Sydney Gains 1%; Revised IMF Outlook

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

Australian stocks traded higher after the IMF lifted its global economic outlook. Toll Holdings agreed to buy two freight forwarding companies in U.K. Itochu, a Japanese trading house agrees to acquire a stake in Extract Resources. BHP may buy assets in Gulf.

[R]6:00 PM Sydney, Australia – Australian stocks traded higher after the IMF lifted its global economic outlook. Toll Holdings agreed to buy two freight forwarding companies in U.K. Itochu, a Japanese trading house agrees to acquire a stake in Extract Resources. BHP may buy assets in Gulf.[/R]

Stocks in Australia rallied amid respite from slowdown fears boosted by the IMF report of positive global outlook.

The ASX 200 Index gained 0.91% or 39.60 to close at 4,396.30 in Sydney today.

Royal Dutch Shell Plc is focusing its investments in Australia, the Gulf of Mexico and U.S. for natural gas that’s trapped in rock formations, and of the proposed investments 40% is earmarked for the Asia Pacific region. Shell, which has been adding more natural gas than oil to its resources since 2005, expects the share of gas to rise to 52% of its total output by the year 2012.

The company is competing with Korean Gas Corp, and China Petroleum & Chemical Corp, for a stake in Santos Ltd’s proposed A$16.4 billion gas project in Queensland, according to the Australian.

Toll Holdings Ltd, Australia’s largest trucking company, has agreed to buy two freight forwarding companies, WT Sea Air Group and Genesis Forwarding Group, for about A$150 million, to expand its business to freight forwarding area in the U.K.

The two businesses will add about A$250 million in annual revenue and also increase earnings per share in the first year after acquisition, Melbourne-based Toll said in its filing to the stock exchange today.

Itochu Corp, a Japanese trading house, has agreed to buy 10.3% stake in the uranium explorer, Extract Resources Ltd of Australia to benefit from the global demand for uranium. The acquisition needs the approval of Australia’s Foreign Investment Review Board. The stake if approved will make Itochu, the third largest shareholder of Extract Resources, the Japanese trader said in a statement today.

The 10% stake will be worth about 15 billion yen, the Nikkei English News reported earlier today.

ASX Movers

Santos Ltd led gainers in the S&P ASX 200 Index with a rise of 8.9% followed by Biota Holdings Limited 8.5%, Platinum Asset Management Limited 8.5% and Ardent Leisure Group 7.6%.

Perseus Mining Limited led decliners in the S&P ASX 200 Index with a loss of 3.1% followed by St Barbara Limited 3.0%, Platinum Australia Limited 2.7%, Transpacific Industries Group Ltd 2.4% and Kingsgate Consolidated Limited 2.2%.

Other Movers

BHP Billiton plc rose 0.3% to A$38.29 after the mining company said it will consider buying assets in the Gulf of Mexico, Morgan Stanley said, citing Chief Executive Officer Marius Kloppers.

Gloucester Coal Ltd closed unchanged at A$12.43 after the company said it is in talks to buy some of Noble’s Australian assets.

Lynas Corporation Limited added 6.3% to A$0.58 after the rare earths explorer says it is well placed to meet any increase in demand that arises from China''s recent tightening of export quotas.

Rio Tinto Limited added 1.5% to A$68.10 after the mining company said Aluminum Corp. of China, the producer of the metal, is in talks with Rio Tinto Group to buy a stake in the $4.6 billion Oyu Tolgoi mine in Mongolia or the U.K. company’s partner in the project, Ivanhoe Mines Ltd.