next, & quot; Sir Ron said.The company had absorbed large losses in recent years from Capral Aluminium which had not been a success for GPG, Sir Ron said. & quot;However, we are now supporting yet another equity issue in the hope/expectation that the inevitable changes in the company's trading environment are looming ever closer and our faith will be finally rewarded. & quot;No interim dividend was declared, in keeping with last year. & quot;Coats' core manufacturing business held up well but losses in European crafts (where vigorous remedial action is underway), costs of refinancing (an important milestone for Coats) and higher forex charges, all impacted on the bottom line. & quot;An important advantage which GPG retains in the present financial climate is a strong, conservatively presented balance sheet and good liquidity (which has been further augmented since balance date). That is supported by substantial undrawn credit lines so GPG is well placed for selective buying opportunities. & quot;Nevertheless, we are far from complacent and proceed with caution in the present climate, & quot; he added.And to tease shareholders and other players with the energy to read the GPG accounts, Sir Ron had this promise about the next couple of years: & quot;The Board is working towards a substantial release of value to shareholders in 2010 which will coincide with GPG's 20th anniversary and my own retirement as Chairman of the company. & quot;GPG shares lost 4 cents yesterday in Australia to close at & #36;1.13. & #160;

Woodside cracked the billion dollar profit mark for the first time in the June 30 half as it rode oil and gas price higher and higher.The company will get several weeks of high prices in the current half and even the current lowered price of around & #36;US112- & #36;US117 a barrel, these prices are still higher than they were in the second half of last year.World prices edged higher yesterday and overnight on fears about a new storm in the US and the latest figures on US oil and gas stocks.The company's share price reflected the rise in world prices and the solid interim result, rising & #36;1.92 to & #36;58.42.It will also get a boost from higher production, especially from its fields offshore the WA coast.Shareholders will be rewarded with a sharply higher interim dividend of 80 cents a share (fully franked), compared to the 49 cents a share paid for the first half of 2007.Higher production helped as well and the company's net profit of & #36;1.016 million represented a return on sales of & #36;2.6 billion, up 45%) of around 42%.The interim profit compares very favourably with the & #36;610.1 million reported in the first half of 2007.The result includes significant items relating to a gain on the sale of Pluto equity interests of & #36;19 million and a loss of & #36;12 million from the sale of producing assets in the US.Underlying net profit for the six months to June 30 was & #36;1.009 billion compared with & #36;545 million in the same period last year.Production rose to 36.5 million barrels of oil equivalent (Mmboe) in the six months, from the 35 Mmboe in the previous corresponding period.Woodside expects higher output from re-drills of its Enfield oil and gas project near Exmouth in Western Australia, and additional oil equity in the North West Shelf Venture near Karratha following the purchase of Shell's 16.7% interest in the Cossack Wanaea Lambert Hermes operations.It also said new production from Vincent, Angel, North West Shelf Train 5, Neptune and Power Play projects would contribute to a lift in production in the second half. & quot;Consequently Woodside is on track to achieve its 2008 production target of 80 to 86 MMboe, & quot; the company told the ASX.The company is starting work on the nearby Pluto LNG project while development concepts for Pluto Train 2 are progressing. & #160;And it's also pushing ahead with development plans for the Sunrise natural gas project, which straddles a boundary between Australian waters and a region jointly administered by East Timor and Australia, and its remote Browse Basin LNG project north-west of Broome.Woodside said its increased profit was driven by stronger production and higher commodity prices, which outweighed the negative impact of the strong Australian dollar and increased production costs.The lift in production costs was primarily due to the start up the Stybarrow oilfield in the Exmouth Sub-Basin and intervention work on the nearby Enfield project.Woodside said it continues to consider & quot;a range of options in relation to its remaining African assets'' after divesting its underperforming Mauritanian operations last year.During the first half, the company exited Kenya and took up a 20% interest in a block onshore Peru. & #160;

On Tuesday Transpacific Industries Group (TPI) told the markets that 91% of the banks involved in a & #36;300 million-plus tranche of credit had signalled their willingness to extend it for a year from this December.Given the credit crunch's impact and the growing reluctance of the banks to lend, that was a vote of confidence, especially as TPI had only updated the market in June on this tranche, its possible size and what it wanted.It said in Tuesday's statement that the banks had seen the provisional 2008 results and projections for the subsequent years and executive chairman Terry Peabody said thanks.Yesterday TPI released those results to the market and yet investors were a bit cool.The shares fell 25 cents to & #36;6.95, well above the & #36;5.77 low but well down from the & #36;11.78 high.On the face of it the figures were more than solid; annual profit up 70% and says it expectations of achieving double digit growth this financial year.Net profit for the year to June 30 rose to & #36;175.25 million, from & #36;103.06 million, after sales revenue rose 70% to & #36;2.20 billion.Underlying earnings before interest, tax, depreciation and amortisation was up 79% at & #36;541 million.Transpacific said its result was boosted by the successful integration of acquisitions, including Cleanaway group from Brambles. & quot;Transpacific is the market leader and well positioned for solid organic growth with significant new initiatives underway, & quot; it said. & quot;Previous group organic growth targets remain - we expect to achieve double digit growth for fiscal 2009. & quot;The company said it would achieve that growth (it didn't indicate what double digit growth meant) by using & quot; Operating cash flows to be used to repay debt; excess land assets to be developed as opportunities arise (e.g. Tullamarine Landfill); TPI footprint and presence established - Continued focus on organic growth and expansion of all services; strategic focus on Recycling and Environmental Services.The & quot;impact of increased fuel prices offset by price rises/levies and Energy Division oil sales; NZ business benefiting from organic; expansion and recent new tender wins; previous group organic growth targets remain & #160; & quot;We expect to achieve double digit growth for FY09; investigation and development of international market opportunities via strategic alliances; focus on profitable strategic and synergistic acquisitions (Funded by Equity where possible); continued focus on cold starts where opportunities arise; forecast interest rate decreases will assist NPAT growth. & quot;Transpacific declared a final dividend of 10.1 cents, up from 6.7 cents in the previous corresponding period, taking the total for the year to 18.1 cents.

The market is down 20. That comes on the back of a 27 point rise on Wall St and a 6 point rise in Futures this morning. Pretty quiet day today. Hard to find a feature other than the fact RIO hasn't done much on the back of what looked like great results (see below). Resources flat and financials down a touch. We are awaiting Woodside's results.Pretty quiet night on Wall Street - Dow closed up 27 - Up 50 at best. Down 46 at worst. Financials up a touch on an FDIC report saying 98% of companies were well capitalized. Homebuilders down on poor housing data, oil up and energy and resources up. & #160;Lehmans speculated to be planning to set up a company funded by third party investors to take on some of its mortgage assets to dispel the fears around its debt and one analysts said Fannie Mae and Freddie Mac had enough capital to last the year - the duo up 8.3% and 20.67%. Energy stocks up 1.8% - up for the first time in 3-days on higher oil prices and Anadarko Petroleum announcing a confident buy-back of & #36;5bn in shares. In economic news, July new home sales were up 2.4%, economists had expected 525,000, and August consumer confidence was up 9.6%, beating analysts' expectations. The NASDAQ closed down 0.15%.Wall St has a long weekend this weekend for the Labor Day holiday.The SFE Futures suggested a 6 point gain in the market.Both BHP and RIO up in ADR form overnight, 1.93% and 0.66%. BHP goes ex-dividend 46.9c on Monday.Metals all down - Nickel down 4.06%, Zinc down 2.37% and Copper 1.29%. Aluminium down 0.88%.Oil price up & #36;1.46 to & #36;116.31 as Hurricane Gustav threatened the oil infrastructure in the Gulf of Mexico.Gold up & #36;2.50 to & #36;824.20Bonds up with the 10 year yield down to 3.78% from 3.79%

