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90 at 9: 'Don't get too excited by GDP'; Fed extends purchase program

90 at 9: 'Don't get too excited by GDP'; Fed extends purchase program
Click here for this morning's video. Alex Tarrant presents 90 at 9 in association with ASB. New Zealand's Gross Domestic Product (GDP) rose 0.1% in the June quarter from March as log exports to China and dairy exports rose. Overall, exports rose 4.7% over the quarter, while imports were down 3.8%. However, we're being warned no to read too much into the rise, and revised figures from Stats NZ could show the economy experienced its sixth consecutive quarter of recession. Growth over the second half of the year is expected to be subdued. Pyne Gould Corporation, which owns Marac Finance, announced plans for a NZ$237 million fully underwritten rights issue. PGC could raise as much as NZ$270 million, with a further NZ$15 million to NZ$30 million placement and share holder plan following the commencement of the initial raising. The plan, announced yesterday, could see director George Kerr increase his stake in PGC from 10% to 19.99%. Fonterra will keep its 2008/09 payout at NZ$5.20, it announced yesterday when presenting its results to the year to July. Revenue was down over the year as commodity prices fell, although operating profit rose. Fonterra said it had managed to get its gearing ratio down to 52.7% from 61.5% in January. However this is still above the 45%-50% mark Fonterra is trying to reduce its gearing ratio to. Finally, the US Fed said it would slow its purchases of mortgage backed securities and housing agency bonds. However it also said it would look to execute the program by the end of the first quarter of 2010. It had initially signaled the program would cease at the end of this year. The Fed left its benchmark interest rate at 0-0.25%, saying it would stay "exceptionally low" for an "extended period". Hmmm, where have we heard that before...?

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