BUSINESS

Initial Victoria figures released today revealed the estimated insurable value of claims arising from the Victorian floods is nearing $70 million.

Origin Energy Ltd (ASX:ORG) has reported record production of 68.2 petajoules equivalent (PJe) and sales revenues of $424 million for the half year to 31 December 2010.

The resources boom missed ERA Ltd in 2010, but geological fate and mother nature didn't.

Australian agriculture looks set for a positive 2011 with agri-commodity prices expected to stay at elevated levels, but the sector must be prepared to manage a number of challenges, including increasing price volatility, according to a new industry report.

As the state tries to recover from the debilitating effects of the flood, renters wanting to move out of a flood damaged commercial area may have a hard time exiting their lease contracts.

Major Australian supermarkets have given consumers some form of relief when bread and milk products sitting on their shelves saw significant reduction on prices but the initiatives appear to have been cancelled out by soaring petrol cost currently in effect.

Murchison Metals Ltd (ASX:MMX) has appointed Wayne Zekulich as chief financial officer of Oakajee Port & Rail (OPR), developer of port and rail infrastructure for the mining industry in Western Australia’s mid-west.

The latest figures for the insurance industry shows that claims numbers and estimated insurable value of losses as a result of the Queensland floods are rising says Insurance Council of Australia (ICA).

Queensland Gas Corporation (QGC) tapped Motorola Solutions to build its $14.4 million digital radio network that will service the communication requirements of the company’s liquefied natural gas (LNG) projects in southern and central Queensland.

Australian consumers are placing major purchases like property, cars and vacations on hold for the year according to results of a survey conducted by mortgage provider Homeloans Ltd.

Rising food prices and the upward trend of inflation levels are the most pressing concerns that the Reserve Bank of Australia (RBA) must weigh in once it reconvenes on Tuesday to determine the cash rate that will be in effect for February.

Optimism among Australian SMEs declined as private business owners assessed the domestic economy for 2011, according to new research.

National Australia Bank (ASX: NAB) has suffered an outage of its Internet and telephone banking systems today, only two months after a computer system glitch delayed the processing of payments and transactions of thousands of customers.

The Australian sharemarket is currently off by 0.9pct or 46pts to 4826.5, off the back of a weak lead out of the U.S markets and Egyptian political unrest.

Coles-operator Wesfarmers Ltd announced on Monday that sales of the retail firm saw spiking numbers in the first six months of the current financial year despite cautious consumer behaviour seen for the most part of the period.

Major investors of giant mining firms BHP Billiton Ltd and Rio Tinto Ltd reportedly asked the two companies to prioritise share buyback schemes for now prior to launching plans of actively pursuing takeover deals.