Rio Tinto is nothing but optimistic about its future and the future for China, much like the way BHP Billiton management is optimistic about its future and the future for China.A week ago it was BHP meeting expectations with a huge & #36;US15.4 billion, late yesterday it was Rio reporting a record interim profit which was up 112.5% at & #36;US6.91 billion ( & #36;A8.01 billion in current exchange rates), compared with the & #36;US3.25 billion ( & #36;A3.77 billion) earned in the first half of 2007.Rio said that underlying profit, or earnings before interest and tax (EBIT), rose 55% to & #36;US5.47 billion ( & #36;A6.34 billion) which was broadly in line with analysts' forecasts. & quot;The group continues to perform strongly, and the outlook remains positive, & quot; Rio Tinto chairman Paul Skinner said in a statement to exchanges in Australia and London.BHP CEO, Marius Kloppers voiced optimism about China's growth and how it would continue at high levels, despite fears that it was slowing. And hours before the Rio result was released, the Financial Times in London reported optimistic comments from Rio's chief economist about China. & quot;A surge in demand from China could cause a bounce in commodities prices as restrictions on industrial activity around Beijing are eased after the Olympics. & quot;Vivek Tulpule, chief economist of the mining group Rio Tinto which is due to announce half-year results on Tuesday, said the region affected by the restrictions, which were introduced to try to improve air quality, contributes more than a quarter of China's gross domestic product. & quot;The Olympics have accentuated the usual summer slowdown in commodities demand, & quot; said Mr Tulpule in an interview with the Financial Times. & quot;When activity is allowed to start around Beijing, there will be a post-Olympics jump. & quot;That's just what some in the markets want to hear, including BHP.Rio shares rose & #36;1.76 to & #36;124.06 ahead of the results in Australia; BHP's shares were up 75 cents at & #36;40.75.Rio said that first half earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 73% to & #36;US11.41 billion ( & #36;A13.23 billion), with Rio Tinto's iron ore division the biggest earner for the group, contributing underlying earnings of & #36;US2.88 billion ( & #36;A3.34 billion), a rise of nearly 162%.Rio said it saw a 145% increase in underlying earnings from its aluminium division to & #36;US995 million ( & #36;A1.15 billion) after the & #36;US44 billion Alcan acquisition last year.Underlying earnings at Rio's energy division, (which comprises its coal and uranium assets) rose 83.5% to & #36;US679 million ( & #36;A787.34 million).But Rio copper division suffered a drop in earnings to & #36;US1.69 billion ( & #36;A1.96 billion).Rio Tinto said it was on track to divest & #36;US10 billion ( & #36;A11.6 billion) in assets this year to help pay-down debt after the Alcan purchase. & quot;We continue to make good progress with the integration of the Alcan assets that we acquired in 2007, & quot; chief executive Tom Albanese said in a statement. & quot;We are on track to deliver annual synergies of & #36;US1.1 billion ( & #36;A1.28 billion) after tax from the end of 2009, considerably higher than our initial estimate of & #36;US600 million ( & #36;A695.73 million). & quot;Rio Tinto said it had the capacity to grow the company from its existing base and saw modest impact on the business from the global slowdown.The company declared a final dividend of 68 US cents per share, up 31% on the first half of last year and the company promised shareholders this payout would rise this half and in 2009..The federal government this week cleared the way for Aluminium Corporation of China Ltd (Chinalco) to increase its nine per cent stake in the dual-listed Rio Tinto to 11 per cent.In a statement accompanying the results, Rio chairman Paul Skinner said, & quot;The 55 per cent increase in the Group's half year underlying earnings to & #36;5.5 billion clearly demonstrates the quality of Rio Tinto's portfolio and the strength of our existing markets, operations and management. The Group continues to perform strongly, and the outlook remains positive. & quot;The benefits of the Alcan acquisition in 2007 continue to show through in line with the investment thesis supporting this strategic move to create the global aluminium leader. Rio Tinto Alcan's large source of secure, hydro-based power supply is a major competitive advantage given emerging energy shortages around the world, including China. & quot;We continue to develop our strong pipeline of growth projects, which remains a significant competitive strength. & #160; & quot;During the year we have announced further expansions of our iron ore operations in the Pilbara region of Western Australia, expansions of our Brazilian and Canadian iron ore operations, and funding for the pre-feasibility studies for our Resolution copper project in Arizona in the US. & quot;Unlike many companies in the resources sector, we have the capacity to grow strongly from our existing base and create added value for shareholders over the decade ahead. & quot;Although we have seen some moderation in global growth rates from tightened availability of credit, the impact on our markets has been modest. & #160; & quot;The driver of demand for our products is urbanisation and industrialisation in heavily populated countries like China and India, and these economies continue to grow strongly. Prices for our products remain high by historic standards. & quot;While the equity markets are currently focused on downside risks, we believe there are potential offsets on the upside based on continued strength in commodity demand, low inventory levels and a supply side which continues to face multiple constraints. & quot;We increased our 2008 interim dividend by 31 per cent in line with our policy of paying an interim dividend that is half of the total dividend (expressed in US dollars) for the previous year. We are committed to increase the full year dividend by at least 20 per cent in 2008, and again in 2009.Rio Tinto's chief executive, Tom Albanese said that the company's earnings performance in the first half of 2008 & quot;easily eclipsed the same period in 2007, which was itself a record. & #160; & quot;There is no question that we are living in an era of unprecedented demand for minerals and metals, and we believe rapid demand growth and supply side challenges will be maintained. & quot;In this environment, the importance of having long life reserves and resources is critical, and Rio Tinto is particularly advantaged in this regard. When demand and prices are strong, growth options become increasingly valuable, and we have these in abundance. & quot;The Group set a half year production record in iron ore of 79 million tonnes on an attributable basis, as we deliver on our capital investment plans. Half year records were also established for bauxite, alumina, aluminium, borates, titanium dioxide and thermal coal (on a like for like basis). & quot;We continue to make good progress with the integration of the Alcan assets that we acquired in 2007. We are on track to deliver annual synergies of & #36;1.1 billion after tax from the end of 2009, considerably higher than our initial estimate of & #36;600 million. & #160; & quot;As we have now become more familiar with the company, I am delighted by the quality of Alcan's assets and its people. & quot;We have created an aluminium industry leader with an outstanding bauxite resource, a competitive refining position, sustainable hydro power, and industry leading smelting technology. & quot;We are currently studying a doubling of our bauxite production at Weipa in Australia, we are expanding our refinery capacity and examining a number of exciting smelter expansion opportunities in Canada and around the world. The Sohar smelter project in Oman was recently completed on time and on budget. & quot;Globally, the Group has plans to increase iron ore production to over 600 million tonnes per annum, including growth in Canada, Brazil and Guinea. While there has been a challenge to Rio Tinto's tenure of the Simandou project in Guinea, we believe our legal title is clear and we and our partner the International Finance Corporation (a division of the World Bank) are working with the Guinean authorities to clarify the situation. We believe there is no better company than Rio Tinto to deliver this project for the benefit of all parties. & quot;In copper, we have announced additional resources of 628 million tonnes at Kennecott Utah Copper and substantial resources of over 1 billion tonnes at Resolution in the USA and 2.8 billion tonnes at La Granja in Peru (refer to press releases dated 16 May 2008 and 29 May 2008). & #160; & quot;Rio Tinto is in great shape, and is getting stronger. My personal commitment is to drive the business to deliver all the shareholder value of which it is capable, based on its outstanding assets, growth options and people. & quot; & #160;

It was to be expected that leading retailer, Woolworths would see slowing growth in 2009 after the breakneck rise in sales and earnings from 2006 and 2007 and that's that the company forecast yesterday in its latest profit statement.This slowing growth also explains why it was pushing so hard to takeover JB Hi-Fi, a deal which fell over at the last minute earlier this month, and why its trailing hints about an overseas corporate play (Not in & #160;new Zealand).And the volatile market conditions and the reluctance of the credit crunch to go away have seen the company reverse a previous commitment to some sort of capital management this year, if an acquisition didn't happen.But it would seem that the company might be preparing to embark on another international deal as it made mention of its overseas interest.There have been rumours that the company might be looking in the US.The JB Hi-Fi deal didn't happen and it looks like the attempt to buy The Warehouse in New Zealand is struggling. But while the company says it will monitor the situation, the mooted buyback looks like it won't happen for while.The retailer certainly has the firepower, although buying anything now as an economic slump deepens in some key markets, is fraught with danger.Another solid year in 2008-09 will drive earnings and cash flow to the point where the market starts urging either a big deal, or capital management.Although the retailer is expecting earnings and sales growth to slow, it still expects to see profits grow by more than 10% for the 10th year in a row, and expects earnings to once again outpace sales growth.Woolies said yesterday it was expecting net earnings to rise by between 9% and 12% in the present year, less than half the 25.7% jump in 2008.Sales growth would be in the & quot;upper single digits,'' the company forecast, compared to the 10.7% rise in top line sales (4.9% comparable store growth) to & #36;47.29 billion for 2008.A 10% rise in earnings would see them come in around & #36;1.822 billion, compared with the & #36;1.627 billion earned in the 53 weeks to June 29.Chief Executive Officer Michael Luscombe told the market in a statement that & quot;We have continued to refine our brand proposition with significant investment in price, merchandise range and quality during the year,'' Luscombe said in the earnings statement. ``This investment continues to deliver gains in market share.''The 2009 forecast is based on a 52-week trading period after 53 weeks in the past fiscal year. Adjusted for a 52-week period in 2008, profit is expected to expand by between 11% and 14%.Woolies' shares eased 16 cents to & #36;26.70 at the close yesterday after hitting a day's low of & #36;25.84.The company will pay a total dividend for the year of 92 cents, up from 74 cents in 2007 with a final of 48 cents a share.The group posted a 19.8% increase in EBIT to & #36;2.5288 billion.The Australian supermarket division grew EBIT by 18.8% and the New Zealand Supermarkets increased EBIT by 9.1%.Food and liquor grew EBIT by 19.8% overall, but the petrol EBIT dropped by 1.2% as the company absorbed some of the sharp price rises in may-June.The group's general merchandise division, which includes Big W and consumer electronics in Australia, NZ and India, increased EBIT by 9.2%, while Hotels posted a 17.1% lift in EBIT, despite weaker sales caused by smoking bans and other restrictions. & quot;Australian food and liquor continues to perform well and BIG W, petrol and consumer electronics have had a good start to the new financial year. & quot;Hotels have experienced a pleasing improvement in gaming sales. & quot;New Zealand Supermarkets has experienced tight trading conditions as in the fourth quarter, & quot; it said.The company said that given the current uncertainty in the debt and equity markets, it would defer any capital management activity at this time.It said a share buyback would be assessed continually in the context of other initiatives and the capital market environment. & quot;Our current focus is to maintain a capital structure that will preserve our capital strength and give us the flexibility to pursue further growth opportunities. & quot;Our balance sheet, debt profile and strength of our credit ratings ensure we are very well placed for future growth both organically and through acquisition. & quot;It said it was in the early stages of evaluating opportunities internationally. & quot;Any international expansion would have full oversight from the board, be undertaken in a prudent and disciplined fashion and meet the hurdles required for all our capital investment decisions, & quot; it said.Besides NZ, the company has a small but growing operation in India. & quot;Our business venture with TATA is still in its infancy with 22 retail stores operating under the & quot;Croma & quot; brand. As part of this venture Woolworths Limited provides buying, wholesale, supply chain and general consulting services to TATA. & quot;The wholesale operations are meeting our expectations and recorded sales of & #36;104 million (2007: & #36;25 million) during the year and made an operating loss of & #36;5.0 million (2007: & #36;4.3 million). & quot;But that's clearly too small for the sort of deals the company is supposedly eyeing.Woolworths said its cost of doing business declined by 43 basis points (0.43%), and 38 basis points excluding one-off items.And that saw its most important ratio, the so-called EBIT to Sales margin in its Australian supermarkets again rise to 5.52 cents in the dollar from the then impressive 5.16 cents in the dollar margin in 2007.The Australian supermarkets food and liquor businesses are the financial powerhouse for the company and the key to it maintaining strong earnings growth.The company earned a gross margin (excluding hotels) of 23.92 cents in the dollar across the entire business, just up from the 23.89 cents in the dollar last year. Including hotels the gross margin eased slightly to 25.30 cents from 25.32 cents.

