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.InfoNavNewsletterSubscribeTextBox { margin-right: 0px; margin-top: 0px; width: 152px; } </style> </head> <body> <table class="" border="0" cellpadding="0" cellspacing="0"> <!-- begin main table--> <tr> <td width="170"> <!-- empty tc on left--> </td> <td align="left"> <!-- tc to contain all content and keep in center--> <table cellpadding="0" cellspacing="0" border="0"> <!-- table to create header --> <tr> <td height="" width="180" align="left"> </td> <td align="left"> </td> </tr> <tr> <td valign="top" align="left"> <table cellpadding="0" cellspacing="0" border="0"> <tr> <td valign="top" height="0"> <img src="http://www.ibisworld.com.au/common/newsletter/images/homepagelogo3.gif" alt="" /> <br /> </td> </tr> </table> </td> <td align="left" width="450" valign="top"> <table cellpadding="0" cellspacing="0" border="0"> <tr> <td width="440" align="left" valign="top"> <p style="font-size: 11px; text-align: right;"> | <a style="font-size: 11px;" href="#aMember">Membership</a> | <a 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style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/TOCtopright.gif" alt="" /> </td> </tr> </table> <table border="0" style="width: 354px;" cellpadding="0" cellspacing="0"> <tr> <td class="DarkGray"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="1" width="1" /> </td> <td valign="top"> <table border="0" cellpadding="3" cellspacing="0"> <tr> <td rowspan="9"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="183" width="1" /> </td> <td colspan="2"> <p class="heading1"> IN THIS EDITION:</p> </td> </tr> <tr> <tr> <td width="30" align="center"> <a href="#aIndustry"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /></a> </td> <td class="tdToc"> <a class="menuitem" href="#aIndustry">INDUSTRY - Subprime in Australia: as the Dust Settles </a> </td> </tr> <tr> <td align="center"> <a href="#aFocus"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /> </a> </td> <td class="tdToc"> <a class="menuitem" href="#aFocus">COMPANY - Tabcorp struck by first loss in 14 Years </a> </td> </tr> <tr> <td align="center"> <a href="#aRisk"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /> </a> </td> <td class="tdToc"> <a class="menuitem" href="#aGlobal">GLOBAL Trends - China and Subprime </a> </td> </tr> <tr> <td align="center"> <a href="#aRisk"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /> </a> </td> <td class="tdToc"> <a class="menuitem" href="#aRisk">INDUSTRY Risk - A Forrest of Jobs for Indigenous Australians</a> </td> </tr> <tr> <td align="center"> <a href="#aEconomic"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /> </a> </td> <td> <a class="menuitem" href="#aEconomic">Economics & Demographics Scoreboard</a> </td> </tr> <tr> <td align="center"> <a href="#aRuthven"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /> </a> </td> <td> <a class="menuitem" href="#aPresentation">Phil Ruthven - Presentation Material</a> </td> </tr> <tr> <td align="center"> <a href="#aUpdated"> <img border="0" src="http://www.ibisworld.com.au/common/newsletter/images/placeholderarrow.gif" alt="" /> </a> </td> <td> <a class="menuitem" href="#aUpdated">Updated Reports - 20 Reports!</a> </td> </tr> </table> </td> <td class="DarkGray"> <img src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="1" width="1" /> </td> </tr> </table> <table border="0" style="width: 354px" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/TOCbottomleft.gif" alt="" /> </td> <td class="WhiteBottom"> <img src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="1" width="1" /> </td> <td style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/TOCbottomright.gif" alt="" /> </td> </tr> </table> </td> </tr> </table> </td> <td valign="top"> <table cellpadding="0" cellspacing="0" border="0"> <tr> <td valign="top"> <img src="http://www.ibisworld.com.au/common/newsletter/images/audate.gif" alt="" /> </td> </tr> <tr> <td height="10" /> </tr> <tr> <td> <table border="0" style="width: 256px" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/PinkTOCtopleft.gif" alt="" /> </td> <td class="WhiteTop" style="background-color: #DDCDC6;"> <img src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="1" width="1" /> </td> <td style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/PinkTOCtopright.gif" alt="" /> </td> </tr> </table> <table border="0" style="background-color: #DDCDC6; width: 256px" cellpadding="0" cellspacing="0"> <tr> <td class="DarkGray"> <img src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" width="1" /> </td> <td height="161" width="308"> <p class="heading1" style="text-align: center;"> DID YOU KNOW?</p> <p class="textCenter"> 206 of Australia s 478 industries rank as either highly globalised, or medium on a trend to increasing. 106 of these are from the manufacturing sector. </p> </td> <td class="DarkGray"> <img src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="1" width="1" /> </td> </tr> </table> <table border="0" style="width: 256px" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/PinkTOCbottomleft.gif" alt="" /> </td> <td class="WhiteBottom" style="background-color: #DDCDC6;"> <img src="http://www.ibisworld.com.au/common/newsletter/images/cp.gif" alt="" height="1" width="1" /> </td> <td style="width: 5px"> <img src="http://www.ibisworld.com.au/common/newsletter/images/PinkTOCbottomright.gif" alt="" /> </td> </tr> </table> </td> </tr> </table> </td> </tr> </table> </td> </tr> </table> <!-- end header--> <table cellpadding="0" cellspacing="0" border="0"> <!-- main content--> <!