Sydney Rallies 1.9%; Consumer Confidence Rises

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
14 Jul, 2010
New York City

Stocks in Australia traded higher on rising consumer confidence and the economic update by the government. Australia delays approval for Santos project by three months. Coal shipments reach record levels in June from Hay Point port.

[R]6:00 PM Sydney, Australia – Stocks in Australia traded higher on rising consumer confidence and the economic update by the government. Australia delays approval for Santos project by three months. Coal shipments reach record levels in June from Hay Point port. Shareholders of Arrow Energy approve the takeover offer of Royal Dutch and PetroChina.[/R]

Australian stocks traded higher after the Treasurer released the first update on the nation’s economic outlook projecting a 3% expansion in 2010-11 and a higher-than-expected surplus in 2013. The report that consumer confidence surged the most in July in the last 13 months also added to the sentiment.

The ASX 200 Index started trading on a bright note and ended 1.87% higher or 82.10 to close at 4,462.40 in Sydney today.

Treasurer Swann said the Australian economy continues to lead the developed world, with a strong employment outlook and a budget back on track, in a statement released in Canberra today.

“The economy will expand 3% in 2010-11 and the government will raise an additional A$6 billion in resource company tax because of higher commodity prices. The economy will expand to give a surplus of A$3.1 billion in 2012-13,” Swann said in his statement.

The consumer confidence index jumped 11.1% to 113.1 points, according to a survey of 1,200 consumers done between July 5 and July 12 by Westpac Banking Corp and Melbourne Institute.

Xstrata Plc, after resuming work on the Ernest Henry copper mine in Queensland, is planning to begin its first shipment of iron ore concentrate to Asia from the Townsville port in the first half of next year.

The expansion project is targeting production of 1.2 million tons a year of magnetite concentrate with 22% iron ore content and the concentrate will be sent by rail from Cloncurry to Townsville for export to Asia in the first half of 2011, said the company in its statement.

The Australian government has delayed by three months its decision about the approval of proposed natural gas projects by Santos Ltd and BG Group Plc, as it needs more time to study its impact on the environment.

Australian Environment Minister Peter Garrett extended the review period for the coal-seam gas projects to October 11, in order to study the environmental risks posed by significant amount of water and salt extracted from the seams, said spokesman Ben Pratt today.

Coal shipments from Australia’s Hay Point port, climbed to a record in June after coordination efforts of rail deliveries improved substantially.

Coal Exports reached 10.1 million tons from Dalrymple Bay and Hay Point terminals, according to figures provided by the North Queensland Bulk Port Corporation Web site. “The rate was achieved by reducing the number of train cancellations and increasing the volume of coal railed to the port,” said Dalrymple Bay General Manager of Operations, Greg Smith in his response to questions.

Arrow Energy Ltd shareholders today approved the takeover offer of A$3.5 billion made by Royal Dutch Shell Plc and PetroChina Co.

Shareholders also backed the spin-off of Dart Energy Ltd, a new company that will hold Arrow Energy’s overseas gas assets and stakes in Australian-listed companies, the Brisbane-based Arrow said in a statement to the stock exchange in Sydney today.