Quite a few companies reporting yesterday had already unloaded the bad news on the market: Fosters Group, Suncorp Metway, Mirvac and Toll were the notables.All the pre-conditioning announcements and then yesterday's final statements had one common theme these companies; some with aspirations to blue chip status, simply paid too much or had business models that were made redundant by the credit crunch.Shareholders have paid in lower share prices, and in some cases, lower distributions this year or next for these gross failures of management.They have managed to depart in some cases with a nice fat cheque (Mike Tilley from Challenger on Monday), leaving others to clean up the mess.Take Fosters Group: it reported an 88% fall in annual profit and declined to provide guidance for the 2009 financial year while the company conducts the previously announced strategic review continues of its wine operations.Fosters posted net profit for the 2008 financial year of & #36;111.7 million, declared a final dividend of 14.25 cents a share, fully franked. That made a total for the year of 26.25 cents, compared to 23.8 cents in 2007.Despite the mixed news, the market took a favourable view of the result and marked the shares up 8 cents on the day to & #36;5.41.In addition to the write downs and strategic review, Fosters lost CEO, Trevor O'Hoy after four years as he took the can for the wine strategy which will now be undone, if Fosters can find someone to pay the right price.With international rival, Constellation of the US looking to unload around & #36;200 million of Australian wine businesses (and sacking quite a few local staff) Fosters is going to find it tough to get buyers prepared to cough up a high enough price to make the write-downs look reasonable.The net result was affected by two impairment charges of & #36;437.7 million on the carrying values of wine in the Americas, and & #36;292.7 million on its Australian Asia Pacific (AAP) wine carrying values.Those write-downs signal what the company thinks the new carrying business for wine will be: that's yet to be tested in the market and finding buyers will be made tougher by the credit crunch.It's no wonder Fosters acting chief executive officer Ian Johnston said the company would not provide guidance for the 2009 year while it conducted a strategic review of its wine operations. & quot;Global trading conditions for wine continue to be competitive but the category remains in solid growth, & quot; Mr Johnston said. & quot;We have not been immune from industry-wide pressures including an economic slowdown in key markets and higher grape prices. & quot;Foreign exchange movements in the 12 months to 30 June 2008 cut wine earnings by approximately & #36;70 million and wine growth by 14.6 percentage points. & quot;Put simply, financial returns from wine have not met our expectations. & quot;He said Fosters was responding to wine category trends with sales initiatives across key categories and markets. & quot;We are making good progress with our wine review but won't be commenting on our analysis or conclusions until the review is completed. & quot;Before the write-downs Fosters reported a 0.4% drop in net profit to & #36;713.2 million, which is really down after inflation.Earnings per share were up 3.4% to 36.8 cents, within the guidance range provided to the market on June 10 when the company bit the bullet, announced the CEO's departure, the review and the asset write-downs. & quot;Cash flow and liquidity were very strong. Cash flow after dividends increased 52.1 per cent to & #36;433.9 million. Cash conversion increased 0.3 percentage points to 93.2 per cent of (earnings before interest, tax, depreciation, amortisation, significant items and SGARA) with continued strong performance in both beer and wine. & quot;Constant currency net sales revenue decreased 0.1 per cent, earnings before interest, tax, significant items and SGARA (EBITS) increased 4.3 per cent and earnings per share increased 7.9 per cent. & quot;Fosters said its beer business in Australia & quot;remains robust and continues to generate solid earnings growth & quot;. & quot;Fosters continues to expect the review to be completed by the end of 2008. & quot;Our Australia, Asia and Pacific beer business continues to perform well with earnings up 8.0 per cent for the year. & quot;Pure Blonde is experiencing outstanding growth, accounting for around 40 per cent of total Australian beer market value growth. & quot;VB remains Australia's favourite beer, with the healthy growth of VB Gold returning the brand to overall growth. & quot;We expect the beer market to remain resilient, with brand innovation driving value growth. & quot;Some very deliberate pricing decisions have slowed beer volume growth but strong value growth continues, & quot; Mr Johnston said.But it's the old story: after pumping & #36;6.3 billion into wine in eight years, the company still depends on the boring, mature beer business based in Melbourne to provide the earnings strength of the group. It somehow sums up eight years of missed opportunities. & #160;

