Australian Mortgage Loans Drop 3.4% in Feb

Darlington Musarurwa
12 Apr, 2010
New York City

Home loan approvals in Australia fell 3.4% in February. South Korean steelmaker Posco is likely to support the deal between Macarthur Coal and Gloucester Coal deal.

[R]3:00 AM New York, 7:00 PM Sydney - Home loan approvals in Australia fell 3.4% in February. South Korean steelmaker Posco is likely to support the deal between Macarthur Coal and Gloucester Coal deal.[/R]

Australian stocks rose 0.7% led by Sigma Pharmaceuticals on market rumors it was subject to a takeover bid which the company denied.

Commodity stocks also increased as gold prices edged up 0.4% to $1,166 per ounce and crude oil prices gained 0.7% to $85.5 per barrel.

Market gains were limited as home loan demand declined for the fifth straight month.

In Sydney trading ASX 200 Index increased 0.7% or 36.2 to 4,984.30.

Of the ASX 200 index stocks, 132 rose, 46 fell, and 22 were unchanged. Sigma Pharmaceuticals led gainers in the index shares with a surge of 10.6% on speculation the company is subject to a takeover bid.

Australian Housing Loan Approvals Fall 3.4% in Feb

Australian Bureau of Statistics reported today that the total value of dwelling finance commitments excluding alterations and additions decreased 3.4% to A$20.5 billion in February from a month earlier.

The value of dwelling commitments to owner occupied housing decreased 4.4% to A$14.1 billion and investment housing-fixed loans plunged 1.1% to A$6.4 billion.

The ABS also noted that the number of dwelling commitments for owner occupied housing tumbled 1.8% to 50,287 units.

Construction of dwellings dropped 3% to 6,446 units, while the purchase of new dwelling rose 0.7% to 2,174 units and purchase of established dwellings decreased 1.8% to 41,667 units.

Posco Considers Macarthur Coal-Gloucester Deal

Posco, which is one of the three biggest shareholders together with ArcelorMittal and Citic Resources in Macarthur Coal, said today in a statement it is still considering support for the proposed merger between Macarthur Coal and Gloucester Coal.

Noble Group had earlier noted that the three supported the transaction.

Macarthur Coal has since suspended a planned shareholder vote with Gloucester and Noble after revelations that Xstrata has approached one of its shareholders.

Macarthur has rejected takeover offers from Peabody Energy and New Hope.

Australian Interest Rates Not Far Below Normal

Reserve Bank of Australia Assistant Governor Guy Debelle said today during a senate committee inquiry benchmark interest rates are not far below their average level, stoking expectations that the central bank will hike the key rate at its May 4 meeting.

“The situation where we needed historically low interest rates has passed. So, we’re moving back to something around average levels, which is not far from where we are now,” said Debelle.

ASX Movers

Nufarm Limited led decliners in the S&P ASX 200 index with a loss of 5.2% followed by losses in Primary Health Care Limited of 4.3%, in Newcrest Mining Limited of 2.1%, in Whitehaven Coal Limited 1.9% and in Harvey Norman Holdings Limited 1.8%.

Sigma Pharmaceuticals Limited led gainers in the S&P ASX 200 index with a rise of 10.6% followed by gains in Atlas Iron Limited 7.5%, in Macarthur Coal Limited of 6.1% and in Murchison Metals Limited of 5.8%.

Other Movers

Billabong International Limited the wholesaling and retailing of surf, skate and snow apparel and accessories advanced 3.5% to A$11.64.

BHP Billiton plc the mining company added 1% to A$44.38.

CBH Resources Limited gained 5.5% to A$0.19 after the zinc producer has proposed an improved offer for Australian zinc miner competing with the offer from Japan’s Toho Zinc.

Macarthur Coal Limited advanced 6.1% to A$16.51.

Rio Tinto Limited climbed 1.4% to A$80.62 after the mining company, Rio Tinto Diamonds started holding tenders last month that may lift wholesale prices of rough diamond prices.