By Steve McDonald, Investment Analyst Host of The Oxford Club’s Market Wake-Up Call Saturday, January 29, 2011Editor’s Note: In this edition of the Investment U Weekend Update, Steve tackles… Food Inflation – and How to Cash in on it… Demand for Silver Coins Goes Crazy… Coming Soon to a Market Near You… a Rally: The Sectors Primed to Run Higher The”Slap in the Face” Award* * * * * * * * * *Food inflation in the United States is up around 3% over the past year – 1.5 times the rate of inflation. What’s more, Andrew Wolf of BBT Capital says a 5% jump is not out of the question and could cause real sticker shock in grocery prices. Already, dairy is up 5.5%, while fruit and vegetable prices have risen by 3.5%.In fact, CNBC did a comparison of costs for five basic foods – meat, dairy, vegetables, bread and consumables – and found that prices have jumped by as much as 22% to 27%, depending on where you live. If you haven’t seen the big moves yet in your local market, it’s because for the most part, stores have been absorbing the costs.What you will notice is that the size of packaged goods will be smaller, while the cost has remained the same. That’s a tricky price increase you’re not supposed to notice, but still a price increase.How to Cash in on Food InflationFood commodity traders Jim Bower (of Bower Trading) and Shawn Hacket (of Hacket Trading) say there’s one food that hasn’t seen the big price increases of wheat and corn: Rice. According to both of them, it will run higher. With current rice production at 30 to 40-year lows, this will add fire to the pricing when demand picks up this year, in order to catch up to the production shortfall.While commenting that grains were the big winners last year, Bower and Hacket also both say to look for cattle, dairy cattle, butter and milk prices to rise in 2011. Also, high grains prices will make farmland costs for planting sky-high. But they say food store stocks are not the best way to play this move. Other ways to profit form this inflation is to use exchange-traded notes (ETNs) and exchange-traded funds (ETFs) that focus on food groups like cattle and hogs, for example. Make sure you research them thoroughly before jumping in.The Silver Coin CrazeNicholas Colas, Convergas’ Chief Market Strategist, says the demand for silver coins has tripled in the last 18 months. Why? Because gold is too expensive for the average guy , in addition to concerns about the dollar and the euro, which are driving people to an alternative currency – silver coins. And silver coins are also a good hedge against inflation.Colas says this is a return the days in the late 1970s when silver ran to around US$52 per ounce. Today, we essentially we have a fixed supply of silver, set against an increasing supply of money, which means the foundation is set for a large price run-up. He likes gold and real estate… if you can afford gold and can wait out the real estate market recovery.Coming to a Market Near You Soon… a Rally!Steve East of Height Analytics says we’re likely to see a market pullback in the next few months, but it will merely be a temporary glitch in what he calls a big run in 2011. His prediction for the S&P 500: 1,500 points – over 20% higher. That forecast is based on corporate profits running at all-time highs, with corporate earnings the only V-shaped recovery in the world.East says the market is currently at about 80% to 83% of its full value, so there’s plenty of room to run. The market multiples have to increase. East likes energy, industrials and materials, all of which have lagged so far.The”Slap in the Face” AwardToday’s award goes to the folks who created the sales and marketing for cell phones. Their effort is a true modern wonder. My current cellphone is about six or seven years old. Many of my younger friends laugh at it, but it works and costs me nothing. It’s fine for me. It has a camera that I’ve never used and it’s always worked, which is more than I can say for other phones I own.But they should see the first cellphone I owned – an absolute monster (picture Gordon Gekko’s in the movie”Wall Street”) and was only six or seven years older than the phone I have now. The advances in technology have been ridiculous, but at the time, it was the cat’s meow!My point is this: I won’t buy a so-called smartphone because as soon as I do, it will be outdated and I’ll still look foolish to younger folks. I still won’t use any more of its amazing applications than I do with this one. I hate the fact that I’m supposed to be available 24/7 on these things and texting just seems redundant. I’m not that interested in knowing what my friends are doing all the time. I don’t care.But the job that the marketing and sales players have done to convince buyers that they must have the newest and best phones has been one of the best I’ve ever seen and my hat is off to Verizon (NYSE: VZ), Apple (Nasdaq: AAPL) and AT&T (NYSE: T). They’ve created a market out of thin air and demand that’s beyond comparison.But I don’t want all this phone technology. I find it excessive. It reminds of what my father asked me when I installed an eight-track tape player under the dash of the car I had in college. He said;”Don’t you have a radio in that thing?” I guess nothing ever really changes.Good investing,Steve McDonaldReprinted with permission of the publisher. The above story can be read on the website www.investmentU.com. The direct link is: LINK]Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.Views expressed are not FNArena's (see our disclaimer).FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

Fears over unrest in Egypt sent U.S. stocks reeling Friday to their biggest one-day decline in months and put an end to the market's eight-week win streak, as investors sought safety while oil prices surged.

The US economy grew at a 3.2pct annual pace in the December quarter, short of forecasts tipping 3.7pct growth. US consumer sentiment rose from 72.7 to 74.2 in January.

The Australian Dollar fell back below 99 cents at the start of Asian session on Friday and consolidated around 0.9890 for the remainder of onshore trade.