-- industry in focus article --> <tr> <td> <a id="a4" name="aFeature"></a> <table border="0" cellpadding="0" cellspacing="0"> <tr> <td> <a id="a3" name="aFeature"></a> <p class="heading2"> <br /> In INDUSTRY: Subprime in Australia: as the Dust Settles </p> <table border="0" cellpadding="0" cellspacing="0"> <tr> <td valign="top" width="620" align="left"> <table border="0" cellpadding="0" cellspacing="0"> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> With venerable US financial institution Lehman Brothers the latest casualty in the ongoing struggle against the effects of subprime, and Fannie Mae and Freddie Mac receiving Federal Government bailouts, many are asking the question  is Australia as 'decoupled' as first thought? In short, the answer is no. IBISWorld expects the rest of 2008 and 2009 to be little or no better for the country's financial institutions than the past two years since subprime reared its ugly head. While Australia, with the support of a buoyant China and India, is resisting the financial collapses being witnessed in America, is still suffering some nasty side effects. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> It is a new financial reality the world faces, with the traditional run on the bank being replaced by frantic late-night phone calls to brokers, as the nation's financial players try to reduce their exposure to risky investments that were once thought to be rock-solid. These plummeting asset prices and unavailable credit have hurt few industries more than the <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=1820"> Investment Banks</a> industry. After growing at double-digit rates for half a decade, revenue is set to increase by only 1.4% in 2008-09 and 2009-10. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Likewise, <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=1822"> Funds Managers</a> firms appear set for a tough run, with revenue dropping an estimated 10.4% in 2007-08, and minimal growth of 1.4% in 2008-09. <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=513"> Credit Unions</a> and <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=512"> Building Societies</a> are also at risk, with the two industries set to decrease revenue by around 3% each in 2008-09, with 2009-10 little better. Even the major <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=1818"> National Banks</a> are not immune, with forecast slow growth over those two years of 1.4% and 0.5% respectively. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> However, it is not all bad news. Dire as the constant news updates have been for sometime, and the litany of folding financial giants that accompanies it, it is anticipated that this subprime-fuelled shock is just that: a shock. The <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=1818"> National Banks</a> that are expecting such a poor 2008-09 look set to stage a solid, steady recovery over the five years following, including nearly 6% growth in 2011-12. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=1820">Investment Banks and Securities Brokers</a>, too, will recover strongly, as the boldest firms move to take advantage of devalued markets. For the five years after 2008-09, the industry is forecast to grow by between 15% and 20% each year. The lesson from this is, while the longer-term forecast is somewhat rosier, it is likely to get worse before it gets better. </td> </tr> <tr height="5"> <td> </td> </tr> </table> </td> </tr> </table> </td> </tr> <!--end industry in focus article --> <tr> <!-- company focus article --> <td> <a id="aFocus" name="aFocus"></a> <p class="heading2"> <br /> COMPANY Connect: Tabcorp struck by first loss in 14 Years </p> <table border="0" cellpadding="0" cellspacing="0"> <tr> <td valign="top" width="620"> <table border="0" cellpadding="0" cellspacing="0"> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Tabcorp Holdings Limited conducts wagering, gaming and casino operations throughout Australia. Casino operations include hotels, apartment complex, theatres, restaurants and bars. Gaming includes gaming machine and Keno operations in licensed clubs and hotels. Wagering consists of fixed odds betting activities as well as national and international broadcasting of racing and sporting events. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Tabcorp reported its first loss in 14 years following a substantial write-down in the value of its licence to operate gaming machines in Victoria. The write-down was in response to the change in the future industry structure for gambling in Victoria. In April 2008, the Victorian Government announced that from 2012 onwards gaming machine licences will no longer be held by the two current operators, Tabcorp and Tattersall s, but will be held directly by individual hotels and club venues. The Government also ruled out refund of the original licence fee paid by both companies. As a result, Tabcorp took a charge of $487.7 million in its FY2008 reported earnings. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Tabcorp also wrote down the carrying value of its wagering business by $194 million, underpinning the challenges faced by this business in recent years and the changes in the competitive environment. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Tabcorp reported a net loss of $164.6 million for the year ended 30 June 2008, compared with a profit of $449.5 in the previous corresponding period. This result not only reflects the above non-cash charges incurred during the year, but also the impact of higher gaming taxes, smoking bans and an outbreak of equine flu in the country. Lower discretionary spending as a result of higher interest rates and higher living expenses also began to hurt the company's profitability. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Segment Performance </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Casinos: Earnings before interest and tax (EBIT) were $368.8 million, down 4.5%. This result underscored tougher trading conditions in the second half as well as the impact of smoking bans in New South Wales. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Gaming: EBIT decreased 0.3% to $261.4 million as a result of the higher Gaming Machine Levy imposed by the Victorian Government. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Wagering: EBIT grew by 4.2% to $264.4 million despite the outbreak of the equine influenza, which wiped out EBIT by approximately $17 million. </td> </tr> </table> </td> </tr> </table> </td> </tr> <!--end company in focus article --> <tr> <td> <table border="0" cellspacing="0" cellpadding="0"> <tr> <td> <p class="heading2"> <a id="global" name="aGlobal"></a> <br /> GLOBAL TRENDS: China and Subprime </p> </td> </tr> <tr> <td valign="top" width="620"> <table border="0" cellpadding="0" cellspacing="0"> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> In amongst all of the turmoil surrounding Lehman Brothers, Merrill Lynch and the Fannie and Freddie twins, there has been little discussion of the impact of subprime and broader US economic woes in the Chinese economy. It is common knowledge today that the Chinese economy is growing at extreme speeds, and that it is driven by a booming manufacturing sector. But what about financial markets? What about the Chinese equivalents of the financial providers that are experiencing so much hardship in the US and Europe? </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> In short, China's financial institutions are laughing all the way to the bank. With only 0.09% of their assets in the subprime market, China is effectively far removed from the turmoil across the Pacific. In order to keep their economy stable, China's banks are more heavily invested in US government bonds, which tend to perform better in times such as these. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> What's more, China's largest bank, Industrial & Commercial Bank of China (ICBC) announced profits of US$9.4 billion for first 6 months of 2008, and has assets amounting to around US$1.4 trillion. However, with US$1.7 trillion in US government debt, there have been tremors. But a tremor in a Chinese bank would be stunning success right now in the US. The <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=news&type=global&indid=946"> Commercial Banks</a> industry is expected to show growth of 'only' 4.5% in 2008, interrupting a long streak of double digit growth, a trend that will continue from 2009 until the foreseeable future. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Similarly, but more spectacularly, China's <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=news&type=global&indid=951"> Securities Investment</a> industry is set to grow by 25.6% in 2008 and 35.4% in 2009, shrugging off any concerns about a global downturn, and taking investment money that is being directed away from riskier US options. While this does not quite compare to the astonishing 221.5% growth the industry had in 2006, it is still rock-solid performance in a nervous international market. All in all, there are few indications that China's financial institutions will suffer any serious or long-lasting effects from the current turmoil taking place on Wall Street, and may well be the source of any potential recovery. </td> </tr> </table> </td> </tr> </table> </td> </tr> <!--end global article --> <tr> <!-- industry risl article --> <td> <table border="0" cellspacing="0" cellpadding="0"> <tr> <td> <a id="a5" name="aRisk" class=""></a> <p class="heading2"> <br /> Industry Risk: A Forrest of Jobs for Indigenous Australians </p> </td> </tr> <tr> <td valign="top" width="620"> <table border="0" cellspacing="0" cellpadding="0"> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> Australia's richest man according to Forbes rich list, Andrew Forrest, chief executive of Fortescue Metals Group, has recently announced a plan aiming to create 50,000 jobs for indigenous Australians. The plan involves cooperation between government, industry, and local indigenous communities. Indigenous Australians who decided to participate would be given three to four months of training by government education organizations and those that passed the short courses would be guaranteed a job in a participating business, where they would be given additional on-the-job training. This would reduce the risk of moving away from traditional homes in search of work that may not exist. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> The plan is expected to benefit the <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=601"> Technical and Further Education industry</a>, which is likely to receive additional government funding to supply training to prospective indigenous employees. Risk in the industry is forecast to be towards the lower end of MEDIUM in 2008-09, similar to the level of the previous two years, but higher than the LOW and MEDIUM-LOW levels of 2004-05 and 2005-06. The higher level of risk over the last few years is due to slower growth in government funding. </td> </tr> <tr height="5"> <td> </td> </tr> <tr> <td class="tabletext"> The <a href="http://www.ibisworld.com.au/redirect.aspx?partnerid=News&indid=569">Employment Placement Services industry</a> may also benefit from the initiativ