Australian Indexes Track Lower World Markets

123jump.com Staff
19 Apr, 2010
New York City

Stocks in Australia tracked world markets losses and closed lower. Citic, China controlled investment agency and one of the largest shareholder in Macarthur Coal supported the deal between the company and Noble Group. World air travel linked to Europe remains disrupted for the fourth day.

[R]3:00 AM New York, 7:00 PM Sydney – Stocks in Australia tracked world markets losses and closed lower. Citic, China controlled investment agency and one of the largest shareholder in Macarthur Coal supported the deal between the company and Noble Group. World air travel remains disrupted for the fourth day as airports from Dublin to Moscow remain closed.[/R]

Market indexes in Australia declined tracking losses in Asia. Worldwide air travel continues to be disrupted for the fourth day in a row and more than 60,000 flights are canceled in Europe.

Airports are closed in Ireland, Denmark, Norway, Sweden, Finland, Belgium and Germany after cautious regulators monitor volcanic ash cloud in the northern Europe.

U.S. securities regulators surprised markets after they alleged Goldman Sachs engaged in a mortgage securities fraud that defrauded investors with $1 billion and failed to inform clients that the broker was looking to profit the failure of these bonds.

Commodity stocks also plummeted as gold prices fell 0.3% to $1,134 per ounce and crude oil prices slipped 1.8% to $81.7 per barrel.

Panoramic Resources decreased 4.1% to A$2.58 and Energy World Corp. tumbled 3.7% to A$0.52.

In Sydney trading ASX 200 Index fell 1.4% or 69.6 to 4,915.10, dropping below the psychological 5000 mark.

Of the ASX 200 index stocks, 23 rose, 172 declined, and 5 were unchanged. Riversdale Mining led gainers in the index shares with a rise of 1.6% followed by Ausenco Ltd climbing 1.6%.

The Australian dollar decreased 0.7% to 91.71 U.S. cents.

Citic Supports Noble, Macarthur Deal

Citic Group said today in a statement it is supportive of a deal that will result in Noble Group becoming the largest shareholder in Macarthur Coal.

The other two biggest shareholders in Macarthur Coal, ArcelorMittal and Posco, last week noted that the revised A$4.1 billion bid by U.S. firm Peabody Energy is worth considering.

However, Citic Resources, which holds the majority 22.4% of Macarthur Coal, says it doesn’t have enough information about the revised bid by Peabody and therefore couldn’t assess the benefits of the transaction.

Macarthur Coal has since postponed indefinitely its shareholder meeting to vote for the proposed takeover of Gloucester Coal.

“Based on the current limited information available to Citic about Peabody''s further proposal, Citic is not in a position to make an informed assessment enabling it to make a decision on whether or not it could support Peabody''s further proposal,” Citic quoted Macarthur as saying.

White Energy to Acquire South Australian Coal

White Energy said today it will intends to acquire South Australian Coal through an offer for an upfront consideration of A$39.3 million, which will result in South Australian Coal shareholders receiving up to 15.7 million White Energy shares priced at A$2.50 share price.

The company also noted that shareholders can receive another 17 million White Energy shares in the event of future discoveries of coal deposits.

Through the transaction, former Felix Resources chief executive Brian Flannery will become White Energy''s Chief Executive Officer from August, while former Felix chairman Travers Duncan will join as chairman of White Energy.

Investment vehicles associated with Flannery and Duncan and former Felix director John Kinghorn will invest in White Energy through a A$75 million placement at A$2.50 per share.

In addition, former Felix director, Hans Mende announced his intention to invest A$19.3 million in White Energy.

ASX Movers

Boart Longyear Limited led decliners in the S&P ASX 200 index with a loss of 5.6% followed by losses in Virgin Blue Holdings Limited of 5.3%, in Murchison Metals Limited of 4.6%, in Roc Oil Company Limited 4.5% and in Mincor Resources NL 4.5%.

Riversdale Mining Limited led gainers in the S&P ASX 200 index with a rise of 1.8% followed by gains in News Corporation 1.6%, in Kingsgate Consolidated Limited of 1.4% and in GUD Holdings Limited of 1.1%.

Other Movers

BHP Billiton plc decreased 1.4% to A$42.89 and Lihir Gold Limited fell 0.5% to A$3.96.

Newcrest Mining Limited dropped 1.7% to A$34.02 after the gold producer is holding preliminary talks with advisers to takeover Australia''s Lihir Gold, The Australian Financial Review said on Monday.

Qantas Airways Limited fell 2.3% to A$2.91 and the airline continued to cancel all its flights to and from Europe Monday after a cloud of ash from an Iceland volcanic eruption forced the continued closure of European airspace.

Rio Tinto Limited declined 1.8% to A$78.19.

Sigma Pharmaceuticals Limited dropped 3.0% to A$0.48 after the Australian taxation office has launched an investigation into Sigma Rewards scheme. Pharmacists collected more than 1.3 billion points under the business-to-business loyalty scheme in fiscal 2008 which they exchanged for overseas holidays and electronic goods, according to The Australian Financial Review reported.

Sundance Resources Limited closed unchanged at A$0.15 after the company reported “excellent” initial drilling results at the Nabeba deposit, part of its Mbalam iron-ore project in West Africa.

Woodside Petroleum Ltd the oil and gas producer slipped 1.5% to A$46.01.