FNArena has added another video to its Investors Education section on the website.ATW's Jerry Simmons highlights crude oil has landed in a key directional price zone. Breaking out of this zone will determine where prices will move to next. Total duration of this educational video is 43 minutes.SummaryIn this video, Jerry Simmons, Lead Mentor and Co-Founder of the Advanced Trading Workshop, Inc. (“ATW”), New York, analyses the current crude oil market, provides three targets for a possible downside move and three targets for a possible upside move; depending on in which direction the key zone of 87.50 – 88.20 breaks. 30 minutes into the video, Jerry Simmons outlines a possible trade with a sensational 10:1 profit/loss ratio on just 15 ticks risk.CommentsCrude Oil (CL) is re-testing critical support at the $87.50 - $88.20 area. It has been testing and re-testing this area for the past two weeks. If CL breaks this support level, this could foreshadow a more general downturn in the markets in general.However, should CL hold the US$87.50 - US$88.20 area, and should we get a confirmed break-out (B/O) beyond that level, that would significantly increase the chance of a move back up to the US$91 price level and even beyond that to new highs. A B/O to the upside would require the price rising to above US$88.80 by 30 to 40 ticks (“aggressive reversal confirmation”); or US$89.20 - US$89.50 (“primary, or conservative, reversal confirmation”).If the level of US$87.50 - US$88.20 does not hold, then the downside targets are:1. US$84.00 - US$84.502. US$80.00 - US$81.00To view the ATW Strategic Prep Video (originally from November 29, 2010) titled "Analysis CL" click HERE or visit the FNArena Investors Education section of the website.Here's the direct link to the section: http://www.fnarena.com/index2.cfm?type=dsp_front_videosAll views expressed are Jerry Simmons's, not FNArena's (see our disclaimer).Jerry Simmons has over 25 years of full-time trading experience. He is the senior partner and head mentor for the “Masters” Programme within the education system at New York based Advanced Trading Workshop (ATW). ATW recently set up shop in Australia through the establishment of ATW Australia (since mid-2010).FNArena is pleased to have Jerry Simmons as a highly valued contributor to its service which aims at both educating investors and assisting them with their own market analyses.The above mentioned videos can be accessed via the FNArena Investor Education section at http://www.fnarena.com/index2.cfm?type=dsp_minc_education)About ATW AustraliaFounded in June 2010, ATW Australia is a “one-stop-shop for all a trader needs to succeed”: quality education for new traders, superb advanced trading education, fast unfiltered data, a world-leading trading platform, customer oriented competitive brokerage, quality ‘Made in the USA’ specialized trading computers, trading magazines, and the all-important psychological mentoring and coaching for traders. The trading educational products are provided by the Advanced Trading Workshop, Inc. in New York, all other services are provided by a network of partners that were chosen based on their superior products and services in their specific field of expertise. FNArena is one such partner.To learn more visit www.advancedtradingworkshop.com.au.FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

The Australian Open has been focused around tennis since it began in 1905, but according to one sponsorship expert, the Melbourne event is now as much about sponsors leveraging branding opportunities as it is about the game.

Energy Resources of Australia Ltd (ERA) says it will commence an orderly suspension of plant processing operations as a precautionary measure to help ensure that levels in the Tailings Storage Facility (TSF) remain below the authorised operating limit throughout the remainder of the wet season. The suspension is intended to be for a period of 12 weeks.

