ADELAIDE, June 19 (Reuters) – Australia’s low interest rates are working to lift home building, borrowing and consumer demand, a senior central banker said on Wednesday.

Answering questions at a mortgage conference, the Reserve Bank of Australia’s (RBA) head of domestic markets, Chris Aylmer, pointed to a pick up in building approvals, housing loans and auction clearance rates as signs that low rates were boosting demand.

‘We’re reasonably confident a recovery is underway,’ he said.

The central bank cut rates to a record low of 2.75 percent in May in part too enliven the housing market and household consumption as a long boom in mining investment nears a peak.

(Reporting by Wayne Cole) Keywords: AUSTRALIA ECONOMY/CENBANK

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By Susan Kelly

CHICAGO, June 19 (Reuters) – Shares of U.S. hospital operators have been on a tear this year, on average posting triple the gains of the broader stock market, as investors tallied up the benefits of President Barack Obama’s healthcare reform.

While some on Wall Street have held back amid signs of trouble as U.S. states prepare to implement the reform law, long-term investors still see more reward than risk on the horizon for hospital stocks.

They expect company earnings to strengthen as more Americans gain insurance coverage and hospitals lose less money treating the uninsured. The reform law has spurred consolidation among hospitals, and further merger activity could lift valuations.

‘We believe there is still a significant amount of upside in the stocks, particularly if you believe these companies have the ability to sustain their earnings growth through acquisitions,’ said Jessica Bemer, analyst with Snow Capital Management. Snow Capital identified the potential in hospital shares early on and has holdings in Community Health Systems Inc and Health Management Associates Inc.

Since the start of the year, shares of the largest publicly traded hospital chain, HCA Holdings Inc, are up 34 percent, while No. 2 Community Health has climbed 71 percent. Tenet Healthcare Corp and Universal Health Services Inc each have risen 50 percent; and Health Management, fueled by takeover rumors, has leaped 79 percent. The Standard and Poor’s 500 index, by comparison, is up 15 percent.

(Graphic: http://link.reuters.com/dad98t )

For the top five hospital operators, analysts are projecting combined growth of 21 percent in adjusted earnings per share in 2014, according to Thomson Reuters I/B/E/S data. That would represent a price to earnings ratio for the group of 12.76, based on 2014 estimates and current share prices, compared with 14.5 for the SP 500.

Once investment underdogs, the stocks began to take off after the Supreme Court upheld most of Obama’s health reform law last June, paving the way for millions of uninsured Americans to obtain coverage in 2014. The rally stumbled this spring when hospital companies reported surprisingly low admissions, and government estimates suggested that not everyone who is eligible will sign up for ‘Obamacare’ on day one.

Other investors have expressed concern about the many variables still to be worked out, including whether key Republican-led states like Texas and Florida will accept federal funding to expand their Medicaid programs for the poor, helping pay for the care that hospitals in those regions now deliver for nearly no compensation.

‘It will be rough, it will be rocky, and it will take time,’ said Tim Nelson, analyst with Nuveen Asset Management, which owns shares of Universal Health. Nelson believes other names in the sector are fully valued.

ROLLING OUT REFORM

The biggest benefit from health reform is expected to be an influx of patients whose treatment will be paid for either through expanded Medicaid programs or with private insurance obtained from state-based exchanges that will take effect on Jan. 1.

That should help drive down the percentage of revenue now being written off as bad debt for treating the uninsured, which can be up to 20 percent or greater for some hospital chains.

‘They definitely will be winners at least in the near term under healthcare reform,’ said Jeff Jonas, a portfolio manager for Gabelli Funds, which hold shares of HCA and Tenet. ‘We should see some pretty significant reductions in their bad debt in particular and maybe a little increase in volume.’

Jonas estimates HCA and Tenet stocks each could add another 10 percent this year.

Another positive for companies in the sector has been the ability to refinance debt loads at significantly lower interest rates. ‘They’ve locked it in for years to come,’ said Jonas.

Hospitals are also managing their own expenses better than in the past. Efforts to centralize supply sourcing are driving annual decreases in prices for medical devices such as heart stents and orthopedic implants. Bringing doctors on staff by acquiring physician practices has also helped to control costs.

‘It is going to be a multiyear period of benefiting from health reform,’ Jonas said.

The drive for efficiency is accelerating consolidation across the industry, as hospitals partner with other facilities within geographic regions to form networks that can offer a wider range of specialties or reduce duplication.

Many uncertainties remain. Hospitals still don’t know how they will be reimbursed under health plans sold on the state insurance exchanges. The extent to which employers drop commercial coverage for their workers and direct them to the exchanges is another major variable. And states are progressing at different rates in setting up their exchanges.

