Prime Minister Julia Gillard May Disappoint

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

Julia Gillard takes oath as the first woman Prime Minister of Australia after Kevin Rudd lost his party

[R]6:00 PM Sydney, Australia – Julia Gillard takes oath as the first woman Prime Minister of Australia after Kevin Rudd lost his party’s support. Prime Minister Gillard said she will have talks with the miners on the super profit tax. Australian shares turn negative at close.[/R]

Australian stocks gained after Prime Minister Kevin Rudd’s resignation spurred gains in resource stocks, but lost momentum later and closed marginally lower.

ASX 200 lost 0.14% or 6.40 to close at 4,479.70. However, the Materials Index, which includes resource stocks, gained 1%.

Prime Minister Kevin Rudd resigned today after his party elected Julia Gillard for the leadership late last night, paving the way for the first woman Prime Minister to take over the reins of the government. The challenge came after Rudd ratings took a beating following his controversial 40% tax on mining super profits.

She was sworn in as the nation’s Prime Minister at 1:00 p.m. today by Governor-General Quentin Bryce. Wayne Swan will continue as the treasurer and will attend the G-20 conference this weekend in Canada.

However, Gillard has a questionable record as an education minister especially after mishandling of the recent crisis related to international students and persistent problem with a number of universities and colleges that operate with improper certification.

International students’ arrival sharply fell in 2009 an 2010 after several hundred Indian students have faced racially motivated violence. The recent killing of Nitin Garg has still not been solved and the then Education Minister Gillard failed to provide enough support to student community.

Encouraged by the appointment of Julia Gillard as the nation’s new Prime Minister, BHP Billiton has asked its advertising agencies to suspend all its ads against the proposed mining tax. This was confirmed by the company in a statement today. Later the government also withdrew their ads.

Prime Minister Gillard said she will call for general elections in coming months, while addressing a press conference in Canberra today.

The Australian senate has approved revisions to laws aimed at spurring renewable energy investments paving the way for many key projects to proceed ahead in this sector. The amendment calls for larger projects to deliver most of its targets from renewable energy sources.

“AGL Energy Ltd, the country’s largest electricity retailer, has plans to fast track the final approvals for its proposed A$800 million Macarthur wind farm, which when completed will be one of the largest wind farms in the southern hemisphere,” said AGL’s Managing Director, in a statement to the stock exchange today.

Riversdale Mining Ltd has signed an initial agreement with Wuhan Iron and Steel Corp of China to develop a coking coal mine in Mozambique’s Tete province. The initial deal for $800 million allows 40% stake for Wuhan in the project.

“Through our Chinese venture partners, including a logistics accord with China Communications Construction Co, we gain funding to develop the mine and also a buyer for part of the production. We also gain access to world class mine to ship logistics and infrastructure expertise to facilitate the export of the mine’s coal products,” said Riversdale Executive Chairman Michael O’Keeffe in Sydney today.

ASX Movers

Newcrest Mining Limited led gainers in the S&P ASX 200 index with a rise of 0.4% followed by Ansell Limited 0.6%, Coca-Cola Amatil Limited 1.2% and Amcor Limited 1.5%.

Macquarie Group Limited led decliners in the S&P ASX 200 index with a loss of 4.9% followed by Commonwealth Bank of Australia 0.6%, Leighton Holdings Limited 0.1%, Westpac Banking Corporation 1.6% and Rio Tinto Limited 1.7%.

Other Movers

AGL Energy Limited rose 0.07% to A$14.72 after the company is expected to ‘Fast Track’ Australian wind farm project after change in clean-energy law.

Australia and New Zealand Banking Group Limited, the lender, fell 0.1% to A$22.85.

BHP Billiton plc rose 1.5% to A$39.75 after Australia''s Prime Minister Kevin Rudd resigned as his planned tax on the mining industry pulled his ratings down.

Macarthur Coal Limited, the exporter of pulverized coal, added 6.3% to A$12.34.