The AMP's Chief economist and strategist, Dr Shane Oliver looks at why Australian shares have been lagging in past year, and whether this under performance will continue.At the end of 2009 there was much optimism Australian shares would continue to outperform their counterparts in other developed countries.In particular Australia had come through the Global Financial Crisis in good shape without the structural constraints facing many other developed countries, the Australian economic outlook looked good and Australia was well keyed into high growth Asia.However Australian shares have disappointed over the last year: returning just 1.6% in 2010 whereas global shares returned 10.4% in local currency terms.Global shares have reached new recovery highs whereas Australian shares are still below April high.So what happened? What drove the underperformance ?Is it just a short term setback in Australian shares or does it signal something more fundamental?This note focuses on Australian shares relative to traditional global equity markets, as opposed to Asian and emerging markets where we generally expect underperformance by Australian shares.Australia's relative underperformanceAustralia's relative underperformance over the last year appears to reflect several factors:Rising interest rates at a time when interest rates were at or near zero in other developed countries and, in some instances, monetary conditions were still being eased.This led to concerns about the outlook for domestic cyclical sectors, notably retailing and housing, and bank credit growth.It also made bank term deposits look attractive compared to shares (unlike in the US where yields on term deposits are poor).There has also been concern internationally that Australian housing is in a bubble that is about to burst, with bad consequences for Australian banks.The strong Australian dollar has weighed on internationally exposed companies that don't have a hedge in the form of high commodity prices.Concerns Chinese authorities will over tighten and crash the Chinese economy in an effort to beat inflation have also weighed on the Australian share market, given the degree to which many global investors now see Australia as being connected to China.These concerns have all been reinforced by earnings downgrades in Australia whereas earnings expectations have been upgraded globally - see next chart.This has all seen the price to forward earnings ratio for Australian shares fall from 15.3 times at the end of 2009 to 12.7 now, whereas that for global shares has fallen by a smaller amount (i.e., from 14.1 times to 12.5 now).In an absolute sense we see Australian shares rising this year as the global recovery continues.The PE contraction has left Australian shares reasonably attractive, profit growth locally should be solid and Australian companies have scope to re-leverage, reflecting high cash levels and low gearing - see the next chart.However, it is too early to say that the relative underperformance of Australian shares has run its course.Concerns about an imminent collapse in Australian house prices resulting in massive damage to Australian banks are overdone.The threat to domestic growth from the strong Australian dollar and rising interest rates should be largely factored in and in any case recent benign inflation data and the disruptive effects from the floods suggest that the RBA will be on hold out to mid year.However, concerns about Chinese, and, more generally Asian tightening may linger for a while yet. So, on balance, we see global and Australian shares having similar returns this year.A longer term perspectiveIt is worth noting that despite Australian shares lacking the breadth and diversification of global shares, over the last 110 years Australian shares have had better real returns than most global share markets (Swedish shares being the exception). See the next chart.However, within this long run outperformance there have been lengthy periods of relative underperformance (such as in the 1970s due to relatively poor economic management in Australia) and the 1990s (the global tech boom) but also on a short term basis (say in 2003 in the first year of recovery from the tech wreck).While it's too early to say the relative underperformance of the last year is over, there are several reasons to believe the longer term period of outperformance in Australian shares that started in 2000 will continue:Firstly, Australian shares still pay higher dividend yields than mainstream global shares. The average dividend yield on Australian shares is 4% versus 2.6% for global shares.This is important because over long periods dividend payments constitute a significant component of the return an investor gets and so the higher the dividend yield the better (assuming it is not debt financed).Moreover, high dividend yields augur well for future returns, as they signal corporate confidence about future earnings and excessive retained earnings are often wasted.Secondly, the Australian economy offers higher growth potential than the US, Europe and Japan. Australia has stronger population growth which is feeding through into much stronger labour force growth.Australian households have not seen the same deterioration in their net wealth as has occurred elsewhere, public sector debt is very low and Australia is heavily exposed to high growth Asia and strength in commodity prices.All of these considerations are likely to translate into higher growth in earnings for Australian companies over the medium term compared to earnings growth in traditional global share markets.Reflecting the last two points, return projections (see below) based on current dividend yields and likely earnings growth tend to favour Australian shares.Over the medium term (say, five years), a good starting point to project likely returns is to add current dividend yields to likely long term nominal GDP growth as a proxy for earnings growth and hence capital gains from shares.Australian shares with a five year pre tax return projection of 9.5% pa come out well ahead of traditional global shares with a return projection of 6.9%.Finally, franking credits add over 1% to the post tax return from Australian shares for Australian investors.The higher dividend yield from Australian shares and franking credits mean Australian shares have a 2.9% pa return advantage over traditional global shares for Australian based investors.Concluding commentsAustralian shares have underperformed traditional global shares over the last year on the back of monetary tightening, worries about a housing bubble, the strong $A and Chinese tightening.While many of these should be largely factored in and we see better returns this year, some still linger (notably Chinese/Asian tightening) so it is too early to say that the period of relative underperformance is over.However, on a strategic, or five year basis, the combination of higher dividends, better growth prospects, less structural constraints and franking credits for Australian based investors suggest investors should maintain a bias towards Australian shares over traditional global shares, although maybe not as big a bias as was warranted a decade ago.

The Commonwealth Bank of Australia (ASX: CBA) has announced a major fundraising initiative for Queensland’s flood affected cricket clubs.

Local Tenant Advice and Advocacy and Home Assist Secure services are available for Queenslanders in need with service providers able to apply for up to $10,000 in extra funding.

Revenue earned from the lease of the Abbot Point Coal Terminal will be used to fund reconstruction efforts in Queensland.

The changing landscape of the retail industry pushes into forefront the increasing attractiveness of online operators, which industry players said have been enticing both consumers and investors attentions for their value offerings and return promises.

The local share market remains under selling pressure at lunchtime in the East, following a muted offshore lead.