THE DISTILLERY: Lease licked

Lend Lease copped some punishment from the market thanks to a picture that boss Steve McCann painted that was probably a shade or two darker than he intended. Two commentators take pretty similar lines analysing this story.

Also in this morning’s edition of The Distillery, National Australia Bank boss Cameron Clyne could hardly care less about the Coalition’s plans for a financial industry inquiry.

But first, The Australian Financial Review’s Robert Harley describes the result of the three announcements as an “own goal”, even though the news was McCann delivered wasn’t so bad.

“The global group will combine its construction businesses in Australia, including Abigroup and Baulderstone, and create new sector-specific businesses in building, engineering and infrastructure services. At the same time it sold its stake in a Singapore project for a better than expected price, and will pay less tax, ensuring the 2013 profit will be ahead of 2012. In isolation each announcement was positive. Combined they touched the full gamut of investor concerns. Down went the stock.”

Did it ever! To the tune of 7.5 per cent no less. The Australian’s John Durie is tapping a similar dance step this morning, courtesy of McCann’s news, by pointing out that yesterday’s dive has wiped out the whole year’s gains.

“Now it can safely be assumed McCann was trying to do the exact opposite. He stressed the trading update was not an earnings downgrade, but that was precisely the impression he left. McCann, for his part, doesn’t understand the confusion. One issue concerns the sale next financial year of the Bluewater shopping centre in Britain which could leave an earnings hole to be filled.”

Meanwhile, National Australia Bank chief Cameron Clyne gave a wide-ranging briefing yesterday to a select group of journalists. The Australian Financial Review’s Matthew Stevens offers an epic on the briefing this morning, where he describes how Clyne wanted to make clear his “abundant ambivalence” to the prospect of a Coalition government inquiry into the financial system.

“He said he hadn’t put much thought into what it might helpfully contemplate beyond, perhaps, pursuing the usual territory of funding structures. Before observing that the mission-shaping decision of any inquiry will be the appointment of its chair, Clyne said the obvious issue is that ‘we are still reliant on foreign funding...That is fine in and of itself, but there is opportunity to talk a lot about increasing the corporate bond market here; thinking around how Australia funds itself is worthy. If you do play out the idea that there is $700 billion of infrastructure that needs to be built here over the next decade, how will that be funded? What sort of funding models will exist? Where will our funding come from? Those sorts of things. That seems to be a worthy topic. As for everything else, that is up to them.’”

Speaking of briefings, Fairfax’s Elizabeth Knight shows how some panic is setting in for investment bankers and fund managers in the wake of the Newcrest Mining analyst briefing controversy. The fear is that the corporate regulator, the Australian Securities and Investments Commission, could bring in more stringent rules for analyst and institutional investor briefings.

“While Newcrest management denies any wrongdoing, it is hard to imagine that ASIC, under the public glare, will not be chasing this down. Selective briefings is one of those issues that falls into a grey area. Analysts and large investors do often speak to management – a site tour, a coffee, a lunch or in the box in a sporting event. The line gets drawn when the company representative (the insider) informs someone of facts that are or could be price sensitive.”

Elsewhere, Fairfax’s Adele Ferguson is still holding Commonwealth Bank to account over the whistleblower controversy. The respected business journalist reports that a financial dispute specialist is calling for ASIC to reopen all settlements from CBA planners “where fraud has been proven or where they failed to investigate strong allegations of fraud”.

In other news, Fairfax’s Tim Colebatch sees no sensible alternative for Labor than to install Kevin Rudd as prime minister again, adding that the guy doesn’t deserve it.

The Australian Financial Review’s Chanticleer columnist Tony Boyd says the solution by New South Wales Treasurer Mark Baird for the $10 billion WestConnex toll road has addressed two problems when it comes to infrastructure funding.

The first is government worries for its credit rating and the second is private sector fears of risky traffic forecasts.

“Baird’s solution deals with both issues by taking the debt and equity risk off the government balance sheet while using government funds to take the project to the stage where traffic is known and delivering revenue.”

This could be a model that could unlock billions around the country for much needed infrastructure.

And finally, The Australian’s contributing economics editor Judith Sloan has a big crack at the ACTU’s latest ad campaign, which was launched during the State of Origin… and she doesn’t like rugby.