The federal government hopes to get 7 million Americans to sign up for health plans on the exchanges in their first year, and 24 million by 2016, aided by subsidies to purchase coverage. Enrollment begins Oct. 1 for plans that take effect in January.

Perhaps the biggest wildcard for hospitals is the expansion of Medicaid, which is being determined state by state and will affect companies differently based on where their facilities are located. HCA’s stock performance, for example, has lagged its peers, Nelson said, because of its concentration of hospitals in Florida, where the state legislature has blocked Republican Governor Rick Scott’s support for Medicaid expansion.

Nelson said there was a real opportunity to reduce the amount spent on treating uninsured people for free, but he added: ‘How real it is and how big just depends upon the geographic footprint.’

If high-deductible health plans, which have become increasingly popular with small employers, predominate on the insurance exchanges, hospitals may not see as great a reduction in bad debt expense as hoped, because they will still need to collect the uncovered portion of a patient’s bill, he said.

Weak demand for healthcare services dragged on hospitals’ earnings in the first quarter, exacerbated by the still-high jobless rate and the rising number of patients with high-deductible health plans who are staying away from the doctor. Some do not see that picture improving soon.

‘The economy isn’t picking up fast enough. I think the hospitals are in a holding pattern at least through the summer and possibly into fall, until we get clarification on Obamacare,’ said Les Funtleyder, healthcare strategist at investment firm Polliwog, which does not own hospital stocks.

‘Over time, if the economy improves and we get visibility on Obamacare, the valuations still have a little bit of room on the upside,’ he said. ‘I wouldn’t short them.’

(Reporting by Susan Kelly in Chicago; Editing by Michele Gershberg and Claudia Parsons) Keywords: HOSPITALS STOCKS/

(susan.kelly@thomsonreuters.com)(1-312-408-8134)(Reuters Messaging: susan.kelly.reuters.com@reuters.net)

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By Alister Bull

WASHINGTON, June 19 (Reuters) – Federal Reserve policymakers will likely announce on Wednesday that they will keep buying bonds at a monthly pace of $85 billion, while keeping their options open to scale back the program later this year if the U.S. labor market continues to improve.

Economic data since the 19 officials met in May has been mixed. Employment growth was steady and consumers kept spending despite the drag of tax hikes and government spending cuts. But inflation slowed further beneath the Fed’s 2 percent target.

The policy-setting Federal Open Market Committee will announce its decision at 2 p.m. (1800 GMT). Fed Chairman Ben Bernanke will hold a news conference 30 minutes later.

‘Should the outlook improve as the Fed expects, then it may continue to lay the groundwork for a tapering of purchases at upcoming FOMC meetings,’ Michael Gapen, an economist with Barclays in New York, said.

‘However, should the data evolve more in line with our forecast, then we see the Fed as refraining from tapering until the first quarter of 2014,’ he wrote in a note to clients. Barclays currently expects weaker 2013 GDP growth than the Fed has forecast.

Bernanke will likely take care to draw a bright line between the possibility of a slower pace of bond purchases, which would still add stimulus to the economy, and an actual tightening of monetary policy that would take it away.

The U.S. central bank has held overnight interest rates near zero since December 2008 while more than tripling its balance sheet to around $3.3 trillion with its bond buying.

Economists expect rates to stay on hold until 2015, but the view of the lift-off date in financial markets has shifted forward since Bernanke fired up speculation last month that the Fed could soon curb its asset buying.

The chairman is also likely to be quizzed on his future plans after President Barack Obama hinted in an interview on Monday that Bernanke was ready to step down once his current term expires on Jan. 31, 2014.

INFLATION WATCH

Any change in how officials describe inflation that places more stress on recent low readings could signal a desire to push back expectations of bond tapering. Bernanke’s comment on May 22 that the Fed could begin to curtail purchases at one of its ‘next few meetings’ rocked financial markets and drove bond yields sharply higher.

The consumer price index was up 1.4 percent in May from a year ago. But the PCE price index, the Fed’s preferred inflation gauge, rose just 0.7 percent in the 12 months through April, the most recent reading, less than half the Fed’s target.

The Fed in recent months has played down the threat that low inflation could be a harbinger of a damaging deflation and has argued that inflation would head back toward the 2 percent goal.

Still, many economists think the central bank would be loath to ease up on its stimulus until inflation turns higher.

In its last statement on May 1, the Fed acknowledged inflation had been running ‘somewhat below’ its goal, but noted that longer-term inflation expectations had remained stable.

‘The most important moving part is how the Fed characterizes inflation. At the May meeting, they studiously avoided discussing the drop in inflation,’ Vincent Reinhart, Morgan Stanley’s chief U.S. economist, said.

