Sydney Stocks Fall; AWB Surges 29%

Chandrasekhar Atreya
16 Aug, 2010
New York City

Stocks in Australia fell on U.S. ahead of uncertainty in federal election. U.S. based Agrium Inc offered 50% more for AWB Limited that may force Canada based GrainCorp to revise its offer. Newcrest Mining second half profit jumps threefold.

[R]6:00 PM Sydney, Australia – Stocks in Australia fell on U.S. ahead of uncertainty in federal election. U.S. based Agrium Inc offered 50% more for AWB Limited that may force Canada based GrainCorp to revise its offer. Newcrest Mining second half profit jumps threefold.[/R]

Australian stocks traded lower on uncertainty over the federal election. The stocks opened higher but steadily lost ground and closed lower.

The ASX 200 Index lost 0.47% or 21.10 to close at 4,438.50.

GrainCorp Ltd is under pressure to revise it’s A$856 million offer for wheat exporter and rural services group AWB Ltd after North American fertilizer group Agrium Inc launched an unsolicited $1.2 billion cash counter this weekend.

Calgary-based AWB’s board will hold discussions with Agrium about its $1.50 per share offer which represents a 57% premium to AWB’s share price ahead of GrainCorp’s takeover announcement. The offer from Agrium was received last Saturday.

Sigma Pharmaceuticals agreed to sell its pharma division to South Africa’s Aspen Pharmaceuticals for A$900 million. Aspen, Africa’s largest drug-maker, is buying the business that Sigma blamed for the record loss in March and reduced earnings forecast in July.

The sale proceeds will exceed Sigma’s net debt and will leave the company with its wholesale and retail operations, the Melbourne-based form said today.

Lend Lease, the property group returned to profit in the year to June from a loss reported in the same period a year ago, and said it had a strong project pipeline in the medium term.

Theiss, construction and mining company will begin work on the eastern section of the Hunter Expressway project in NSW after finalizing the contract for preliminary design and construction at A$825 million.

Theiss will build the 13.3 kilometer four-lane highway, which stretches from the end of the Newcastle Link Road to Kurri Kurri in the Hunter Valley, in alliance with Parsons Brinkerhoff and Hyder Consulting.

Newcrest Mining Ltd, Australia’s largest gold miner, said its second half profit jumped more than threefold due to increased production and prices.

Net income in the half year ended June 30 was A$380.7 million, compared to A$105.7 last year, according to company press release. Newcrest said the takeover of Papua New Guinea-based Lihir Gold is expected to be completed by mid-September this year.

Woodside Petroleum Ltd, involved in an A$13 billion expansion at Pluto Project in Australia, made a gas discovery off the northwest coast. The gas producer said the Alaric well intersected about 185 meters of gas, according to a regulatory statement filed today.

BlueScope Steel Ltd, Australia’s largest steelmaker, swung back to profit in the second half after sales increased and reinstated dividend.

Net income for the six months ended June 30 was A$154 million compared to a loss of A$473 million a year ago, the Melbourne-based company said today. Steel prices averaged 41% higher in the second half than a year earlier.

Resources News

Mirabella Nickel reported a first half loss of A$18.2 million but brokerage house Macquarie maintained its “outperform” outlook on the stock.

Sundance Resources Ltd shareholders overwhelmingly ratified the appointment of the caretaker board installed after the previous board members were all killed in a plane crash in Africa in June. The meeting was called by Talbot Group Investments Pty Ltd.

Dampier Gold expects to debut on the Australian Stock Exchange this week after A$20 million offering was oversubscribed.

Red Fork Energy completed the Moebius 2-28 well at its 100% owned and operated Pawnee Prospect.

AWE extended its dismal run of exploration drilling results, with its Tuatara-1 well in the southern Taranaki Basin failing to make any economic discovery.

Auzex Resources boosted the JORC resource at Bullabulling in WA to more than 1.98 million ounces.

Gainers & Losers

AWB Ltd led the gainers in the ASX 200 with a gain of 29.68% to A$1.42 followed by Elders Ltd 11.65% to A$0.575 and Transpacific Industries Group Inc 7.04% to A$1.14.

Panoramic Resources led the decliners in the index with a drop of 5.95% to A$2.37 followed by Energy World Corp Ltd 4.65% to A$0.41 and Mirabella Nickel Ltd 4.42% to A$1.84.