Another company looking for redemption from asset write downs and a change in management (started, it claims well before the proverbial hit the fan in June and July) is Mirvac, a once promising real estate player now doing it tough among the growing flock of troubled property groups.The new CEO reckons its got a 'gold-plated balance sheet' to quote a story on AAP yesterday about the result, and that the rationalisation of its diverse property operations and a push into the booming Middle East market, will help & quot;shield it from the storm lashing the local sector. & quot;It hasn't so far and until the credit crunch stops forcing asset values lower and companies to de-merge and put assets up for sale, nothing will save Mirvac or any of its fellow property financial engineers from further rough handling.Unlike the older and wiser Westfield group of the Lowy family, Mirvac, GPT (and Valad and all those other property wannabees), strayed far and wide from what they did best; developing residential, light industrial and some commercial CBD properties for sale and or lease or rent to good quality clients.Funds management, joint ventures, plunges into the US, UK, Europe, the Middle East, Asia (especially Japan ), higher borrowings, more leverage, more leverage; anything to drive returns higher in the easy money, low credit risk days.But no more and all those financially- engineered property groups are now suffering, from Lend Lease, to GPT, Valad and a host of others. Mirvac is no different and yet you wonder if they still don't understand the changed nature of business.Mirvac reported a full-year net profit of & #36;171.8 million, down 69.1% from the previous year. Revenue for the period was down 5.8% to & #36;2.128 billion. & quot;Mirvac's statutory net profit after tax of & #36;171.8 million was impacted by the previously announced asset impairments totalling & #36;400.1 million. Due to the sustained deterioration in market conditions Mirvac prudently reassessed the value of its residential and non-residential developments, intangible values and co-investments in managed listed funds, & quot; the company said. & quot;Operating profit after tax (profit before specific non-cash and significant items) was & #36;352.2 million, an increase of 10.4 per cent. & quot;Full year distributions to securityholders of 32.9 cents per stapled security represented a 3.1 per cent increase on the previous 12 months. & quot;It reaffirmed earnings per share guidance range of 23 cents to 25 cents per stapled security and distribution guidance of 20 cents per stapled security for the 2009 year, which will be sharply down on the 32.9 cents distributed in 2008 with a final payout of 8.23 cents a security.So the distribution could be down 33% or so this year.The investment division, comprising Mirvac Property Trust and Mirvac Asset Management, made a pre-tax profit of & #36;404 million for the year.But its development division made a pre-tax net loss of & #36;65.8 million, after booking a & #36;219.9 million impairment to the carrying value of its inventory. & quot;Residential developments have been exposed to the continuing poor sentiment, affordability and mortgage related stress, which adversely impacted some development values, & quot; Mirvac said.At the end of June, Mirvac's funds management business had & #36;7.2 billion in funds under management. & quot;Funds Management was adversely affected by the deterioration in the real estate markets with the value of certain assets being written-down by & #36;104 million including infrastructure investments (Lane Cove Tunnel and River City Motorway) and intangible assets (Mirvac Domaine, Mirvac Equity Funds and JF Infrastructure). Funds Management's net loss before tax was & #36;93.9 million, and operating profit before tax was & #36;9.5 million, a decrease of 59.9 per cent. & quot;Newly appointed chief executive Nick Collishaw said after the profit announcement that he believed Mirvac's recent & #36;400 million write-down of its assets properly reflected market conditions. & quot;If the market deteriorates further then we will continue to assess the carrying values and report accordingly, but as we sit here today we believe we have taken appropriate action to reflect the current and the real carrying values of those assets, & quot; he said.He said Mirvac retained a strong balance sheet with gearing at 32.5% and & #36;1.2 billion of undrawn debt facilities.Investors kept Mirvac securities down yesterday in the weaker market. They closed off one cent at & #36;2.82, after falling more during the day, before the market recovered much of the morning's fall.The securities plunged 70% from January to mid-July 2008, then recovered about to be around 60% down after the update, write-downs and announced retirement of CEO Greg Paramour.He left as of August 26, , hung around for the start of yesterday's briefing and then departed.Nick Collishaw then ran the chat with analysts.Mr Collishaw said Mirvac was now focused on cutting costs at its funds management and residential development businesses, as well as grow and secure recurring income at its investment division.Mirvac said it was excited about its push into the United Arab Emirates but would not risk its balance sheet or capital in chasing deals. It would partner in the region with Nakheel, which is also a major shareholder in Mirvac.Like so many other companies in the sector, such as its bigger rival Stockland, Mirvac is looking past 2009 and to 2010 and beyond to resume growing.Like Mirvac, Valad Property group tried to best complexion on a rotten result and a rotten final six months.In fact the two groups had a similar experience, being forced to cut asset values, changing its business model (rediscovering prudence and conservative financing, plus paying distributions out of earnings) and revealing a change at the top of the company.And like Mirvac, 2009 is basically being written off with a lower profit and sharp drop in distributions being forecast. It's a similar story across this sector as companies and their investors count the cost in billions of dollars of losses and collapsed asset in stock market values.Mirvac lost its CEO, now Valad's executive chairman, Stephen Day is stepping aside because of ill-health (but will remain on the board) He will be replaced by Peter Hurley, currently a senior executive.The company said Stephen Day decided to become a director based on medical advice. Hurley will return to Sydney after being based in London the past 12 months.Valad has been the worst-performing Australian real estate investment trust the past three months, mainly because of worries about its business model and its exposure to the worsening UK real estate market..The group reported a net loss of & #36;248 million for the 12 months ended June 30, compared with net income of & #36;109.1 million in 2007.That was after a huge write off.In a statement to the AX with its report, Valad said & quot;it achieved a 123% rise in annual underlying profit to A & #36;169.6 million compared with A & #36;76.2 million in the previous corresponding period, reflecting a solid performance in a very difficult environment. & quot;Following a business review that highlighted the need to realign operations amid challenging global market conditions, asset revaluations and goodwill write-downs have led to a net reported loss of A & #36;248 million in the 12 months ended June 30, 2008, compared with a net profit of A & #36;109.1 million in fiscal 2007. & quot;Executive Chairman, Stephen Day on medical advice has decided to change his role to Executive Director. & quot;Operational responsibility will rest with Peter Hurley, who will become Managing Director. Mr. Hurley has been based in London for the past 12 months integrating the Group's European business and will eventually return to Sydney. Trevor Gerber, who is currently Deputy Chairman, will become the Independent Non-Executive Chairman. & quot;The past 12 months have been a torrid time in world property and financial markets. This, combined with 14 years of effort since founding Valad in 1995, has taken its toll on my health and as a result the Board changes are required going forward, & quot; Mr. Day said. & quot;As a consequence of my decision, Trevor Gerber has accepted the Board's offer to be Valad's Independent, Non-Executive Chairman. Trevor has been Deputy Chairman and Lead Independent Director and the Board looks forward to working under Trevor's Chairmanship. & quot;A business review undertaken over the past two months has resulted in a A & #36;247 million write-down of goodwill relating to the 2007 acquisition of the European platform, a write-down of A & #36;15 million in the Asia Pacific VCS portfolio and a A & #36;24 million write-down of the Crownstone European portfolio. & #160; & quot;These unrealised devaluations, along with another A & #36;117 million in properties and fund co-investment, have also been included in the fiscal 2008 results. & quot; & quot;Mr. Hurley said the business review has been a necessary step to ensure that Valad responds effectively to the tough prevailing conditions. & quot;The conditions that we are all facing have been challenging and we are disappointed not to have met our original FY08 DPS and EPS targets, & quot; he said. & quot;With no sign that uncertainty in the financial and property markets will ease anytime soon, we have taken a very conservative view of the future, and have begun a process to re-set the business so that growth can be achieved from today. & #160; & quot;We see no benefit for any of our stakeholders in taking a bullish view of our earnings in FY09, although we believe that working off this base there is every possibility for over performance, particularly with regard to our Funds Management business & quot;We have also adjusted our distribution policy to pay out 75% of underlying earnings to better match our cash earnings over the coming year.Valad expects fiscal 2009 net profit in the range of A & #36;115 million to A & #36;145 million, which translates to earnings per security of 7.00 to 9.00 cents and distributions per security of 5.25 to 6.75 cents. & quot;The FY09 guidance represents our conservative view of reliable earnings that we expect to achieve this year. This is obviously formed on the basis that market conditions remain under stress but do not suffer a material deterioration, & quot; Mr. HurleyTotal dividends were 11.1 Australian cents a share, the same as in the good days of 2007. As we have just seen, that will be a highpoint for at least a year, possibly more, with a 50% fall expected for 2009.Valad's shares have dropped so much in the past three months of trading that its market value has been slashed to just over & #36;750 million. yesterday the securities rose in the late rebound in the market to finish up 9%, or 4 cents at 47 cents. & #160;

Transport and logistics group Toll Holdings was another company that soften up the market ahead of reporting the actual figures with its decision to distribute the 62% or so of Virgin Blue it owned to Toll shareholders and take a write-off.It was a tacit recognition that the company had not only been dilatory in getting rid of the VBA stake it picked up in the Patrick takeover, but that it paid too much for Patrick. The financial strains at former associate Asciano further confirm that.Toll should have really sold off the VBA stake when times were better in the aviation business and before oil prices surged. & #160;Those surging oil and jet fuel prices have slashed VBA's operating performance and caused the loss of value. Toll wanted more, and it didn't come and it was stuck with the VBA stake. & #160;The early announcement of the VBA distribution and write-down removed any confusion that would have existed had the announcement come yesterday, and the separation allowed the market to concentrate on the company's non aviation operational performance.Toll says its trading so far this financial year is well ahead of the previous financial year and the outlook for earnings is strong.Toll booked an annual net loss for the year ended June 30 of & #36;695 million after taking into account the adverse effect of a & #36;952 million charge related mainly to the restructure of its investment in airline Virgin Blue Holdings and a gain on the sale of rail and ferry operations in New Zealand.After-tax earnings from continuing businesses amounted to & #36;258 million.Toll CEO, Paul Little said that results to date for the 2009 financial year have remained solid and tracking well ahead of last year: & quot;Based on current trading conditions, the outlook for the full year is for strong earnings and cashflow generation to continue across the business.''Toll shares fell 17 cents lower to & #36;6.88 in early afternoon trading, but then bounced as the overall market recovered. They closed up 31 cents at & #36;7.36.Mr Little said the company was pleased with the performance of its core operations, the integration of several new acquisitions and its balance sheet strength, which would all support ongoing strategic development.The company said that the strength of ongoing cashflows and debt capacity would enable the company to pursue growth opportunities, both in Australia and in support of the group's global forwarding and Asian contract logistics businesses.During 2008, revenue from continuing operations grew to & #36;5.6 billion from & #36;4.9 billion, with & quot;organic revenue growth & quot; in Australia of 7.5% and 12.5% in Toll's Asian operations.Reported EBIT (earnings before interest and tax) from continuing operations, before one-off items, grew 18% to & #36;429 million, compared to & #36;365 million in the prior year. & quot;Revenue from Australia for the year grew from & #36;4.05 billion to & #36;4.4 billion. Excluding the impact of acquisitions and incremental fuel surcharges, revenue grew & #36;304 million or 7.5%. & #160; & quot;Importantly the second half of the financial year continued to produce excellent organic growth, reflecting new contracts and growing market share across the businesses, & quot; Toll told the ASX. & quot;EBIT increased over 18% from & #36;294 million to & #36;347 million. Whilst EBIT margin grew from 7.21% to 7.84% for the year. Margin expansion was also achieved in the second half of the financial year. & quot;In New Zealand, continuing operations include the contract logistics and forwarding operations of TranzLink, following the sale of the rail and ferry assets back to the NZ Crown at balance date. & quot;Revenue for the year was NZ & #36;255 million compared to NZ & #36;234 million previously with EBIT of NZ & #36;9.4 million growing from NZ & #36;7.3 million previously. & quot;Total revenue for the year for Toll Asia was S & #36;777 million compared to S & #36;563 million in the prior year. Excluding the impact of the Sembawang Kimtrans acquisition, underlying revenue grew 12.5%. & quot;EBIT was S & #36;82 million compared to S & #36;73 million last year, an increase of 12%. As was the case with Australia, the underlying growth in revenue and EBIT for the second half of the financial year remained strong. & quot;Following the acquisition of the BALtrans group, effective 1 March, 2008, the new Toll Global Forwarding division was formed. The new division also includes the Australian International forwarding operations (previously included in Toll Australia) and the recently acquired Gluck business in Australia. Revenue for the year was & #36;358 million with EBIT of & #36;11 million, & quot; Toll said in its profit commentary.Toll declared a final dividend of 11.5 cents per share, up 20% on a continuing business basis at a consistent payout ratio. That makes 25 cents for the year..

