Third Weekly Gain in Australia

Chandrasekhar Atreya
17 Sep, 2010
New York City

Stocks in Australia rallied and closed higher for the third week in a row. The weekly gain of 1.7% completes the rise of more than 8% in less than three weeks. Asciano Group raised $1 billion to repay bank loans. Santos secures funds for its Gladstone LNG project.

[R]6:00 PM Sydney, Australia – Stocks in Australia rallied and closed higher for the third week in a row. The weekly gain of 1.7% completes the rise of more than 8% in less than three weeks. Asciano Group raised $1 billion to repay bank loans. Santos secures funds for its Gladstone LNG project.[/R]

Stocks in Australia traded higher to post a third week of gains in a row on rallying metal prices and resource stocks.

The ASX 200 Index gained 0.73% or 33.60 points to close at 4,638.90 and for the week the index gained 1.7%. The index has added more than 8% since August 27.

BHP Billiton said it expects petroleum output to be flat for the first time in four years as the deep-water drilling moratorium in the Gulf of Mexico continues.

“It’s a very significant hit to us but we are doing everything we can do to get back out there and expect to be one of the first companies to return to drilling, once the ban is lifted,” said Michael Yeager CEO of BHP’s oil and gas unit at a conference in New York on Thursday.

Santos Ltd said it procured about A$6 billion by selling 650 million euros of hybrid notes to fund the Gladstone LNG project.

The subordinated notes due 2070, that pay a coupon rate of 8.25% for the first seven years, will be graded BB by Standard & Poor’s, Santos said in its filing with the regulators today.

Asciano Group, Australia’s largest port and rail operator, said it sold $1 billion of U.S. dollar-denominated bonds to repay bank loans.

The company issued $400 million 5-year notes at 3.125% and $600 million of 10-year securities at 4.625%, according to its regulatory filing with the exchange today.

Widespread rains in August has aided New South Wales to declare that drought hit areas in the state dropped to 4.2% from 7.2% in August, state Primary Industry Minister Steve Whan said in a statement today.

The drought data were the best in nine years and the state was on track to produce a record A$2.8 billion winter crop provided threats from disease and locusts are contained, Whan said.

U.S. marketing services leader Omnicom offered to increase its stake on the Australasian company Clemenger Group by offering more than $150 million to acquire half of the shares held by the local staff.

Resources News

Focus Minerals found high-grade gold intersections from an underground drilling program designed to target recently discovered Perseverance North ore body.

Doray Minerals plans a substantial drilling program at Andy Well and Webbs Patch in Western Australia at the end of September.

Minotaur Exploration found significant results for kaolin products derived from its deposits 100 kilometers southeast of Ceduna in South Australia.

Encounter Resources’ initial assay results from the air-core drill program at the BM1 prospect in Yeneena project in Western Australia revealed a number of thick intersections.

Arafura Resources signed an agreement with OneSteel to buy 800 hectares of land in South Australia for its proposed rare earths processing plant.

Gainers & Losers

Sundance Resources Ltd led the gainers in the ASX 200 with a gain of 8.89% to A$0.245 followed by Riversdale Mining Ltd 5.27% to A$10.79 and Virgin Blue Holdings Ltd 5.06% to A$0.415.

Biota Holdings Ltd led the decliners in the index with a fall of 3.61% to A$0.935 followed by Pacific Brands Ltd 2.56% to A$1.14 and Incitec Pivot Ltd 1.98% to A$3.46.