Australian Dollar Firm; Arrow Rises

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

Australian dollar rises as Greece agrees to

[R]7:00 PM Sydney, Australia – Australian dollar rises as Greece agrees to €24 billion austerity measures. Regulator approve Shell/PetroChina bid for Arrow. Woolworths Ltd cuts sales forecast and reported lower than expected third quarter sales growth. Santos chief says ETS delay will affect investment.[/R]

Australia’s dollar rose as signs Greece will agree to budget cuts to win a potential $159 billion bailout revived investor appetite for higher-yielding assets.

Talks between Greece, the European Commission and the IMF are expected to be finalized soon, EU Economic and Monetary Affairs Commissioner Olli Rehn said yesterday.

Australia’s importers and exporters forecast the Australian dollar will extend this year’s gains into December while stopping short of a record high, according to Commonwealth Bank of Australia, the nation’s largest lender.

The dollar climbed 27% against the U.S. dollar over the past 12 months, the best performance among the 16 most-traded currencies.

Royal Dutch Shell Plc and PetroChina Co. received approval from Australia’s Foreign Investment Review Board to acquire gas producer Arrow Energy Ltd. in a A$3.5 billion transaction.

The decision follows clearance from the Australian Competition and Consumer Commission and allows the companies to seek regulatory approval in China, Arrow Energy Ltd said in a statement today to the Australian stock exchange.

Woolworths Ltd Australia’s biggest retailer cut its annual sales forecast on lower food inflation and the absence of government cash handouts that stoked demand a year earlier.

Revenue is expected to rise 3% to 6% in the year ending June, Woolworths said in a statement today. The company had forecast on Feb 26 ‘upper single digits sales growth’ while announcing first-half earnings.

The Australian benchmark stock index rose after the country’s largest investment bank Macquarie Group reported profit soared 21% in the year ended March.

Commodity stocks increased as gold prices gained 0.4% to $1,173 per ounce and crude oil prices edged up 0.5% to $85.6 per barrel.

The Australian dollar increased 0.3% to 93.04 U.S. cents.

Macquarie Group Annual Profit Rise 21% to A$1.05 billion

Macquarie Group reported today that its net profit for the year ended March gained 21% to A$1.05 billion from a year ago.

Operating income advanced 20% to A$6.6 billion from the same period a year earlier.

The net impact of write-downs, impairments, equity-accounted gains and one-time items was A$388 million.

In particular, write downs, provisions and net equity-accounted losses totaled A$96 million in the second half from A$758 million in the first half.

According to Macquarie Group managing director and CEO, David Moore, the international income accounted for 52% of the total income.

Assets under management soared to A$326 billion after the acquisition of Delaware Investment in January 2010.

Also retail deposits increased to A$15.5 billion at March 2010 from A$13.9 billion at September 2009.

Overall, income generated from the Americas was 21%, Australia 48%, Asia 18%, while EMEA contributed 13%.

ASX 200 index in Australia increased 11.80 or 0.25% to 4,797.40 and of the stocks in S&P ASX 200 index, 106 increased, 81 declined and 13 were unchanged.

ASX Movers

Biota Holdings Limited led decliners in the S&P ASX 200 index with a loss of 9.1% followed by Mirabela Nickel Ltd 8.1%, OZ Minerals Limited 4.6%, Murchison Metals Limited 4.5% and PanAust Limited 3.7%.

ResMed Inc led gainers in the S&P ASX 200 index with a rise of 5.8% followed by Macquarie Group Limited 4.2%, Mermaid Marine Australia Limited 3.6% and Goodman Group of 3.6%.

Other Movers

Arrow Energy Limited added 0.5% to A$5.18 after the regulator gave foreign-investment approval for Royal Dutch Shell and PetroChina to acquire the firm for A$3.45 billion.

BHP Billiton plc the mining company rose 0.4% to A$40.69.

Macquarie Group Limited advanced 4.2% to A$50.41 after the investment bank estimated higher annual income on higher trading revenues.

Santos Ltd advanced 2.1% to A$13.82. CEO David Knox said the shelving of emissions trading scheme has delayed company investment plans.

Westpac Banking Corporation rose 0.4% to A$27.11.

Woolworths Limited rose 0.4% to A$27.03 after the retailer cut its full-year sales forecast and reported lower than expcted third-quarter food and liquor sales growth.