Prospects of Minority Government in Australia

Chandrasekhar Atreya
23 Aug, 2010
New York City

Stocks in Australia stagnated after election results raised the prospect of a minority government. The ruling party needed support of four independents to form a government. Lihir Gold shareholders back takeover plan by Newcrest Mining.

[R]6:00 PM Sydney, Australia – Stocks in Australia stagnated after election results raised the prospect of a minority government. The ruling party needed support of four independents to form a government. Lihir Gold shareholders back takeover plan by Newcrest Mining.[/R]

Australian stocks fluctuated and traded lower after both leading parties face a prospect of minority government.

The ASX 200 Index in Sydney lost a meager 0.04% or 1.9 points to close at 4,429.00.

The closest elections in nearly seven decades left Prime Minister Julia Gillard and opposition leader Tony Abbott taking turns to woo a handful of independents leaving the fate of proposed mining tax hanging in the balance.

The ruling party led the Liberal-National coalition by 72 seats to 70, four short of an absolute majority, according to the Australian Electoral Commission Web site at 5 p.m. local time Monday.

Lihir Gold shareholders backed a $10 billion takeover by Newcrest Mining, creating the world’s fifth-largest gold miner.

GPT Group, the property investor withdrew A$600 million proposal to develop Newcastle’s city center due to lack of commitment from the NSW government.

Potash Corp of Saskatchewan Inc said it has been contacted by China’s Sinochem Group and Brazil’s Vale SA as the company tried to fend off a hostile takeover bid from BHP Billiton Ltd.

Brookfield Infrastructure Partners LP said it will buy the 60% of Prime Infrastructure Group’s stake it doesn’t already own in a transaction valued at A$960 million. Prime shareholders will receive 0.24 Brookfield shares for each share they hold, valuing Sydney-based Prime at A$1.6 billion, the companies said in regulatory filings.

Westpac Banking Corp said its third quarter profit rose 27% as the lender was able to stem losses from loans after the financial crisis.

Cash earnings in the quarter ended June 30 were A$1.4 billion compared to A$1.1 billion in the previous year with impairment charges falling to A$300 million from a quarterly average of A$800 million in 2009, Sydney-based Westpac said in a statement today.

Resources News

Coalworks said it entered into a binding contract to purchase Kurrumbede for $13.94 million.

Chesser Resources said drilling has started at the Kestanelik property in Turkey.

Eldorado Gold provided an update on mineral resources and reserves at its Kisladag Mine in Turkey, based on drilling performance to date during 2010.

Aston said it secured a mining license for the Donald mineral sands project in Victoria.

Pan Asia through Innovation West entered into a binding agreement for purchase of 4.8 million tons of coal over the next four years with Noble Resources.

Gainers & Losers

Prime Infrastructure Group led the gainers in the ASX 200 Index with a gain of 20.83% to A$4.35 followed by Medusa Mining Ltd 8.31% to A$4.04 and Challenger Financial Services Group Ltd 8.24% to A$3.81.

Cudeco ltd led the decliners in the index with a loss of 19.95% to A$1.705 followed by Telstra Corp Ltd 6.42% to A$2.77 and Gunns Ltd 6.25% to A$0.60.