Minutes of the May meeting revealed a wide split among policymakers. A ‘number’ of the 19 supported slowing the pace of bond purchases as early as this week’s policy meeting. But ‘most’ wanted evidence the recovery was proceeding before scaling back; this group also argued for the Fed to be ready to raise the pace of purchases if needed.

In the end, the Fed inserted language into its statement to explicitly acknowledge that bond buying could be dialed up as well as down if the recovery faltered as it sought to preserve its policymaking flexibility.

No change in that language is expected on Wednesday.

The central bankers will also release a quarterly summary of economic projections, including forecasts for growth, inflation and unemployment, plus when they each think the Fed should start raising interest rates.

The Fed says it will not lift rates until unemployment hits 6.5 percent or lower, provided that the outlook for inflation stays under 2.5 percent. The U.S. jobless rate in May was 7.6 percent, and economists do not expect the threshold to be met for a couple of years.

(Reporting by Alister Bull; Editing by Tim Ahmann and Leslie Adler) Keywords: USA FED/

(alister.bull@thomsonreuters.com)(+1-202-898-8329)(Reuters Messaging: alister.bull.thomsonreuters.com@reuters.net)

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By Lucia Mutikani

WASHINGTON, June 19 (Reuters) – Where have all the carpenters gone? Home builders across the United States are scratching their heads for an answer as they struggle to assemble crews to keep up with growing demand.

In some parts of the country, the shortage of skilled carpenters – especially framers – is so bad that builders cannot get projects off the ground and it is taking as much as two months longer than normal to complete a project.

‘Right now I have framing material sitting on the job site with the foundation on the ground,’ said Stephen Paul, executive vice president at Mid-Atlantic Builders in Rockville, Maryland. ‘It’s been sitting there a week because I have not been able to get a framer to start the house.’

According to a National Association of Home Builders survey published last month, 48 percent of single-family home builders could not find framing crews in the first three months of this year, and builders in all four regions struggled. In the middle of last year, that figure stood at just 30 percent.

The demand for labor has been driven by the decisive recovery the housing sector is finally mounting.

According to industry figures released on Monday, a majority of U.S. homebuilders view conditions for new construction as favorable for the first time since the housing crisis began seven years ago, and home prices have been climbing.

To be sure, it’s hard to explain a labor shortage when unemployment in the sector is over 10 percent, and some argue that builders just need to pay more.

(Graphic: http://link.reuters.com/pec98t)

Still, a labor shortage and pricey materials may hold back new home construction and help push prices higher as demand outstrips supply, realtors and economists say.

Government data on Tuesday showed housing starts rose less than expected in May, an indication that supply constraints might be starting to impact on home building. Builders say costs have risen between 10 percent and 15 percent over the last year.

Although the nation’s unemployment rate stands at a lofty 7.6 percent, and is much higher in construction, builders say that is not translating into the availability of framers – the carpenters with mid-level skills who create the skeletal wooden framework of new houses and who serve as the backbone of home construction.

And it is not only framers who are in short supply, according to builders. The dearth extends to roofers, masons, sheet rockers, electricians and air conditioning technicians, and it is affecting apartment building contractors as well as homebuilders.

‘Although we are very busy and have work lined up for the next 12 to 18 months, we could be busier if I was confident that I could obtain the proper help,’ said Anthony Zarrilli, principal at Zarrilli Homes in Brick, New Jersey.

When the housing market collapsed in 2006, contractors downsized and the industry continued to shrink well after the 2007-09 recession ended. Between April 2006 and January 2011, the home-building sector shed 466,700 jobs, about half of its total.

NOT GOING BACK

Now, builders are trying to meet the recovering demand, but many of the workers they let go are no longer available.

Given the industry’s volatility, many, like Omar Lisak, will probably never come back.

The 46-year-old from Lincoln, Nebraska, left in May 2008 after an 18-year career as a framer. He is now a truck driver.

‘I need something less risky. People are offering me jobs, they want me to go back, but I won’t,’ said Lisak. ‘I have no need to. I am working with no stress, less headaches and I sleep well at night and don’t have to worry about paying my bills.’

Similar sentiments are shared by Fernando Pages and Pat Quinn, who also quit after decades of building homes.

Pages, 57, has moved into telecommunications and also teaches home-building classes and writes a blog.

‘It was a terrible experience to want to go through again. Right now I am driving to Kansas, where I will teach an eight-hour class tomorrow on foundations,’ said Pages.

After frequent bouts of unemployment, the 57-year-old Quinn called it quits in 2012 and became a home inspector in St. Augustine, Florida, ending a 30-year career building homes.

