Australia Rate Hikes Pay Pause

Darlington Musarurwa
23 Apr, 2010
New York City

The Reserve Bank of Australia Governor Glenn Stevens comments suggested that the recent hikes in interest may be passed. Woodside Petroleum first quarter revenues surges 43%. Lihir Gold said its gold production declined 26%.

[R]3:00 AM New York, 7:00 PM Sydney – The Reserve Bank of Australia Governor Glenn Stevens comments suggested that the recent hikes in interest may be passed. Woodside Petroleum first quarter revenues surges 43%. Lihir Gold said its gold production declined 26%.[/R]

The Australian dollar weakened against the US dollar and the Japanese Yen after the RBA governor Glen Stevens indicated that rate increase may pause.

The benchmark stock index fell 0.5% as Australian investors locked in gains. Commodity stocks dropped on renewed concern about the uncertainty related to Greece and other smaller European nations.

Eurostat, the European statistics agency estimated Greek budget deficit in 2009 at 13.6% compared to 12.9% estimated by the government. Eurostat estimated sovereign debt ratio at 115.1% of the GDP compared to 113.4% estimated by the government.

In Sydney trading ASX 200 Index fell 0.5% or 25.9 to 4,881.50.

Of the ASX 200 index stocks, 80 rose, 102 fell, and 18 were unchanged. CSR Ltd led gainers after the Full Federal Court in Sydney overturned an earlier judgment that blocked the company’s decision to spin off its sugar division.

The decision raised expectations that the $1.75 billion bid by China Bright Food may succeed.

The Australian dollar decreased 0.9% to 91.93 U.S. cents.

RBA Intimates Rate Hike Pause

Reserve Bank of Australia Governor Glenn Stevens indicated in comments made today at a business forum in Toowoomba that the central bank may pause increasing its key rate at its monetary policy meeting next month.

Stevens said the interest rates for both borrowers and depositors are now close to average.

“The Reserve Bank has moved early to raise the cash rate to levels that deliver interest rates for borrowers and depositors more like those that have been the average experience over the past 10 to 12 years. Those interest rates are now pretty close to that average,” said Stevens.

The RBA estimated that economic growth this year will be marginally higher than in the year ago.

Woodside Petroleum Q1 Revenues Rise 43%

Woodside Petroleum reported today that first quarter revenues ended March rose 43% to $1.03 billion from $718 million a year ago.

However, sales fell 9% to 18.7 MMboe from 20.6 MMboe as production dropped to 19.2 MMboe from 20.6 MMboe.

The reduction in revenue is attributed to the decline in sales volumes caused by a 46 day planned maintenance outage at Stybarrow, the sale of Otway assets prior to the end of the reporting period, and natural decline in oil production from the Stybarrow, Enfield, and Neptune refineries.

Lihir Gold Q1 Production Falls 26%

Lihir Gold announced today that gold production in the first quarter ended March dropped 26% to 229,757 ounces from 312,311 in the comparable period a year earlier.

The company, however, expects its full year production to rise to between 1 million to 1.1 million ounces from an earlier projection of 960,000 to 1.06 million ounces, as production at its largest Lihir Island mine in Papua New Guinea is expected to rise between 800,000 to 870,000 ounces.

Production at the Lihir island mine had earlier been estimated to be between 770,000 to 840,000 ounces.

The company had recently rejected an A$9 billion plus takeover offer from Newcrest Mining.

ASX Movers

CSL Limited led decliners in the S&P ASX 200 index with a loss of 6.8% followed by Roc Oil Company Limited 4.3%, Nufarm Limited 3.7%, Karoon Gas Australia Ltd 3.0% and Sundance Resources Limited 3.0%.

CSR Limited led gainers in the S&P ASX 200 index with a rise of 6.2% followed by Kagara Ltd 4.2%, Goodman Group of 4.2% and Prime Infrastructure Group 3.2%.

Other Movers

CSL Limited, the biopharmaceutical and allied products distributor, declined 6.6% to A$34.15.

CSR Limited gained 6.2% to A$1.79 after the building products maker announced that the Full Federal Court in Sydney overturned an earlier judgment that blocked the company’s decision to spin off its sugar division, Sucrogen.

Lihir Gold Limited the gold mining producer rose 0.7% to A$3.95.

Oil Search Limited fell 1.2% to A$5.76 after the company said it seeks reserves to double its Papua New Guinea resources.

Woodside Petroleum Ltd decreased 1.2% to A$46.28.