The chances are fading fast for the quick resolution for the restructuring of the billions of dollars in debt and dodgy assets values in companies like Allco, Centro Properties, ABC Learning, Babcock and Brown and even some of the Macquarie Group satellites.This follows the statement by Centro Properties & #160;to the ASX yesterday that its talks with its lenders was taking longer than planned and that more time was needed to work out restructuring proposals.It fact Centro is close to broke and engaged in a high stakes game of brinkmanship with its banks: ut wants more time and money, and is showing the banks that if this is not forthcoming, then it could mean huge write-downs for them.The credit crunch and reluctance of banks to lend money to refinance failing companies or any sort of deal, means the work out of Centro and others in its position will take years, not months. & #160;Centro's statement means we are now getting to the crunch part of debt restructuring and asset sales with the first real Australian casualty of the credit crisis. Centro Properties, a big real estate and shopping mall operating fell over midway through last December when it couldn't refinance over billions dollars in debt.From what Centro told the ASX, it now looks as though its shareholders will have to take a big haircut in any restructuring. Centro is proposing the creation of 'hybrid' debt and equity securities to issue to its financiers in any restructuring. That will dilute or even eliminate existing shareholder equity.That is not going to be the last such suggestion from a struggling financial engineer.Centro Properties' statement now means that our big banks, and some in the US will not quickly resolve their huge debts with Centro, and questions will now be raised whether they should start raising specific provisions against Centro debt. Only one bank, ANZ, has done that so far for a small amount of debt.Centro is said to be still paying interest, but is it paying all the interest on the more than & #36;A6 billion in debt?As Centro Properties (and its associated Centro Retail trust) were first cab off the failure rank, they have been more advanced in debt negotiations, rescheduling and the search for new management and equity and of course buyers for unwanted assets.It's success, or otherwise, would give us a clue as to how the likes of Allco and Babcock and Brown and their various funds would go in renegotiating their huge debts and selling assets to reduce debt.Despite finding a solid new CEO and changing some of the board, and selling or moving to sell more than & #36;US700 million in assets in the US, Centro Properties was forced to admit today that the restructuring and asset sale process was proving hard to do, given the collapse in credit markets and the lack of financeThe message was its tough and it's going to get tougher.Centro has around & #36;A6.6 billion in debt it is trying to restructure and it revealed today that it won't be able to meet the December deadlines for its restructuring and that it wants a longer, but unquantified period of time to do this.Centro Properties told the ASX today that : & quot;In the absence of a recapitalisation solution in the short term, the Group's objective therefore is to obtain longer term debt extensions from the lender groups beyond 15 December 2008 to provide a more stabilised environment for the recapitalisation process to be pursued over a longer time frame. & quot;The Group has commenced discussions with the lender groups on possible terms for longer term debt extension and stabilisation of the Group. It is likely that those terms would include a requirement for the conversion of a portion of debt into some form of hybrid security. This may impact the value of the Group's existing ordinary equity. & quot;While the asset sale program will provide the Group with liquidity and some level of debt reduction, the Group considers that asset sales alone will not provide a long term recapitalisation solution. & quot;The Group has also received and evaluated a number of proposals for new equity. The Group, in consultation with its lenders, has concluded that no proposal received to date provides an acceptable outcome which is in the best interests of all relevant stakeholders. & quot;The Group believes that, in particular given current difficult capital market conditions, an acceptable proposal capable of being implemented by 15 December 2008 is unlikely to be forthcoming. & quot; & quot;Discussions with the lenders on possible terms are at a preliminary stage and no specific proposal has been formulated. The Group can give no assurance that any further debt extensions will be achieved beyond the expiry of the current extensions on 30 September 2008. & quot;The alternative to the Centro proposal for the company's future is liquidation and a fire sale of assets at vastly reduced prices and larger loan losses for the banks. And that applies to all those other companies in the same position.This is what 'de-leveraging' is all about: it's a brutal, nasty business and there are no winners except for those buyers with enough cash and confidence to buy the assets being sold and to then hang on to them long enough to enjoy the upswing, whenever that happens.Centro Properties securities closed down 2 cents at 20 cents and Centro Retail Trust securities were half a cent firmer at 32 cents.Centro Properties was in the Federal Court in Melbourne yesterday, for a directions hearing involving two class actions.It is the sixth extension the company has sought since last December 17, when it stunned investors with the news it was unable to repay its & #36;4.5 billion debt. That sent the value of the securities down more than 60% in one day. They have lost more than 90% since.The two groups report 2008 results on & #160;Friday, We will learn more, then.

The 2008 Goodman Fielder result was long on red ink and explanation, and short of the sort of news investors wanted to read about the year past, and the year that's now underway.And that was reflected in the share price, which traded through a range of a high of & #36;1.575, a low of & #36;1.39 and a closing price of & #36;1.45, down 6 cents, or 4% on a day when the market was up 1.5%.Annual profit after write-offs fell and directors said they don't expect much improvement in earnings this financial year due to uncertainty surrounding the outlook for the Australia and New Zealand economies.Net profit for the year ended June 30 fell 88.4 per cent to & #36;27.7 million from the prior corresponding period because of an impairment charge on its NZ dairy division of & #36;170 million.Excluding the charge and restructuring costs, net profit from continuing operations was & #36;220.7 million; roughly steady with the 2007 figure of just over & #36;218 million, despite having to absorb & #36;234 million in increased commodity and logistics costs. (Higher oil and energy costs, plus higher prices for grains and oil seeds, plus dairy products).The company will pay a steady final dividend of 7.5 cents, taking the total for the year an unchanged 13.5 cents. & quot;The company sees little improvement in the underlying earnings in fiscal 2009 due to uncertainty around commodity costs and future economic conditions in Australia and New Zealand, & quot; Goodman Fielder directors said in their statement to the ASX. & quot;The company is more optimistic for the fiscal 2010 year and expects to see the benefits flow through from significant capital expenditure and resulting efficiency gains, combined with softening commodity prices. & quot;Revenue rose 10.2% to & #36;2.68 billion in the year to June.They are not alone in making these comments as quite a few companies, like Boral, Wattyl and others in building, construction and retailing look through what's expected to be a tough 12 months to hopefully better times from 2010 onwards.The spreads and breads maker, said & quot;substantial and rapid & quot; increases in commodity costs impacted margins and added & #36;204 million to its costs. & quot;In the second half of the year international crude oil pricing also reached record high levels, resulting in an increase of & #36;30 million in logistics costs, & quot; it added. & quot;A rapid deterioration in the New Zealand economy towards the end of the financial year also impacted earnings as did the weakening New Zealand dollar.Earnings before interest and tax (EBIT) for Goodman's fresh baking business fell 12.9% to & #36;131.4 million. & quot;This was the first time in the last five years in which the business did not record double digit profit growth, & quot; Goodman said.Earnings for its commercial unit, which supplies flour, fats and oils, fell 4.6% to & #36;66 million, due to rising oil and wheat costs.But home ingredients EBIT rose 13.8% to & #36;101.3 million.The result included the first full year of earnings from the Copperpot dips business as well as a few months benefit from biscuit maker Paradise Foods, which it acquired in March.Meanwhile, EBIT for the troubled dairy and meats arm fell 31.9% to & #36;34.4 million. & quot;The dairy business had a difficult year with rapidly escalating commodity costs resulting in raw milk costs increasing by over 60 per cent in the year, & quot; Goodman said. & quot;Aggressive cost recovery initiatives resulted in the business taking four price rises but inevitable timing lags and a growth in private label sales had a negative impact on margins. & quot; & quot;During the year the company commenced sourcing locally in China with the signing of a long term contract with a Chinese company to manufacture Goodman Fielder commercial fats and oils at a plant in the Shanghai region. & #160; & quot;This will allow the company to grow its Chinese customer base, reduce its conversion costs and avoid the need to supply finished goods from Australia. & quot;The company continued to focus on building for the future by pursuing manufacturing efficiency, optimising its logistics platform and investing heavily in brand support. & #160; & quot;The closures of redundant facilities at Mascot in NSW and Geelong in Victoria were announced and construction commenced on a new state-of-the-art packaged food manufacturing plant at Erskine Park in western Sydney. & quot;During the year the company invested heavily in new product development and in supporting its leading consumer brands. & #160; & quot;Brand support increased by more than 60% and the company's active new product development program saw the launch of a range of new and redeveloped products. & quot;In Australia the company launched Lawsons, a new premium bread brand, while in New Zealand every dairy branded product was reformulated, re-designed or repackaged. & quot;A new Thick and Creamy yogurt range was launched, as was a new milk variant and an extended specialty cheese range, and a new milk bottle shape was launched to increase functionality and increase shelf presence. & quot;The company moved to optimise its distribution system by commencing a program of outsourcing line haul distribution to third party providers. & quot;The company has also commenced a program of selling and leasing back selected assets, where holding title in those assets is not essential to the ongoing business, thus freeing tied-up capital that can be invested more effectively elsewhere in the company. & quot;The company maintained its search for bolt-on acquisitions that would add shareholder value. Paradise Foods, Australia's no. 2 biscuit manufacturer, was acquired during the year providing Goodman Fielder with an entry into Australia's & #36;1.3 billion biscuit market. & quot;It sounds like a year where the company did a lot of running, just to standstill, as the surge in commodity costs took their toll. & #160;

