Sydney Index Down on Election Uncertainty

Chandrasekhar Atreya
24 Aug, 2010
New York City

Stocks in Australia fell on continuing election uncertainty. Melbourne water supply eases. AWB shareholders back takeover by Agrium Inc. Mako shares debuts strongly. Macarthur Coal Ltd is looking to raise A$450 million and annual earnings declined 26%.

[R]6:00 PM Sydney, Australia – Stocks in Australia fell on continuing election uncertainty. Melbourne water supply eases. AWB shareholders back takeover by Agrium Inc. Mako shares debuts strongly. Macarthur Coal Ltd is looking to raise A$450 million and annual earnings declined 26%.[/R]

The benchmark index dropped more than 1% to the monthly low as investors await the outcome of Parliamentary election and minority government.

The ASX 200 Index fell 1.08% or 47.7 to close at 4,381.30.

Macarthur Coal Ltd is seeking to raise about A$450 million via an institutional placement and the issue is managed by JP. Morgan.

Macarthur Coal Ltd, the world’s largest producer of pulverized coal, said full-year net dropped 26% as prices of fuel used for steel making and sales to Japan declined.

Net income dropped to A$125.1 million for the year ended June 30 from A$168.2 million, a year earlier, the company said in a statement today.

Melbourne-based Foster’s Group Ltd, Australia’s biggest beer and wine maker, said it posted a second-half loss after a write-down on its wine division, which the brewer may spin off next year.

The net loss was A$820.1 million in the first half ended June 30, compared with net income of A$27 million a year earlier, the company said today.

Global mining group Xstrata made a $428 million takeover offer for Perth-based Sphere Minerals which holds a range of iron ore assets in West Africa.

Origin Energy reported a full-year net profit of A$612 million, down 91% from the previous year, but said acquisitions would start to contribute more in the future.

Globe Securities Ltd recently acquired Mako Energy Ltd for A$7 million and took on its target’s name and suspended Globe shares from trading. Now, Mako shares made a solid debut on the Australian Stock Exchange today.

Select Harvest, almonds and dried fruits producer seeks to raise about A$48 million to increase the company’s own orchards and leased ones. Select Harvest on Monday reported a net profit of A$17.3 million for the year 2009-10, up 3.2% from the prior year’s net of A$16.7 million.

Goldman Sachs is meeting with local bond investors this week as the kangaroo bank bond market heats up. Royal Bank of Scotland deal is progressing well at a price guidance level of 250 basis points over the benchmark rate. The bank launched the three-year bond issue with both fixed and floating tranches.

Melbourne households will be able to water gardens at any time and wash cars at home when water restrictions are eased to stage 2 for the first time in four years. The restrictions will be eased from level 3a to level 2 from September 1 following heavy rains and water storage levels rising to almost 40%, their highest levels in almost three years.

AWB has recommended its shareholders to accept Canadian agribusiness giant Agrium Inc’s A$1.23 billion all-cash offer for the Australian wheat exporter.

Resource News

Mineral Deposits plans to separate its two core assets, the Sabodala gold operations and the Grande Cote mineral sands project in Senegal.

Crusader Resources is in trading halt for an independent estimate of its Borborema gold project.

Artemis Resources said it intersected more gold, silver and copper at Mount Clement in Western Australia.

Pepinnini Minerals signed a joint venture agreement with Grosvenor Gold to explore and develop the iron ore potential of its three tenements in Western Australia.

Giralia Resources reported strong results from recent drilling at the Homestead Marra Mamba prospect at its Western Creek iron ore project in WA.

Gainers & Losers

Cudeco Ltd led the gainers in the ASX 200 with a rise of 30.21% to A$2.22 followed by Caltex Australia Ltd 6.01% to A$11.11 and GPT Group 3.78% to A$3.02.

AWE Ltd led the decliners in the index with a loss of 8.23% to A$1.505 followed by Isoft Group Ltd 6.25% to A$0.15 and Linc Energy Ltd 5.71% to A$1.57.