Stocks in Australia Fall Ahead of Election

Chandrasekhar Atreya
20 Aug, 2010
New York City

Stocks in Australia declined more than 1% on the election jitters. National polls are suggesting a virtual tie for tomorrow

[R]6:00 PM Sydney, Australia – Stocks in Australia declined more than 1% on the election jitters. National polls are suggesting a virtual tie for tomorrow’s election. Australia slips three places to tenth on creditworthiness. Potash Corp rejects again the BHP’s hostile offer.[/R]

Shares in Australia declined ahead of the federal election and on the weakness in the international markets.

Prime Minister Julia Gillard led Labor Party has a slight edge over the Tony Abbott led Liberal-National coalition. The media polls suggest that the election is too close to call.

The ASX 200 Index lost 1.07% or 48.10 points to close at 4,430.90.

Dealing with demand from China and India will be the key economic challenge for the next federal treasurer, RBA Governor Ric Battellino said. He told a business lunch in Brisbane on the eve of federal election whoever won the government would have some tough economic challenges.

We are facing a very strong demand for our resources from our trading partners India and China and if the industry is operating at capacity it will be hard to find workers and get materials. This could lead to inflationary pressures which would need to be managed by the incoming government.

Australia has slipped three places to tenth most creditworthy nation in the world, according to Credit Market Analysis’s quarterly survey.

Wheat exporter AWB Ltd said Canada based Agrium completed its due diligence and executed AWB Ltd.

Canada’s Potash has once again rejected the A$44 billion offer made by BHP Billiton.

Ferry builder Austal posted a net profit for the year ended June 30 of A$37.132 million, up 305% from the previous year, boosted by growth in its U.S. business offsetting the decline in Australia.

Brisbane airport link builder BrisConnections booked a lower full year net but said construction of the $5.6 billion road project is more than 52% complete.

The company reported full year net profit of $17.16 million for the year ended June 30, down 29.6% from the previous year’s $24.39 million.

Since the 1980s, Indonesia was the biggest source of Japan’s LNG supply, but in the first six months of 2010, it was overtaken by Malaysia and then Australia, which is on track to become a key player in this industry.

Resource News

Macmahon Holdings said it won an A$86 million construction contract at Gindalbie Metals’s Karara iron ore project in Western Australia’s mid west region.

Strait Resources upgraded the coal reserves it has at its Jembayan operation in Indonesia.

Petsec Energy expects to account a total dry hole impairment and abandonment expense charge of A$18.5 million for the six months ended June 30.

Vantage Goldfields completed a bankable feasibility study on stage-I of its proposed shallow underground mining production plan at its Barbrook project in South Africa.

Allied Gold said its Gold Ridge development in the Solomon Islands remained on track for first gold output in March 2011.

Gainers and Losers

Perseus Mining Ltd led the gainers in the ASX 200 with a rally of 3.88% to A$2.68 followed by Brambles Ltd 2.54% to A$5.65 and AWB Ltd 2.41% to A$1.485.

Billabong International Ltd led the decliners in the index with a fall of 9.88% to A$8.03 followed by Cudeco Ltd 8.19% to A$2.13 and Isoft Group Ltd 8.11% to A$0.17.