Australasian Investment Review (AIR) is a free daily news service with a weekly online magazine covering global financial markets with a focus on Australia, New Zealand and Asia.
The market is up 71 following a solid session on Wall Street. Energy sector doing well today - up 5.2% on the higher oil price. Resources up 4.6%. BHP opened up 9% but has drifted back – up 5.9%. RIO up 1.6%. More talk about RIO having to cut capital and operational expenditure and as well as aluminium production going forward due to its hefty debt position. Financials underperforming relatively – up 1.5% with CBA up 1.8%. WBC up 1.4%. QBE Insurance down 4.8% after their oversubscribed $2bn institutional placement last night - 97.6m shares at $20.50 each.
World stockmarkets are now pricing in a very severe recession for 2009.
Rio Tinto may have the rating on $US5 billion of its debt cut by Moody's Investors Service after BHP pulled its $102 billion bid and exposed Rio to the realities of slumping prices and demand for metals, coal and ores.
Forget those forecasting that Australia will escape the ravages of recession in 2009.
QBE obviously has no plans at the moment to return to Insurance Australia Group after revealing plans to raise $2 billion through a share placement to pay for a number of acquisitions and to improve the quality of the company's capital.
In another sign that the slump in China is hurting Australian companies, especially in resources, iron ore miner Fortescue Metals has suspended the construction of its Cloudbreak to Christmas Creek rail line in the Pilbara region of Western Australia, according to contractor, NRW.
The market is down 26 after being down 53 at its low – underperforming the 81 point rise predicted by the SFE Futures this morning. Resources outperforming – up 0.5%. Financials down 1.2%. Banks all down – CBA down 3.6%.
Some were surprised, but they shouldn't have by the decision by BHP Billiton to pull the Rio Tinto bid.
We said Monday that this week would be important for retailers: yesterday we got the first installment with the news that Harvey Norman, the country's biggest electrical and consumer products retailer has suffered a sharper than expected fall in profits as sales continue to slump as the crunch bites deeper into Australian consumers.
Less than a week ago OZ Minerals was talking about doing a major impairment test of all its assets and deciding early in the New Year about deferring, cutting back or just abandoning projects and prospects.
