Sydney, Aug 29, 2008 AEST (ABN Newswire) - The share market closed firmly in the black yesterday, driven by gains in resources and finance stocks following a positive lead from Wall Street. And US stocks gained for a third day overnight led by manufacturers and financial companies.
In Australia the benchmark S&P/ASX200 yesterday closed up 55.3 points, or 1.1%, at 5,066.5, while the broader All Ordinaries gained 55.5 points, or 1.09%, to 5,143.3.
The Australian dollar opened weaker today with stronger than expected US economic growth data. The US dollar strengthened overnight after US Commerce Department data showed US gross domestic product grew by 3.3% in the year to June, largely based on a jump in exports. At 0700 AEST, the Australian dollar was trading at 86.23/29 US, down from yesterday's close of 86.74/78 cents.
Crude oil for October delivery fell $US2.56, or 2.2%, to settle at $US115.59 a barrel on the New York Mercantile Exchange. Oil has dropped 22% from a record $US147.27 reached on July 11.
At 0734 AEST on the Sydney Futures Exchange, the September share price index futures contract was up 83 points at 5,144.
Key Economic Facts and Figures
New figures from the Australian Bureau of Statistics released yesterday showed business investment was surprisingly strong in the second quarter, with capital spending up 5.7 per cent, well above the 2 per cent expected by economists.
HIA said there are now nearly 900,000 households paying more than 30% of income on repayments. A 0.5% reduction in home loan interest rates would reduce the average mortgage repayment by $64 per month and cut into mortgage stress by around 65,000 households.
Today, the Reserve Bank of Australia financial aggregates data for July and the Housing Industry Association of Australia new home sales data for July will be released.
M&A News
Investment bank Babcock & Brown Ltd (ASX:BNB) will sell back its management rights over one of its listed satellites. After announcing a 30 per cent decline in interim profit last week, B&B said it would restructure its debt-laden business. This includes winding back the corporate finance arm that holds the management rights over some satellites. B&B announced today it will sell back its management rights for A$17.5 million to make it easier for the satellite fund to field takeover offers.
Portuguese energy company Martifer SGPS SA (ELI:MAR) confirmed Thursday it is in talks with Australia's Macquarie Group (ASX:MQG) about investments in wind energy in Australia. So far no deal has been reached and no investment sum has been determined. Martifer is considering buying a 25% stake in a EUR1.7 billion wind power project in Australia from Macquarie.
Important Corporate News
Scrap metal recycler Sims Group (ASX:SGM) has posted an 81% rise in annual profit and has forecast another strong result for the first quarter of the new year. Sims today posted net profit for the 2008 financial year of A$433.162 million. Sims also announced a new brand identity for the group -- Sims Metal Management -- following its merger with the US group Metal Management.
Speculation continues to grow that Australia's largest childcare provider ABC Learning (ASX: ABS) is poised to collapse. There is very little chance that nearly 1200 centres will close even if creditors seize control of the embattled group. It is believed that the centres will later be sold off in small groups to private investors rather than unloaded as a single entity.
Allco Finance Group (ASX:AFG) has reported a massive loss for the 2008/09 year and says it will restructure to focus on its core capabilities by selling non-core assets and exiting some businesses. Allco Finance reported a net loss of A$1.731 billion for the year ended June 30, down 918 per cent on the previous year's net profit of A$211.67 million.
Property investor Centro Properties Group (ASX:CNP) says it is making incremental steps to stabilise the group after booking an annual net loss of A$2.06 billion for 2007/08. Centro said reported net profit for the the year ended June 30, 2008, fell primarily due to non-cash items including a reduction in US and Australian retail property values and impairment of Centro's investment in joint-ventures.
Contact
Michelle Liang
China Bureau
Asia Business News
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
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