Sydney Gains; Australia Sells $800 M Bonds

Chandrasekhar Atreya
23 Jul, 2010
New York City

Stocks in Australia gained after world markets surged and U.S. and European indexes gained at least 2%. NAB finds a buyer for North platform of Axa Asia Pacific. NSW plans to sell its waste water management unit. Cougar Energy lays off workers. Sandfire sells stake to Korea

[R]6:00 PM Sydney, Australia – Stocks in Australia gained after world markets surged and U.S. and European indexes gained at least 2%. NAB finds a buyer for North platform of Axa Asia Pacific. NSW plans to sell its waste water management unit. Cougar Energy lays off workers. Sandfire sells stake to Korea’s LS-Nikko Copper.[/R]

After a poor start to the first week of the election campaign, Australian shares gained in trade today, buoyed by optimism in U.S. and Europe.

The ASX 200 Index gained 1.91% or 83.70 to close at 4,458.40.

National Australian Bank Ltd finalized a deal to sell the North platform of Axa Asia Pacific Holdings Ltd to 100F Holdings Ltd to win regulatory approval to buy the rest of the assets of the investment manager according to The Sydney Morning Herald.

Asian institutional buyers, sovereign wealth funds, and Australian property funds are among bidders for the $238 million industrial property portfolio sold by Sydney-based Colonial First State, the asset management arm of Commonwealth Bank of Australia.

“When we announced the fund was being wound up, we received several approaches from both on-shore and off-shore parties who were looking to but the portfolio as a whole. It is a good portfolio to either bolt on to an existing portfolio or to get you started in Australia,” said Darren Steinberg who is head of property at Colonial.

AGL Energy Ltd, the nation’s largest electricity retailer, said it has raised $300 million from its first sale of bonds to U.S. private investors, to repay loans.

Sydney-based AGL sold $165 million of 12-year notes that it will swap back to Australian dollar debt by paying a margin of 259 basis points more than the bank bill swap rate. It also sold $135 million of 15-year bonds and paid a spread of 254 basis points once the proceeds are exchanged for Australian dollars, according to the filing.

The NSW government has confirmed that private equity firms are among interested bidders for its waste water management arm, WSN, which is expected to fetch more than $200 million.

Balanced superannuation fund returns have failed to keep pace with investments such as low-risk bonds and gold over the past decade even after retirement schemes posted double-digit gains in the year to June.

Gold explorer Aruma Resources made a quiet debut on the Australian Stock Exchange, opening at 1 cent discount to its 20 cents per share initial offer price.

The Australian Office of Financial Management sold $800 million of Treasury Bonds that mature on June 15, 2016, at a weighted average issue yield of 5.0188%. The bonds carry a coupon rate of 4.75%. There were 58 bids for the issue worth a total of $2.385 billion. Of the bids, only 11 were successful, with five receiving full allocation.

The Reserve Bank of Australia did not participate in the offering, AOFM said on Friday.

Engineering firm UGL Ltd’s 50-50 joint venture with German insulation company Kaefer won a $500 million contract with Esso Australia. The seven year contract is for maintenance and minor project services, UGL said in a statement on Thursday.

The Australian Competition and Consumer Commission cleared the sale of 295 Mobil retail assets to7-Eleven and the on-sale of a number of the Australian assets to Peregrine on the condition of each acquirer divesting certain assets.

The services company SAI Global Ltd unveiled a $193 million acquisition in the U.S. partly funded by a $130 million through capital raising. Risk management specialist SAI Global announced plans to acquire U.S.-based corporate compliance firm Integrity Interactive.

Output News

Newcrest Mining said its gold and copper production for the 12 months ended June 30 was within guidance.

Nickel miner Mincor Resources forecasted a 20% increase in output in 2011 as it resumes production from its flagship Miitel mine.

Woodside Petroleum Ltd said its second quarter sales rose 48% on higher prices for the fuel. Sales climbed to $1.07 billion in the quarter to June 30 from $728 million a year earlier, Woodside said in its filing with the stock exchange.

But production fell 10% in second quarter due to NW Shelf maintenance shutdowns, the sale of Otway assets, and output declines in Enfield and Neptune fields.

Gainers & Losers

Kagara Zinc Ltd led the gainers in the ASX 200 with a gain of 10.28% to A$0.59, followed by White Energy Coal 8.06% to A$3.35, Ausenco Ltd 8.04% to A$2.42 and Southern Cross Media Group Ltd 6.59% to A$1.78.

Linc Energy led the decliners with a loss of 2.23% to A$1.535 followed by Sigma Pharmaceuticals 1.16% to A$0.425, and Charter Hall Retail 0.92% to A$0.540.

Resources News

Embattled underground coal gasification company Cougar Energy laid off most of its staff, a week after Queensland authorities ordered a shut-down of the company’s flagship Kingaroy project over water poisoning worries.

Sandfire Resources struck an agreement with Korea’s LS-Nikko Copper, the world’s largest copper smelter, which will see the company emerge with a 12.5% stake in Sandfire and become one of its major customers.

AngloGold Ashanti Ltd’s Tropicana joint venture with Independence Group NL in Western Australia reported promising mining results. The project 70% owned by AngloGold found gold strikes as high as 4.4 grams per ton at the Boston Shaker deposit and 6.1 grams per ton at the Havana Deeps mineralization.