Australian Stocks Rebound; ANZ Net Soars

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
29 Apr, 2010
New York City

Stocks in Australia rebounded after world markets and commodities prices gained. Home price increase growth in March quarter declined to 3.1% from 5.3% in the previous quarter as the recent rate hike takes hold. First half profit at ANZ increased 36%.

[R]6:00 PM Sydney, Australia – Stocks in Australia rebounded after world markets and commodities prices gained. Home price increase growth in March quarter declined to 3.1% from 5.3% in the previous quarter as the recent rate hike takes hold. First half profit at ANZ increased 36%.[/R]

The benchmark index in Australia rebounded, tracking world markets and a rise in commodities prices. German Chancellor Angela Merkel said in Berlin that the Germany will speed up its contribution for the Greek bailout package.

International Monetary Fund agreed to provide as much as 120 billion euros over three years to Greece. The sharp increase in the assistance is expected to provide assurance to bond investors that Greece will not default on its obligations.

ASX 200 index in Australia decreased or 38.60 or 0.80% to 4,784.20 and of the stocks in S&P ASX 200 index, 77 increased, 108 declined and 15 were unchanged.

Australian home price growth slowed to 3.1% in the quarter to March from 5.3% in the previous quarter as the Reserve Bank of Australia’s five rate increases took effect said Australian Property Monitors.

The widening disparity between the number of homes supplied and needed is a major contributor to the climb in prices, a government report said on April 27.

The fiscal first half profit at ANZ Bank increased 36% as an improving domestic economy helped bad loans fall and lending income grow said the bank spokesman.

Chief executive Michael Smith also confirmed that the bank is reviewing to purchase 51% stake in Korea Exchange Bank.

Biota Holdings Ltd shares plunged 16% after the royalties from GlaxoSmithKline Plc’s Swine Flu drug Relenza fell 70%. Royalties from the sale of this drug accounted for more than half the revenue last year.

Woodside Petroleum Limited, Australia’s second largest oil and gas producer said it plans to use a floating plant to process the fuel from the Sunrise LNG project in East Timor Sea.

The Sunrise floating LNG plant is expected to produce 4 million metric tons of fuel per year, Shell Australia said in a statement today. The proposal needs approval as the East Timor government had previously opposed any plan that does not include a processing plant on its soil.

Australia Home Prices Rise 3.1% in March

Australian Property Monitors reported today that the country’s home prices growth slowed to 3.1% in the three months ended March compared with 5.3% in the same period a year earlier on interest rate hikes by the Reserve Bank of Australia.

Home prices also eased 0.2% from 2.6% a year ago.

The report notes that median house prices across Australia advanced 16.2% in March from the comparable year ago period, while unit prices jumped 10.4% in the review period.

House prices in Sydney increased 2.1% in the March quarter from a quarter earlier and prices climbed 6.8% in Melbourne.

Price growth in more expensive suburbs across Australia has been double that of more affordable areas.

APM Economist Matthew Bell said, “Home price growth in the March quarter slowed across the country as five interest rate rises and the expiry of the First Home Owner Boost began to impact prices. Even though quarterly growth rates are moderating, annual growth rates are still rising. This is due to a relatively strong March 2010 quarter replacing a weak March 2009 quarter in the annual figures.”

ANZ Profit Soars 36% in H1

Australia’s third largest bank reported today that profit in the six months ended March rose 36% to A$1.93 billion from A$1.42 billion in the same period a year ago.

Net interest income increased 8% to A$5.19 billion and net interest margin rose to 2.48% from 2.22% in the first half of 2009.

Provisions for bad debts decreased 23% to A$1.08 billion after conditions in the financial markets continue to improve.

ANZ declared an interim dividend of 52 cents per share from 46 cents per share last year.

However, ANZ chief executive officer Michael Smith said the lender remains cautious about outlook.

“The scale of the global financial crisis and the depth of the economic downturn in the US and Europe means we have to be realistic about the outlook. Recovery from events of this magnitude will not happen smoothly,” said Smith.

ASX Movers

Biota Holdings Limited led decliners in the S&P ASX 200 index with a loss of 22.1% followed by Atlas Iron Limited 6.3%, Western Areas NL 4.5%, Gunns Limited 3.7% and Elders Limited 3.6%.

Hastie Group Limited led gainers in the S&P ASX 200 index with a rise of 5.7% followed by St Barbara Limited 5.6%, Intoll Group Stapled Securities 3.1% and Charter Hall Group 2.6%.

Other Movers

Australia and New Zealand Banking Group Limited declined 2.1% to A$24.32 after its chief executive officer said Europe’s debt problems may worsen.

BHP Billiton plc decreased 1.3% to A$40.51 and Indophil Resources NL added 1.3% to A$1.16.