Australian Market Report
Sydney, Nov 26, 2008 AEST (ABN Newswire) - US stocks closed mixed overnight as a new initiative by the Federal Reserve to reopen credit markets and lower borrowing costs helped offset more glum economic news.
Yesterday, benefited from the US government's bailout plan on Citigroup, the Australian market benchmark S&P/ASX200 share index had its best day in more than 11 years, jumping 5.8%, or 198.3 points, to 3623.4, while the broader All Ordinaries index was up 5.5%, or 186.6 points, to 3575.4. Analysts say the market sentiment remains fragile as fundamental problems have not changed, although world governments are taking action to stimulate economy.
The December Share Price Index futures contract on the Sydney Futures Exchange was up 81 points, or more than 2%, at 3,700.
Oil prices slid on Tuesday as traders banked profits following sharp gains won a day earlier, analysts said. Light sweet crude for delivery in January dropped $US3.73 to settle at $US50.77 a barrel on the New York Mercantile Exchange.
The Australian dollar has opened only marginally higher after failing to hold above $US0.6600 during offshore trading. At 0700 AEDT, the Australian dollar was trading at $US0.6454/60, up from Tuesday's close of $US0.6449/53.
Key Economic Facts and Figures
The Access Economic report suggests the Federal Budget will be forced into deficit to meet the welfare costs of rising unemployment. It said the unemployment forecast of 5.4 per cent, or additional 140,000 people, will significantly increase the Government's welfare outlays.
Today the Australian Bureau of Statistics releases data on construction work done in the September quarter.
The Federal Department of Education, Employment and Workplace Relations will release its skilled vacancies survey for November.
M&A News
BHP(ASX:BHP) last night withdrew its hostile bid for Rio Tinto(ASX:RIO) on grounds that the deepening global economic crisis and slowing raw materials demand had made the deal too risky for its shareholders. Rio Tinto shares have taken a massive hit overnight following BHP Billiton's shock move to pull its takeover bid.
Babcock & Brown Power(ASX:BBP) has sold its interest in two Western Australian power stations for a total of A$130 million. The interests were sold to entities related to ERM Power, which holds stakes in both power stations. BBP said it will use the funds to repay a A$118 million debt facility.
Gunns Limited(ASX:GNS) has announced it has reached agreement to sell A$175.2 million worth of softwood to the US firm GMO Renewable Resources.
QBE Insurance (ASX:QBE) has entered into an agreement to purchase ZCS, a US-based underwriting agency for an up-front payment of $US575 million. QBE has also reached agreement to acquire two other underwriting agencies in the United States and one in Europe and a renewal rights portfolio in the US. The five acquisitions are expected to produce gross written premium of close to $US525m and profit around $US175m.
Important Corporate News
Ailing lead and zinc miner Perilya Ltd(ASX:PEM) has asked the Takeovers Panel to intervene in CBH Resources Ltd's(ASX:CBH) A$28.9 million bid and confirmed it is being eyed by rival suitors.
Oz Minerals(ASX:OZL) has outlined plans to cut A$680 million of spending next year by deferring expansion plans and slashing operating costs at its mines as it attempts to refinance $US420 million of debt by the end of the year.
Diversified industrial manufacturer Nylex(ASX:NLX) said it needed a further financial restructuring to withstand the heavy impact of the credit crisis. The company also revealed that it had closed several of its distribution warehouses and flagged staff cuts.
Premier Investments(ASX:PMV) warned that earnings in the company's retail business this financial year will be down 10 per cent and said that, so far this year, same-store sales had fallen 6per cent.
Electrical contractor Norfolk Group(ASX:NFK) has reported a 45 per cent drop in profit for the first half of fiscal 2009, and has revised its earnings guidance downwards for the full year. Norfolk reported net profit for the half year to September 30 of $4.287 million, down from $7.777 million in the prior corresponding half.
David Jones Ltd(ASX:DJS) has reaffirmed its profit for fiscal 2009 after reporting a 6.3 per cent fall in first quarter sales. Total sales for the three months ended October 25 fell to A$442.3 million, from A$471.9 million in previous corresponding period.
1. Related Stocks - Mid Market (AEST 1230)
----------------------------------------------------Code % Change Volume Turnover Low High----------------------------------------------------ASX:BHP +6.78 21,511,754 $613,035,174 2791 2856ASX:RIO -32.37 9,518,513 $405,442,143 4080 4544ASX:QBE +11.56 21,000 $577,500 ASX:GNS +9.7 1,507,495 $1,102,519 70 75ASX:PMV -4.73 109,139 $351,441 321 326ASX:BBP +10.34 7,522,843 $249,050 3 3.8ASX:NFK -20.51 373,515 $128,184 31 41ASX:PEM -1.08 1,275,900 $117,645 9 9.6ASX:NLX +4.76 36,000 $4,205 10.5 12ASX:CBH +2.85 408,879 $14,464 3.5 3.7
2. Top 10 ASX on Turnover - Mid Market (AEST 1230)
----------------------------------------------------Code % Change Volume Turnover Low High----------------------------------------------------ASX:BHP +6.78 21,536,965 $613,741,107 2791 2856ASX:RIO -32.39 9,520,023 $405,507,391 4080 4544ASX:WBC -4.2 4,824,584 $84,213,361 1697 1783ASX:TLS +1.45 19,922,564 $83,302,705 414 427ASX:CBA -4.26 2,093,301 $69,236,334 3225 3330ASX:NAB -1.4 3,409,667 $68,243,686 1933 1990ASX:ANZ -3.02 3,957,957 $56,325,212 1400 1432ASX:MQG -1.55 1,155,248 $55,866,251 2859 2970ASX:WPL -1.49 1,194,926 $41,368,878 3160 3360ASX:WOW -.08 1,611,134 $40,840,302 2465 2547
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.Liang@abnnewswire.net
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