Sydney, Dec 18, 2008 AEST (ABN Newswire) - US stocks closed lower overnight after investors refocused on economic problems a day after the rally pushed by Federal Reserve's surprising interest rate cut.
Yesterday the Australian stock market closed marginally higher despite a big lead from United States markets. The banking sector was pulled down by Commonwealth Bank as it tried to sell shares to institutional investors for A$2 billion capital raising. The benchmark S&P/ASX200 index had gained 14.4 points, or 0.4 per cent, to 3570.6 points, while the broader All Ordinaries index was up 16.1 points, or 0.46 per cent, at 3515.0 points. Commonwealth Bank's termination of the share placement and rising bad debts has hit the confidence of the banking sector.
At 0825 AEDT on the Sydney Futures Exchange, the December Share Price Index futures contract was down 45 points at 3,533. The December contract expires at noon. It will be replaced by the March contract.
The dollar has opened higher as continued US dollar weakness helped push the local currency above $US0.7000. At 7am AEDT, the dollar was trading at $US0.7006/11, up from yesterday's close of $US0.6980/85.
Oil prices have fallen, reversing earlier gains, despite news that the OPEC crude cartel had agreed to a record output reduction of two million barrels a day at a meeting in Oran, Algeria. Light sweet crude for delivery in January fell 74 cents to 42.86 dollars a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
Treasurer Wayne Swan said he was prepared to go beyond the Rudd Government's A$22 billion of economic stimulus measures after the US central bank slashed interest rates to near zero. He also begged employers, particularly mining companies, to delay job cuts as long as possible to give the nation's economy time to shrug off the effects of the global economic crisis.
Australia's international merchandise imports fell to A$20.92 billion ($14.52 billion) in November, unadjusted, from a revised A$21.81 billion in October, the Australian Bureau of Statistics said Wednesday. The merchandise imports on a balance of payments basis increased by 2% in seasonally adjusted terms between October and November.
The Westpac-Melbourne Institute leading index, which predicts where the economy is headed in the next three to nine months, grew by 0.6 per cent in October, down from 1.1 per cent the previous month. It indicated the likely pace of growth in the Australian economy would be weak in coming months but suggests the country will avoid a recession.
Today Reserve Bank of Australia will release its monthly bulletin and the Australian Chamber of Commerce and Industry and Westpac release their survey of industrial trends in the December quarter.
M&A News
White Energy Company Limited(ASX:WEC) said it has signed a binding letter of intent with Asia Special Situation Acquisition Corp. (ASSAC)(AMEX:CIO) whereby White Energy has agreed to merge its South East Asian business in to ASSAC. White Energy will own 56% in the merged entity which is valued at A$385 million.
Rio Tinto(ASX:RIO) is giving up its 49% equity stake in its aluminum joint venture project with Saudi Arabian Mining Co., or Maaden, amid the global economic crisis. In a statement, Maaden said Rio Tinto Alcan won't help fund its estimated $US10.5 billion aluminium project.
New Zealand Oil & Gas(NZE:NZO) has lifted its stake in Australian oil company Pan Pacific Petroleum(ASX:PPP) to 9 per cent. NZOG announced on Wednesday that it was seeking to acquire a strategic stake in Pan Pacific so as to increase its exposure to the attractive producing Tui area oilfields in offshore Taranaki.
Manhattan Software Bidco Ltd has gained over 50% stakes of business software group MYOB Ltd(ASX:MYO) after receiving enough acceptances for its takeover offer. Manhattan's stake is now 50.22 per cent, up from 46.5 per cent.
NAB(ASX:NAB) says it is in advanced talks to purchase the brand name and Australian distribution network of Wizard Home Loans for an undisclosed price. NAB said it also was negotiating to acquire up to A$4 billion of Wizard-originated prime mortgages, all of which are mortgage insured.
Important Corporate News
Commonwealth Bank(ASX:CBA) has terminated a share placement agreement with Merrill Lynch. CBA claims the broker failed to make all the disclosures requested by the country's biggest lender to investors.
National Australia Bank said the group and Australian region CEO roles will be integrated into a single role. Chief executive designate Cameron Clyne will fill this role and the current Australian region CEO Ahmed Fahour will move to executive director position.
Stockland Group(ASX:SGP) plans to cut its annual dividend by 27 percent, its first cut ever, driven by a 5 percent reduction in the value of its residential projects.
Westpac Banking Corp. (ASX:WBC) said cost savings from its takeover of St George Ltd(ASX:SGB). are 10% ahead of estimates. The bank expects the merger to cost A$700 million. The combined banking group is likely to lose almost A$500 million in revenue over the next three years as a result of their merger.
1. Related Stocks - Mid Market (AEST 1230)
---------------------------------------------------Code % Change Volume Turnover Low High---------------------------------------------------ASX:RIO -.47 4,048,787 $171,561,315 3942 4077ASX:CBA -9.43 19,624,501 $511,610,379 2575 2641ASX:WBC +.12 24,784,921 $379,608,270 1510 1581ASX:NAB -.15 15,483,512 $290,935,272 1870 1945ASX:SGP -2.54 14,664,095 $50,194,939 338 350ASX:PPP 7,744,120 $2,312,536 29.5 30ASX:WEC +10.89 28,984 $49,733 170 175ASX:NZO +.92 65,500 $70,525 107 109ASX:MYO -1.36 92,595 $100,474 108.5 109
2. Top 10 ASX on Turnover - Mid Market (AEST 1230)
---------------------------------------------------Code % Change Volume Turnover Low High---------------------------------------------------ASX:BHP +.51 36,192,745 $1,130,354,652 3053 3170ASX:CBA -9.43 19,625,306 $511,631,631 2575 2641ASX:WBC +.19 24,785,802 $379,622,146 1510 1581ASX:TLS +1.4 102,566,272 $363,738,745 349 362ASX:ANZ +2.62 21,098,540 $296,483,009 1381 1414ASX:NAB +.05 15,487,395 $291,010,296 1870 1945ASX:WOW -2.4 10,418,549 $260,915,688 2482 2570ASX:WDC -2.37 17,620,574 $218,825,132 1235 1293ASX:QBE +.31 8,692,048 $215,534,440 2472 2548ASX:RIO -.47 4,048,787 $171,561,315 3942 4077
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
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