Sydney, Dec 17, 2008 AEST (ABN Newswire) - Overnight US stocks jumped 5% after the Federal Reserve surprised investors and cut interest rates to a record low target range of 0% to 0.25%.
Yesterday Australian shares closed lower as almost all sectors were down. The benchmark S&P/ASX200 index was down 35.2 points, or 0.98 per cent, at 3556.2, while the broader All Ordinaries index was down 36.8 points, or 1.04 per cent, at 3,498.9 points. Telecom sector continued to lose on Telstra's failure to submit an adequate tender for the national broadband network.
The Australian dollar has opened higher, surging above $US0.6900 after official US interest rates were slashed to a record low on Wednesday morning. At 0700 AEDT, the Australian dollar was trading at $US0.6918/25, up 2.2 US cents, or 3.3 per cent, from Tuesday's close of $US0.6695/00.
Oil prices fell today as the Federal Reserve highlighted the troubled state of the US economy with its latest interest rate cut. Light, sweet crude for January delivery settled US91 cents, or 2 per cent, lower at $US43.60 a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
The number of dwelling commencements fell by 10.7 per cent to 35,425 units, seasonally adjusted, in the September quarter, the Australian Bureau of Statistics (ABS) said on Tuesday. It is the sharpest decline in eight years as high interest rates dampened the demand to build homes.
Yesterday RBA has released the minutes from the policy meeting confirming that the central bank will keep interest rates on hold for at least the next two months. Earlier this month the central bank cut interest rates by a full 1 percentage point to 4.25 per cent. But economists say the deteriorating global economy, especially in the major export market of China, combined with a weak Australian household sector will force the RBA into even more aggressive rate cuts.
Today the Australian Bureau of Statistics releases international merchandise imports data for November and Westpac and the Melbourne Institute release their leading index of economic activity for October. The Department of Education, Employment and Workplace Relations releases its skilled vacancies survey for December, and the Housing Industry Association issues new home sales data for November.
M&A News
AJ Lucas Group (ASX:AJL) has entered into an unconditional, definitive agreement with AGL Energy (ASX:AGK) for the sale of its 70 per cent interest in PEL 285, the Gloucester Basin gas project in New South Wales. Under the terms of the sale agreement AJL will receive approximately A$259 million in cash.
James Packer's Consolidated Media Holdings(ASX:CMJ) has confirmed that its stake in PBL Media, which holds the Nine Network and various magazine interests, will fall from 25 per cent to virtually nil by the end of the month.
Important Corporate News
Commonwealth Bank(ASX:CBA) has completed an A$2 billion capital raising after its rivals Westpac(ASX:WBC) and National Australia Bank(ASX:NAB) made share placement. CBA said it raised the funds through the placement or its ordinary shares to institutional investors at A$27 each, a 7.4 per cent discount to Tuesday's closing price of A$29.15.
Gaming group Crown Ltd(ASX:CWN) has raised A$300 million in equity after placing shares with investors, including Consolidated Press Holdings Ltd. Some 60.6 million of shares were placed A$4.95 each, a nine per cent discount to Crown's closing share price on Tuesday of A$5.44.
Centro Properties Group(ASX:CNP) has been granted a stay of execution, securing a one-month interim extension for all of its debt facilities, totaling A$6.01 billion.
Developer Stockland(ASX:SGP) has downgraded its earnings per share guidance for fiscal 2009 by 25 per cent, from 46.7 cents to 35 cents, following write downs in its residential and UK inventories.
1. Related Stocks - Mid Market (AEST 1230)
---------------------------------------------------Code % Change Volume Turnover Low High---------------------------------------------------ASX:WBC -2.54 12,196,943 $198,398,824 1591 1669ASX:NAB +.41 5,969,454 $116,522,925 1891 1970 ASX:SGP -5.97 4,888,344 $16,644,310 330 353ASX:CWN -4.22 2,163,295 $11,252,485 508 528ASX:AGK +1.45 555,994 $8,538,894 1515 1550ASX:CNP +32.18 38,614,830 $5,218,630 11 16.5ASX:CMJ -2.57 2,558,437 $4,851,130 187 195.5ASX:AJL +16.88 408,268 $1,840,221 435 468
2. Top 10 ASX on Turnover - Mid Market (AEST 1230)
---------------------------------------------------Code % Change Volume Turnover Low High---------------------------------------------------ASX:BHP +.48 9,836,278 $309,985,484 3075 3195ASX:WBC -2.54 12,197,847 $198,413,351 1591 1669ASX:TLS +2.82 51,919,771 $192,093,463 355 364ASX:ANZ -3.34 10,198,926 $143,541,889 1382 1450ASX:NAB +.46 5,970,911 $116,551,030 1891 1970ASX:RIO +2.04 1,962,066 $84,794,103 3965 4077ASX:NCM +3.31 2,024,580 $60,843,878 2985 3049ASX:CSL +2.24 1,882,895 $56,237,919 2920 2993ASX:QBE +2.34 2,144,331 $54,337,563 2485 2569ASX:WOW +1.9 1,837,700 $47,823,977 2542 2599
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
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