Transfield Services Ltd, a provider of maintenance services which has been growing rapidly in the US, says its net profit will grow by up to 20% this year, after meeting reduced guidance for the year to June 30.The company's shares were sold off heavily in May when directors said the strength of the Australian dollar and the sluggish US economy would see earnings in the range of & #36;105 million to & #36;110 million, instead of in the forecast range of & #36;115 million to & #36;120 million.Underlying earnings during the year were & #36;106 million, underpinned by a cash distribution of & #36;24.2 million to Transfield from Transfield Services Infrastructure Fund.The fund, which holds investments in five power stations, two water filtration plants and four wind farms, was spun-out of Transfield last year.For that reason, the company said the group consolidated results & quot;are not directly comparable to the previous year. & quot;Profit before the distribution during the 12 months to June 30 fell 25.6% to & #36;82.17 million from the previous year due to a strong Australian dollar, rising input costs and the deferral of work.Transfield said the outlook for this financial year was & quot;positive & quot; and that it expected net profit to grow in a range of 10% to 20%.That clear guidance for 2009, something of a rarity this reporting season, saw the shares back in favour. They ended up over 6% or 48 cents at & #36;8.18.That's well down on the 52 week high of & #36;16.32, set a year ago, and the & #36;13 the shares were trading at when the earnings update was issued in early may. & quot;Transfield Services is well positioned for ongoing sustainable growth, & quot; managing director Peter Watson said in a statement.Revenue during the 12 months to June 30 climbed 30.6 per cent on the corresponding period in 2006-07 to & #36;2.99 billion, with the company declaring a final dividend of 18 cents. & quot;Work-in-hand reached a record level of & #36;11 billion, up 21 per cent on the previous year, driven by strong demand for our essential services and ongoing growth in the key sectors in which we work, & quot; Mr Watson said.Mr Watson said & quot;Our core business grew strongly for the seventh consecutive year, with revenue growing 31 percent to & #36;3.0 Billion. Including our joint ventures, revenue grew by 34 per cent to & #36;3.66 Billion. & quot; & quot;Our Services EBITA was & #36;151 million, an increase of 33 per cent and in line with guidance. Services EBITA margin was sustained at five per cent. & quot; & quot;The achievements that demonstrate the high quality of our business are our record work-in-hand and our ongoing earnings growth momentum and strong operating cash flow. & quot;The company said in its statement to the ASX:Revenue in Australia increased by 12 per cent to & #36;2.03 Billion, driven by growth in our infrastructure services and resources and industrial groups. Major project management work included the Western Corridor Recycled Water pipeline in Queensland and the Gippsland Water Factory in Victoria, and shutdowns for Shell, Caltex, Woodside and Santos. Ongoing organic growth was secured with key clients such as Western Power and Goulburn Murray Water through major long-term contracts. In December 2007, Transfield Services purchased a portfolio of wind farm development rights which has the potential to boost Australia's renewable energy generation capacity by an additional 1,150 megawatts.Transfield Services New Zealand grew strongly during the year with revenue increasing by 28 per cent to & #36;A535.6 million. Growth was underpinned by major work in the energy sector and investment in our transport infrastructure business. North AmericaOur North American revenue increased by 133 per cent to & #36;A1.01 Billion. More than 50 per cent of our revenue in this region is generated by the resources and industrial sector. Our Canadian joint venture, Flint Transfield Services, exceeded expectations, delivering more than & #36;A300 million in revenue. & #160;We successfully completed our first major shutdown for Suncor Energy and our Suncor Energy asset management contract was extended to 2012. We also secured a three-year asset management contract with Canadian Natural Resources Limited.TIMEC achieved ten per cent year on year growth, which was in line with expectations. TIMEC also expanded its range of service offerings with the acquisition of specialty industry services company, HRI, which provides critical maintenance services in ultra high-temperature and confined space environments. & #160;US Maintenance acquired both Horizon and Whelan's to create an integrated facilities management and maintenance services capability in the world's largest growing outsourced market.Revenue in the Gulf Region, India, Chile and Asia grew by 55 per cent to & #36;82.8 million. Our work in Abu Dhabi grew significantly, and we completed a second major shutdown for Gasco. & #160;We secured a new contract in Brunei for Sarawak Shell through joint venture company, Transfield Worley Services. In Chile, we established a new joint venture, INSER Transfield Services, to capitalise on opportunities created by significant investments in the mining sector.Transfield Services Infrastructure (TSI) Fund performed ahead of PDS guidance in its first year of operations, delivering a cash distribution of & #36;24.2 million to Transfield Services. Our investment in TSI Fund generated the equivalent of an additional 7.0 cents to our underlying Earnings Per Share, when considering cash distributions payable for FY08. & #160;TSI Fund has a portfolio of quality essential infrastructure assets with substantially contracted revenue streams. TSI Fund entered the renewable energy sector in late 2007 and is the second largest provider of wind energy in Australia.

Victorian-based pie and pastry group, Patties Foods had a similar 2008 to Goodman Fielder as it too battled rising commodity and logistics costs and some manufacturing inefficiencies.But it managed to avoid the huge write-down that GFF did to report an 8.6% lift in annual net profit for the year.And, unlike its bigger competitor, Patties hasn't written off 2009. It sees some growth and expects to see an improvement in revenue and earnings in the current year. & quot;In the current economic climate of low consumer confidence, the company's products tend to become more attractive to consumers and we have noticed this trend in the latter part of fiscal 2008 and the early part of fiscal 2009, & quot; Patties said. & quot;With the disruption of the significant capital expenditure at Bairnsdale substantially behind us coupled with the successful Creative Gourmet/ Chefs Pride acquisition ... (Patties) expects to see improvement in revenue and earnings, & quot; the company said in its statement to the ASX.The shares rose 2.5 cents to 92.5 cents at the close.The company said that analysts' expectations of earnings for FY09 were in the range of & #36;15.8 million to & #36;17.4 million after tax, and revenue expectations were between & #36;179.1 million and & #36;185.4 million for FY09; and & quot;whilst it is too early to forecast the result for FY09, the results for the first six weeks are in accordance with the company's budgeted expectations, & quot; the company said.Annual profit increased to & #36;13.85 million for the year to June 30 compared to 12.74 million the previous year after revenue jumped 29% to & #36;163.95 million.This was driven by good growth from both the existing retail and foodservice segments of the business as well as a positive contribution from the Creative Gourmet/ Chefs Pride (Silverwater) business acquired in May of last year.One-off items impacted its annual profit by & #36;1.2 million, including a write-off receivable from a US distributor which experienced financial difficulties and termination costs relating to the restructuring of the company's management. & quot;Whilst earnings before interest and taxation (EBIT) increased for the Company over the prior year, margins continued to be impacted by issues in manufacturing caused largely by an increased number of products (SKUs) being produced and therefore a higher level of line changeovers in the Bairnsdale facility, & quot; the company said. & quot;This was exacerbated by the disruption caused during the commissioning of two new production lines. The Company has undertaken actions to address these issues in the second half of FY2008 and expects to see further improvement in FY2009 EBIT margins as a result. & quot;FY2008 was also the first year of operation of the Company's joint venture associate, Davies Bakery (Aust) Pty Ltd. Building of the facility was completed in October 2007 and commissioning of the facility continued throughout FY2008. & quot;Accordingly, this entity has posted a start-up loss for the financial year which is not considered to be reflective of its ongoing operating capacity. & quot;The Company continues to monitor increasing raw material input prices and its ability to recover these increases. & #160; & quot;Movements in meat prices in particular are expected to present some challenges. The Company has a number of strategies to manage this risk. Supplies for a large portion of other major input costs are contracted for at least the first half of FY2009. & quot;The effective tax rate for the year was 25.2% due to deductions for R & #38;D tax concessions and the effect of prior year tax provision adjustments. & quot;Interest costs are expected to be greater in FY2009 due to increased rates, additional borrowings for the capital expenditure program in FY2008 as well as the expiry of fixed rate borrowing of & #36;23.5m which converted to floating rate debt in July 2008. & quot;The company will pay a final dividend of 4.5 cents a share for the year ended June 30, taking the total for the year to 7.3 cents up from 7.2 cents in the previous year.