‘I was always getting laid off every year,’ said Quinn. ‘I would never consider going back even if things get much better in the housing market.’

A tightening of immigration rules in states like Arizona is also cited as a factor behind the labor shortage. With police in the state required to check the immigration status of people they stop and suspect of being in the country illegally, many undocumented immigrants left the state, drying up a source of labor for the building industry there.

According to the NAHB about 22 percent of the workforce in the single-family home building industry are immigrants, though it does not say how many of those are undocumented.

Another factor, according to unions and former framers like Lisak, is the reluctance by builders to pay contractors more.

‘Our contractors are underbid,’ said Bill Luddy, head of special projects at the United Brotherhood of Carpenters. ‘Our people provide a wage that people can live on, compared to contractors who are paying piece rates, who are paying low or cash wages.’

Builders would not be drawn into discussing financial issues. However, Lisak, said they generally paid framers between $4-$5 per square foot, depending on the region and the size of the house. That translated to wages of less than $1,000 per week, he said.

They would need to pay at least $6 per square foot to attract people like him, Lisak added.

LABOR GETTING SCARCE

‘Labor is getting very scarce. We have actually turned a few jobs away because labor is unavailable,’ said Johnny Yates, vice president at Rampart Construction in Dallas.

Yates said an apartment building job that would normally run between 18 to 24 months was now taking at least an additional two months to complete.

In Oklahoma, urban developer Grant Humphreys is also having labor headaches for his new community project, Carlton Landing.

‘I have 27 homes that have not yet started construction,’ said Humphreys. ‘Our people are working six days a week. We can’t ask more from them. We just need more workers.’

Humphreys said his firm would not break ground until year end on projects for which the contracts were signed in May.

Seven years ago, as the housing boom reached its apex, residential construction payrolls peaked at 1.02 million workers. While they bottomed out in January 2011, they are still down about 42 percent.

At 10.8 percent, unemployment among construction workers is higher than for any other group. But this rate includes workers in non-residential construction, which has lagged home building and where workers are more likely to be unionized.

Some economists like Heidi Shierholz of the left-leaning Economic Policy Institute doubt talk of a labor shortage given the slack in the overall industry. ‘Unemployed construction workers outnumber job openings in construction by nearly 12-to-1,’ said Shierholz.

Part of the seeming discrepancy could reflect the uneven nature of the housing recovery, other economists say. Housing has not rebounded as quickly in areas like Michigan and the rest of the Rust Belt as in places like Arizona, California and much of the Northeast.

Labor Department data on wages seems to indicate some tightening in labor availability.

Average weekly earnings in the home-building sector, unadjusted for seasonal fluctuations, jumped by $12.56 to $872.14 in April, the highest level since the series started in 2006. In the 12 months through April, they were up 6.1 percent.

‘You still have quite a bit of displaced workers that are unemployed in construction because their area hasn’t turned around just yet and they are not willing to move to where the jobs are,’ said Jonathan Smoke, chief economist at Hanley Wood in Washington.

(Reporting by Lucia Mutikani; Editing by Tim Ahmann and Claudia Parsons) Keywords: USA ECONOMY/HOMEBUILDING

(Lucia.Mutikani@thomsonreuters.com)(1 202 898 8315)(Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net)

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ISTANBUL, June 19 (Reuters) – Here are news, reports and events that may affect Turkish financial markets on Wednesday.

The lira was flat at 1.8851 against the dollar by 0447 GMT from 1.8853 earlier.

The two-year benchmark bond yield rose to 6.81 percent from 6.21 percent late on Monday in thin volumes.

The Istanbul stock index fell 1.53 percent to 77,739.61 points, underperforming a 0.47 percent drop on the MSCI broad emerging market benchmark index.

GLOBAL MARKETS

Japanese stocks rose on Wednesday, thanks to a positive lead from Wall Street plus a softer yen, outperforming the rest of Asia which anxiously seeks clarity on the Federal Reserve’s next policy step.

TOFAS

Turkish car maker will hold a news conference. (1000)

ALBARAKA

Islamic bank Albaraka to hold a news conference. (1100)

Note: For a list of forthcoming events, see.

For other related news, double click on:

Turkish politics

Turkish equities

Turkish money

Turkish debt

Turkish hot stocks

Forex news

All emerging market news

All Turkish news

For real-time quotes, double click on:

Istanbul National-100 stock index, interbank lira trading, lira bond trading

(Writing by Seda Sezer) Keywords: TURKEY FACTORS/

(seda.sezer@thomsonreuters.com)(+90-212-350 7122)(Reuters Messaging: seda.sezer.thomsonreuters.com@reuters.net)

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