Australian Employers Add Jobs

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
10 Jun, 2010
New York City

Stocks in Australia gained after employers in Australia added nearly net 27,000 jobs in May than in April, giving a boost to consumer incomes.

[R]6:00 PM Sydney, Australia – Employers in Australia added nearly 27,000 more new hires in May than in April. Chinese steel makers resist latest iron ore prices. The failed hedge fund Basis Yield Alpha filed a $1 billion lawsuit against Goldman Sachs.[/R]

Stocks in Australia gained after employers in Australia added nearly net 27,000 jobs in May than in April, giving a boost to consumer incomes.

ASX 200 index in Australia increased 1.14% or 50.00 to 4,435.30 and of the stocks in S&P ASX 200 index, 144 increased, 47 declined and 9 were unchanged.

The number of workers employed by Australia, increased by 26,900 from April, the statistics bureau said in Sydney today. The number of full time jobs increased by 36,400 and part-time jobs decreased by 9,400 in May, the report said.

Over 280,000 new jobs have been created with 70% full-time employment, between the period August 2009 and April 2010, thus providing a significant boost to consumer incomes, the report said.

However, mining and heavy industry projects in Australia are expected to drop next fiscal following the completion of major export projects, according to economic forecaster BIS Shrapnel. A slump in future commitments through 2009 will also add to the drop.

Mining and heavy industry project construction is expected to drop 3% in the year ending June 30, 2011. By 2012-13, the next round of iron ore, coal, gas and oil projects are expected to lift the employment growth to double digit rate, said Adrian Hart, a senior manager at the company.

China is resisting efforts made by the big three Australian companies to hike iron ore contract prices, according to the China Iron & Steel Association.

“The outlook for the European market is not clear and steel prices may keep falling. I dare say right now no Chinese steel maker would be willing to accept the third quarter prices asked by the trio,” said Shan Shanghua, general secretary of the association in an interview.

The three exporters, Vale SA, Rio Tinto Group, and BHP Billiton Ltd, had dropped the 40-year custom of annual contracts and had started quarterly contracts based on spot market prices from the last quarter.

Basis Yield Alpha Fund of Australian hedge fund Basis Capital filed a $1 billion lawsuit against Goldman Sachs Group Inc in Manhattan Federal Court, claiming it was forced into insolvency after buying mortgage-linked securities created by Goldman.

“Goldman was pressurizing investors to take the risk of toxic securities like Timberwolf collateralized debt obligation off of its books with deliberate false sales pitches for which we want Goldman to be called to account,” said Eric Lewis, lawyer for Basis in his statement.

The SEC had sued Goldman Sachs on April 16 alleging fraud tied to a CDO known as Abacus 2007-AC1.

ASX Movers

Kingsgate Consolidated Limited led gainers in the S&P ASX 200 index with a rise of 9.7% followed by CuDeco Limited 8.2%, iSOFT Group Limited 8.1% and Ausenco Limited 6.9%.

Sundance Resources Limited led decliners in the S&P ASX 200 index with a loss of 8.1% followed by James Hardie Industries SE 3.6%, Energy World Corporation Limited 2.5%, Qantas Airways Limited 2.4% and Henderson Group plc 2.1%.

Other Movers

Alesco Corporation Ltd gained 5.9% to A$2.83 after the maker of building materials and home products was upgraded to “outperform” from “neutral” by Credit Suisse AG.

BHP Billiton plc, the mining company, added 1.4% to A$37.64.

Caltex Australia Limited gained 5.1% to A$10.79 after the oil refiner was upgraded to “buy” from “neutral” by UBS AG.

Kingsgate Consolidated Limited surged 9.7% to A$9.54 after the gold mining and exploration company was upgraded to “outperform” from “sector perform” at RBC Capital.

Rio Tinto Limited rose 2.3% to A$67.89 and Santos Ltd rose 2.4% to A$13.09.

Woodside Petroleum Ltd, the oil and gas producer rose 2.5% to A$43.98.

Wotif.com Holdings Limited increased 4.8% to A$5.23 after the accommodation website was upgraded to “outperform” from “neutral” by Credit Suisse.