Spotless, another company in the growing services sector, saw the market switch tack on its 2009 result, dominated as it was by some deck clearing costs after a restructure.Reported final profit for the year to June 30 fell 45% to & #36;26 million after one-off items including, costs associated with an organisational restructure.But underlying earnings were up 13.5% to & #36;57.1 million compared with the 2007 financial year, according to directors. & quot;Underlying EPS (earnings per share) grew strongly by 12.5 per cent and we are confident this performance provides a clear path for delivering improved results in full year 2009 and beyond, & quot; chief executive Jo Farnik said in a statement.Revenue during the 12 months to June 30 fell 4.2 per cent to & #36;2.4 billion after a decline in retail services sales and the full year impact of a major contract loss.Underlying earnings before interest, tax and non-recurring items climbed 10.7 per cent higher to & #36;105.1 million.Once the market had assessed those gyrations and the comments from the company, the shares hit a day's high of & #36;3.36, after touching a low of & #36;2.94. They ended up a solid 9%, or 27 cents at & #36;3.16. & quot;Following the completion of our strategic review and the identification of opportunities for growth and improved efficiency we undertook deliberate investment in restructuring and this has, and will continue to, deliver strong financial returns, & quot; Mr Farnik said.Spotless said it was confident of growth opportunities across all of its businesses, notwithstanding the uncertain economic environment in the short to medium term.The company said it expects the strongest growth to come from the group's managed services and cleaning services this year, with modest growth from food services and laundry services. & quot;Spotless is confident of continued growth in EBIT, NPAT and EPS in FY09, building on the strong foundations laid in FY08. With the restructuring program largely completed Spotless expects no material restructuring costs in FY09. & quot;Notwithstanding the uncertain economic environment in the short to medium term, Spotless is confident of growth opportunities across all of its businesses. & quot;Having established an efficient operational and administrative platform, emphasis will shift towards delivering profitable organic growth. In Australasia, solid demand trends remain across all four business lines, despite a subdued New Zealand economy. & quot;In FY09, Spotless expects growth in all divisions, with the strongest growth in Managed Services and Cleaning Services, and more modest growth in Food Services & #38; Laundry Services. & quot;The prospect of increasing cost inflation presents challenges in managing the cost base. & quot;However the strong cost reductions achieved in FY08 position Spotless well in maintaining recent significant improvements in operating margins, & quot; directors said in a statement to the ASX.Spotless declared a final dividend of 10.5 cents per share, taking full year dividends to 21 cents, unchanged on 2007.The company called off a takeover attempt on rival services provider, Programmed Maintenance Services during the year. & #160;

The market is up 101 following the lead in the US with Financials bouncing (Banks fell 6% last week) and Resources underperforming on the back of weaker metal prices. Oil price down 5.7% on Friday and Woodside one of the few stocks not up today. Gold price also fell & #36;5 and the gold sector is also down. VIX Volatility index down 5.10% to 18.81. Lowest level since 6th June - correlates to better market sentiment. Oil price down & #36;6.75 to & #36;114.48. Still up 0.9% on the week. Retailers and consumer stocks doing well on the back of the fall in the oil price. Harvey Norman has results on Friday and is up 5%. Telstra Ex dividend 14c but is only down 6c.Statistic of the Day - There are 1432 days until the London Olympics.Good lead from Wall Street - the Dow Jones closed up 197 - Up 202 at best. Down 3 at worst. & #160;Major indices up Friday but down for the week - Dow down 0.3% last week, the Nasdaq lost 1.5%, and the S & #38;P 500 down 0.5%. Oil price still up 0.9% on the week despite falling & #36;6.75 or 5.6% to & #36;114.48. Two of the market's greatest concerns - high oil prices and the health of the financial sector - moderated on Friday. Warren Buffett made a comment that Fannie and Freddie were looking for private investment. He also made positive comments about the prices of US stocks and the continuing strength in the US dollar (two essential ingredients for his success) and Ben Bernanke said inflation is likely to moderate with falling oil and rising USD. Said FY09 economic growth should be & quot;tepid. & quot; The NASDAQ closed up 1.44%.Both BHP and RIO down 1.9% in ADR form on Friday.Metals all down on Friday - Nickel down 3%, Zinc down 2.7% and Copper down 2.61%. Aluminium down 2.14%.Oil price down & #36;6.75 or 5.6% to & #36;114.48 - the biggest drop in percentage terms since December 2004 - on the back of a strong US & #36; and the BP restoring shipments on a Caspan Sea pipeline through Turkey.Gold down & #36;5.50 to & #36;829.50US Bonds down with the 10 year yield up to 3.87% from 3.83%.

If we thought last week was dramatic, with the huge profit of BHP Billiton, good to average results from a string of companies like Qantas, a poorly received effort from Wesfarmers, and bad news from Babcock and Brown, then the coming week will be climatic.Centro Properties, Centro Retail and Allco Finance Group, not to mention Babcock and Brown Power will reveal a flood of red ink. It won't be nice, but it will be a necessary purging.It will be one where the good news of the likes of Woolworths, Rio Tinto and Woodside is completely overshadowed by bad results, and the red ink from a string of former higher fliers. Property groups like Mirvac, Becton and GPT will feature in ways their shareholders would have thought unheard of a year ago.And there will be infrastructure groups, like Australian Infrastructure Fund, Transurban and Connecteast that will report figures that will be sliced and diced to see if they stand up.Suncorp Metway is will confirm the shock guidance of a month ago that revealed a halving in profit: but it would have been worse but for the release of central reserves and changes to the claims valuations that pumped over & #36;400 million into the business's bottom line.In total, around 75 major companies are due to report this week including AMP, Harvey Norman and Westfield.Its not surprising that of the 10 worst performing shares in the ASX 200 last week, seven were either financial engineers (Babcock and Brown), or its satellites (the power and infrastructure arms), or property groups, such as Valad which fell 18% or 10 cents to 43 cents.As well Virgin Blue was on top of the list of losers because of the big spike in oil prices on Thursday, which was reversed on Friday. Gunns was there as it looks more and more likely its Tasmanian pulp mill project won't get financed.And ABC Learning was there as well, down 21.1%, or 15 cents at 54 ahead of its request to have trading halted ahead of an announcement that will come today or tomorrow.Rio's result will be watched closely, particularly in view of BHP's ongoing takeover offer. Comparisons will be made between BHP's second half and Rio's first half figures.The AMP's Dr Shane Oliver says that while the results overall are expected to remain broadly in line with expectations, outlook statements are likely to remain cautious on balance and result in more downgrades to consensus earnings expectations for the year ahead. He says Consensus earnings expectations for 2008-09 are likely to fall from around 15% to 5-10%The key themes so far a low proportion of results coming in better than expected.The proportion of results coming in above expectations is running at just 22% which is well down from an average of 51% over the previous four years whereas 46% of results are in line.In fact this reporting season has seen more companies coming in below expectations (32%) than have come in above (22%). See the chart below. & quot;More significantly though, there have been more companies with cautious or outright negative outlook comments than with positive comments whereas back in August last year the ratio of positive to negative outlook comments was running at 12 to 1. & quot;The upshot is that analyst earnings growth expectations for 2008-09 have been revised down further, albeit from unrealistically optimistic levels around 20%, & quot; Dr Oliver said. & quot;Other themes flowing from the reporting season so far have been a mixed picture for margins, rising interest costs, the negative impact from the strong & #36;A and small caps reporting weaker results than large caps due their greater sensitivity to the weakening Australian economy. & quot;Shares still seem to be trying to build a base after the slump into mid-July and still have the potential for more upside into mid-September. & quot;However, the next few months are likely to remain rough for shares. & quot;More weakness in late September/October is anticipated as the global economic downturn feeds into more profit downgrades, particularly for cyclical sectors, and as bank asset write downs continue. & quot; & quot;Although shares may see more downside over the next few months, we continue to see a decent rally getting underway during the normally strong December quarter. & quot;Some of the pre-conditions for a sustained recovery in shares are falling into place. & quot;The oil price is well off its highs and this, along with weakening economic activity, should help to reduce inflation worries and clear the way for lower interest rates both globally and locally. & quot;There are some tentative signs that the US housing market is close to bottoming with downwards momentum in sales, starts and house prices slowing down and shares are also very cheap. & quot;This all suggests good returns from shares on a one year view, even though the next few months remain uncertain. & quot;Further falls in bond yields are likely as global growth slows and this, with lower oil prices, takes pressure off inflation. & quot;The & #36;A appears to be undergoing a short term bounce after becoming very oversold and this may see it rise back to around & #36;US0.90. & quot;However, the tide is now going out for the & #36;A as the combination of falls in Australian interest rates and a correction in commodity prices suggests the currency likely has more downside ahead of it over the next six months or so (possibly to around US & #36;0.80). & quot; & #160;

