Sydney Gains; Rio Net Surges

Chandrasekhar Atreya
05 Aug, 2010
New York City

Stocks in Australia rallied ahead of results from Rio Tinto. Axa Asia Pacific stock halted as it still negotiates with ACC. Intoll gives Canada Pension Board one more week for due diligence. Victoria seeks private builders for its rail tunnel.

[R]6:00 PM Sydney, Australia – Stocks in Australia rallied ahead of results from Rio Tinto. Axa Asia Pacific stock halted as it still negotiates with ACC. Intoll gives Canada Pension Board one more week for due diligence. Victoria seeks private builders for its rail tunnel.[/R]

The Australian stocks struggled but closed higher ahead of earnings from Rio Tinto. The volatile market index fluctuated several times before the close.

The ASX 200 Index gained 0.54% or 24.4 to close at 4,566.50.

Rio Tinto has upped its spending on iron ore expansion projects to more than $1 billion and later reported first half net income of $5.85 billion.

Shares of Axa Asia Pacific Holdings have been put on trading halt from today until Monday as National Australian Bank issued a short statement saying it remains in discussions with the competition regulator about it’s A$13.3 billion takeover offer for the wealth manager.

In a statement to the stock exchange, the bank confirmed press reports that it was still talking to the Australian Competition and Consumer Commission about the proposed deal. Axa Asia Pacific requested the trading halt on Thursday morning.

The Australian branch of BNP Paribas priced A$1 billion in three year bonds priced 105 basis points over swap, a lead manager said. The offer was split between a A$450 million fixed rate tranche and A$550 million floating rate one.

Intoll Group extended the due diligence period given to the Canada Pension Plan Investment Board by one week, according to a report in the Australian Financial Review’s Street Talk column.

Buyers of wheat are seeking supplies from Australia as drought brings down production in the Black Sea region of Russia. There is plenty of demand that is coming back to the Australian region, said Tom Puddy, wheat marketing manager of Perth-based CBH Group’s export division today by phone.

Victoria government is seeking private builders to build, fund and operate a A$5 billion rail tunnel under central Melbourne, the Australian Financial Review said. Prime Minister John Brumby said the government would like to use a public-private partnership to build the first stage of the tunnel from the city’s inner west, under the central business district, to St Kilda Road, the newspaper reported.

Resource News

Uranium miner Paladin Energy joined forces with nuclear giant China Guangdong Nuclear Power which could lead to possible partnerships in its suite of uranium projects.

Uran will not proceed with the agreement to acquire Discovery Minerals.

Genesis Minerals will acquire the Dinamarquesa gold/copper project in northern Chile.

Gainers & Losers

Linc Energy Ltd led the gainers in the ASX 200 with a gain of 7.16% to A$1.87 followed by Paladin Energy Ltd 7.07% to A$4.09 and Transpacific Industry Group Ltd 6.7% to A$1.115.

Singapore Telecommunications Ltd led the decliners with a loss of 2.77% to A$2.46 followed by Paperlinx Ltd 2.34% to A$0.625 and Tabcorp Holdings Ltd 2.17% to A$6.76.