Australia Job Growth Accelerates

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
13 May, 2010
New York City

The benchmark index in Australia gained after the release jobs report. Job growth accelerates as Australia adds 33,700 jobs in April. Optus annual profit soars 16% to A$676 million.

[R]3:00 AM New York, 7:00 PM Sydney – The benchmark index in Australia gained after the release jobs report. Job growth accelerates as Australia adds 33,700 jobs in April. Optus annual profit soars 16% to A$676 million.[/R]

Australian dollar rose against all major currencies after a government report showed job growth accelerated in April.

The number of people employed increased by 33,700 in April from March, the statistics bureau said today. The jobless rate was unchanged at 5.4% in April. Job gains were led by Queensland, the largest port for coal shipments to China. However, part-time employment decreased 3,900.

Participation rate which measures the labor force as a percentage of the population of 15 and above remained unchanged in April from the revised 65.2% in March.

Australian stocks gained 1.8% with full-time employment gaining for the eighth straight month, according to a government report.

Australia needs to curb and hold inflation and keep fiscal budget surplus in the next three years as estimated by the government, said The RBA Assistant Governor Philip Lowe today.

‘Low and stable inflation has been one of the critical elements in our good economic performance and we need to make sure this continues’, said Lowe while addressing the Colonial First State Investment Forum in Sydney today. He also noted that the country’s monetary policy is suitably positioned to deal with any eventuality on the global financial markets.

Treasurer Swan earlier this week released the government’s annual budget and forecast a A$1 billion surplus in 2012-13, from a deficit of A$40.8 billion in the year to June 30, 2011. He also promised to keep a 2% cap on spending growth until the budget surplus reaches 1% of GDP.

Gold price declined today after its two-day record run on concern investors will lock-in gains as stocks advance and European debt crisis eases. The price of gold for immediate delivery traded down 0.3% at $1,235.53 an ounce in Singapore today morning.

The metal’s 14-day relative strength index was 74.288 today, staying above the figure of 70 for the third day in a row, signaling that prices are expected to decline.

In Sydney trading ASX 200 Index gained 1.8% or 79.8 to 4,652.80.

Of the ASX 200 index stocks, 167 gained, 18 fell, and 15 were unchanged. Virgin Blue Holdings led gainers in the index shares with a rise of 7.7% followed by Cudeco Ltd. climbing 7.3%.

The Australian dollar edged up 0.9% to 94.08 U.S. cents.

Australia Adds 33,700 Jobs in April

Australia Bureau of Statistics reported that the country’s employment rose 0.3% or 33,700 to 11.03 million in April from a month earlier.

Full-time employment gained 37,500 to 7.7 million, rising for the eighth straight month, but part-time employment dropped 3,900 to 3.3 million.

Unemployment also advanced 1% or 6,500 to 628,100, while the number of people looking for full time work increased 7,700 to 451,000 and the number of persons looking for part-time work decreased 1,300 to 177,000.

According to the ABS, the unemployment rate remained at 5.4% in April and the aggregate monthly hours worked fell 8.3 million hours to 1,531.4 million hours.

Economy Has Flexibility to Respond, RBI

Reserve Bank of Australia Assistant Governor- Economics, Philip Lowe said in a speech at the Colonial First State Investment Forum today that while the global economic environment remains challenging the country is well placed to benefit from strong growth in Asia.

Lowe notes that the forecast of economic growth for 2010 remains unchanged at 3.25% and has been revised up for the following years.

“At the same time, we need to be aware that circumstances can change quickly. If they do, Australia is in the fortunate position, as are a number of countries in Asia, of having the policy flexibility to be able to respond,” said Lowe.

Optus Profit Grows 16% to A$676 million

Mobile telecommunications company Optus announced today that its net profit in the year ended March 31, 2010 rose 16% to A$676 million as operating revenue gained 8% to A$8.95 billion.

Operation EBIT edged up 4% to A$2.15 billion.

In the fourth quarter, mobile services revenue advanced 11% and EBITDA margin was 30%.

Optus also added 254,000 new mobile customers in the quarter, which is the most in five years, and net additions rose to 709,000 users.

Postpaid subscribers increased 17% from a year ago and now comprise 49% of the total base.

The number of 3G subscribers increased to 3.61 million, including a base of 907,000 wireless broadband subscribers.

Overall blended ARPU improved to A$47 from A$46 a year earlier on growth of higher value customers and increased postpaid mix.

ASX 200 Index Movers

Virgin Blue Holdings led gainers in the ASX 200 index shares with a rise of 7.7% followed by Cudeco Ltd. 7.3%, FKP Property 6.7%, Eastern Star Gas 6%, and Energy World Corp. 5.9%.

Intoll Group led decliners in the ASX 200 index stocks with a fall of 3.5% followed by Sigma Pharmaceuticals 2.7%, Australand Properties 1.9%, Straits Resources Ltd. 1.6%, and Cabcharge Australia 1.5%.

Sigma Pharmaceuticals fell after the company’s chief financial officer Mark Smith resigned.

Other Movers

Infigen rose 4.7% to A$0.88 after the company announced that it will begin a share buy-back of some of its securities in the next week. The company currently has A$170 million in uncommitted cash.

National Australia Bank gained 1.9% to A$25.95 after reports said it will begin a due diligence for U.K. Lendern Royal Bank of Scotland. The bank has since put a mid-June deadline for suitors willing to snap up its 318 branches.

Commodity stocks dropped as gold prices decreased 0.5% to A$1,236 and crude oil prices slipped 0.1% to A$75.6 per barrel. Iluka Resources fell 0.9% to A$4.39 and Carnarvon Petrol declined 1.3% to A$0.37.