Asian stocks, including Australia fell last week, sending the region's benchmark index to its lowest in more than two years.But Friday's quick reversal of Thursday's commodity price spike, led by oil, should steady markets in the region today, and Australia's bounce on Friday off the back of the higher resource stocks, could be sustained if resource stocks are resilient..Oil prices fell more than 5% on Friday in the biggest one-day slide since 2004 as dealers completely reversed the previous day's madcap chasing of oil and commodities. A weakening British pound helped push the US dollar higher.Wall Street kicked higher Friday on the slump in oil and suggestions Lehman Bros might be rescued by a Korean Government-owned bank coming to its aid with a generous deal to buy 50%. It's only a maybe, but some on Wall Street treated it has a fact and sent Lehman shares higher.What should worry investors more is Warren Buffett ruling out any interest from his Berkshire Hathaway company in helping rescue Fannie Mae and Freddie Mac shareholders. He says his company was a shareholder eight years ago but sold when he realised the two companies were producing quarterly profit results to suit Wall Street and not reality.The Standard and Poor's 500 added 14.48 points, or 1.1% Friday to 1,292.20, the Dow jumped 197.85, or 1.7%, to 11,628.06 and Nasdaq was up 1.4%, or 34 points to 2414.71.For the week to Friday, the Dow fell 0.3%, the Standard & #38; Poor's 500 Index lost half a per cent and the Nasdaq lost 1.5%.Traders said the market was the thinnest since last Christmas. Only 888 million shares were traded Friday on the New York Stock Exchange, the lowest volume since December 26.JPMorgan Chase & #38; Co. strategists said investors should buy more financial stocks and US companies that rely on discretionary spending by consumers and sell energy and raw- material producers. But big institutional investors have been doing that since May.That's why financial stocks haven't followed Fannie Mae and Freddie Mac lower. But Morgan failed to tell clients the downside of buying these shares, except for a rotation of investment objectives. & #160;US banks and retailers face a year of misery with the banks having no money to lend and consumers no money to buy anything but essentials.In Asia the MSCI Asia Pacific Index lost 0.8%t to 121.97 to take its losses so far in 2008 to 23%.It was the 4th weekly fall in a row as Asian markets seem to be ignoring the up trend in the US.Japan's Nikkei Index fell 0.7% Friday, China's CSI 300 Index lost 1.5% but Australia's S & #38;P/ASX 200 Index added 1.2% on the resource-driven rebound that will be tested today, despite the futures market showing a 70-plus point rise for the opening today. Friday's rise cut the week's losses to 1%, the 12th weekly fall in 14 weeks.The ASX200 rose 56.2 points, or 1.2% to 4931.4 while the broader All Ordinaries gained 60.6 points, or 1.22%, to 5010.2.BHP Billiton lifted & #36;1.20, or 3.08%, to & #36;40.15, Rio Tinto gained & #36;2.10, or 1.77%, to & #36;121.00 and OZ Minerals surged 19.5 cents, or 11.57%, to & #36;1.88.Babcock & #38; Brown closed up 26 cents, or 11.71%, at & #36;2.48, compared to & #36;4.51 on Monday.Among the banks, Commonwealth Bank was up 78 cents to & #36;41.38, NAB was steady at & #36;23.55 and Westpac added 34 cents to & #36;22.00. The ANZ was up 8 cents to & #36;15.67 after delivering a report explaining its controversial involvement with collapsed securities lender Opes Prime.Insurance Australia Group reported a & #36;261 million annual loss, but says its performance should improve this year. Its shares rose 6 cents to & #36;3.75.And Caltex Australia reported a fall in first-half earnings due to refinery shutdowns affecting production, and a narrowing of refiner margins.Caltex shares finished 20 cents higher at & #36;11.95.Energy stocks were higher Friday and that will reverse today after that sharp fall in oil prices. Woodside finished & #36;1.85 higher, or 3.35%, to & #36;57.00, Santos 72 cents to & #36;18.90 and Oil Search 12 cents to & #36;5.69.Woolworths dipped 84 cents, or 3.11%, to & #36;26.14 ahead of its results this week while Coles' owner Wesfarmers slipped 95 cents, or 2.89%, to & #36;31.95 as investors continued to give it the thumbs down for the poor Coles numbers in its report on Thursday.European shares had the best day for a fortnight Friday rose the most in two weeks as investors speculated takeovers may increase and the plunge in oil prices sent car companies and airlines higher.Europe's Dow Jones Stoxx 600 Index added 1.9% to 283.82, the biggest rise since August 5 and cut the week's loss to 1.5%.Despite the optimism of Friday it was the worst week for shares in the region for a month as reports signaled faster-than-forecast inflation in the US and Germany and a shuddering halt to growth in Britain where second quarter growth stalled, according to figures out Friday.But the optimists in Britain looked at the lower oil price, some corporate activity in insurance, saw the possible Lehman Bros deal and said yippee!The FTSE 100 jumped 135 points or 2.5% to be up 0.9% over the week.

Just when Babcock and Brown and the ANZ Bank thought they had put a miserable week behind them, Friday reminded them of another unresolved problem: a new hitch at the much reduced Tricom margin lending business which both helped recapitalise earlier in the year after it got into trouble and then lost a saviour.SAXO, the unlikely Danish bank that emerged to be the 'white knight' to the rescue of foundering Tricom, now looks like it is riding off into the sunset, without its prize.That's unless talks over the weekend can resolve what seems to have been a series of insurmountable issues: all still secret, but enough to force the situation out into public gaze late Friday afternoon.The news came after trading finished, after Babcock & #38; Brown had closed up 26 cents, or 11.71%, at & #36;2.48, compared to & #36;4.51 last Monday.It was an upbeat ending to a week to forget, but if the Saxo doubts had been known, the bank's shares would not finished on the up.The ANZ rose 8 cents to & #36;15.67 after releasing its internal report into the Opes Prime affair and how the bank managed to lend a billion dollars or thereabouts to it (and a similar amount to Tricom, at one stage!).Now, unless Tricom's founder, Lance Rosenberg, can whip up a third rescue - (Bell Financial Group was the first suitor to sign on, then walk after Tricom almost failed in late January), BNB faces another write-off of around & #36;37 million.That won't cripple the company, but it will erode its meagre and contracting earnings stream at a time when it doesn't want that to happen.And, for its part, ANZ faces exposure to Tricom's loan book, which has apparently been cut from & #36;2.4 billion to & #36;81 million.Saxo popped up in May with a suggested offer of a & #36;20 million injection into Tricom for a 35% stake and an earn-out agreement to take more equity over time.The deal was contingent on completing due diligence and nothing much has been heard of since until the reports late Friday of the deal falling over. The sticking point, according to media reports, on who had responsibility for the bad debts in the loan book.ANZ Chief executive Mike Smith said yesterday it would have to wait and see whether it would create an individual provision for troubled investment house Babcock and BrownSpeaking on ABC TV's Inside Business, he declined to detail its level of exposure to BNB. & quot;We don't give away our customers' exposure, & quot; Mr Smith told ABC television, adding that the bank had not yet struck a specific provision against its exposure to B & #38;B. & quot;It's hard to see how that one will unfold but at present I think the situation with the company is still unravelling, & quot; he said. & quot;We'll have to wait and see. & quot;ANZ on Friday sacked eight staff, including the head of its institutional bank and its chief risk officer, after finishing a review of its securities lending business, which included its relationship with Opes.Mr Smith said that the Opes Prime debacle did not indicate systemic problems at the bank. & quot;However, I don't believe that there is a culture which is sufficiently robust to prevent it rehappening, so therefore there has got to be some remedial action, & quot; he said. & #160;