The boom in Spain … Remember how Joe Hockey boasted that our first-quarter GDP growth of 0.9% was one of the best? Well, we’ve been bested by the Spaniards. The Spanish economy grew 1% in the second quarter compared with the three months to March, unemployment fell, and inflation remains very low. The June-quarter growth was the fastest in seven years. In fact the eurozone’s fourth-largest economy grew 3.1% year-on-year in the second quarter, largely driven by internal demand and strong hiring ahead of the summer tourism season as the country continues to recover from a 2008-13 slump. The March quarter recorded growth of 0.9%, quarter on quarter and 2.7% over the year. June-quarter unemployment rate fell to 22.4%, the lowest level since 2011. Still too high, but on the improve, and Spain is not going broke, and growth is accelerating, regardless of what happens in Greece. — Glenn Dyer
It’s boom boom in Ireland. And Ireland’s economy is hot hot hot! Data out overnight showed it grew an impressive 1.4% in the first quarter of this year, compared to the previous three months, helped by solid growth in construction industry and the distribution, transport, software and communications sector. And to underline this boom, GDP growth in the final three months of 2014 has been revised up substantially, from 0.2% to 1.2%. Year on year, Ireland’s GDP growth grew 6.5% in the first quarter, up from the 6% year-on-year growth rate recorded for the December quarter. And the year-on-year figure for the December quarter of 2014 was revised up, to 6% from 4.1% previously. And to add to the boomy feeling, Sweden posted GDP growth of 1% in the second quarter, according to new preliminary stats, up from 0.4% in the March quarter. Year-on-year growth is up by 3%, above forecasts for growth of 2.5%. That’s despite bouts of deflation and disinflation during the quarter and the first half of this year. So Spain, Sweden and Ireland are all setting the pace for the rest of Europe, and of course, Joe Hockey. — Glenn Dyer
Judges slams door on shareholder resolutions. The Australasian Centre for Corporate Responsibility is considering an appeal after the Federal Court dismissed its case to have the Commonwealth Bank ordered to accept non-binding advisory resolutions proposed by the required 100 shareholders at its 2014 AGM.
Justice Jennifer Davies, a former tax barrister with long experience in commercial matters, opted not to overturn the precedent set in the 1986 case NRMA vs Parker, which has limited the ability of shareholders to put up US-style advisory resolutions for the past 29 years. The 17-page judgment concluded that the Parker decision was right and Australian shareholders have limited powers, save for appointing directors to protect their investments. Maybe it’s time for some legislative reform given that 99.9% of all resolutions voted on at ASX-listed company AGMs are put up by the directors and these directors receive an average 96% of the vote in favour of themselves.
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As Australia’s biggest single investor, CBA found itself in the slightly invidious position of having to argue in favour of limiting the rights of investors. An appeal would be heard in front of three judges, although it may be subject to future fundraising by the ACCR given the cost of such an action. Davies said she would make a costs order after receiving written submissions from the parties. It would be surprising if the CBA went so far as to wind up the ACCR, which is a small Canberra-based group that rose from the ethical investment movement. — Stephen Mayne
Big Oil finding smaller profits, losses. Shell, Pemex, ConocoPhillips, Linn Energy, Total — the list of oil companies reporting rotten June-quarter results, slashing spending, jobs and anything else they can find will grow tonight with giants ExxonMobil and Chevron both due to report. Exxon is likely to do a bit better than its peers, but Chevron is expected to follow Shell and BP in another round of spending cuts on exploration and development work, but spending on the Gorgon and Wheatstone LNG projects in Australia will continue (Gorgon is nearly completed). Shell’s preferred replacement cost profit fell to US$3.4 billion from, US$5.1 billion in the second quarter a year ago, and a further 6500 jobs are to be cut, along with a 20% cut in investment over the rest of this year. Shell said it was battening down for oil prices to remain low for a couple of years. — Glenn Dyer