Sydney Index at 20-Week High

Chandrasekhar Atreya
27 Sep, 2010
New York City

Sustained gains in the Aussie dollar and improved sentiment in New York trading lifted Australian index to 20-week high. The panel on mining tax schedules meeting with industry in the next month. Nufarm Ltd secures waivers on its banking covenants.

[R]6:00 PM Sydney, Australia – Sustained gains in the Aussie dollar and improved sentiment in New York trading lifted Australian index to 20-week high. The panel on mining tax schedules meeting with industry in the next month. Global warming activists start protests at Newcastle port. Nufarm Ltd secures waivers on its banking covenants.[/R]

Consumer staples and banks led the Australian indexes to their highest close since May 4, led by strong gains by U.S. and European markets and a sustained gain in the Australian dollar.

The ASX 200 Index gained 1.6% or 73.50 to close at 4,675.40. The Australia dollar traded firm but at the close edged higher to 95.89 U.S. cents.

The team appointed by the Federal government tasked with facilitating the passage of the controversial mining tax will kick off its industry in Perth next month. The Policy Transition Group, headed by Resources Minister Martin Ferguson and former BHP Chairman Don Argus, held their first meeting in Canberra last week.

After the meeting in Perth on October 7 and 8, the team will move to Brisbane, Adelaide, Sydney and Melbourne.

Wesfarmers said it plans to invest more than A$600 million in expanding its Bunnings chain of hardware stores across New South Wales.

More than 40 activists protesting against global warming were arrested after climbing atop coal piles with banners and placards at the Port of Newcastle, disrupting loading at the world’s largest coal exporting port.

The protesters from Rising Tide Newcastle began their protests at dawn on Sunday. The ABC News reported that people had chained themselves to loaders which stopped operations from dawn until mid morning.

Gas companies LNG Ltd and Metgasco agreed to jointly study the feasibility of a project converting gas to liquefied natural gas at the Gladstone project in Queensland. The project will look at the possibility of a new LNG facility in Brisbane, while Metgasco will look at a separate LNG project, perhaps a floating offshore one.

Both these projects would use gas from Metgasco’s Clance Moreton Basin in Northern NSW.

Nufarm Ltd said it was able to secure waivers on its banking covenants in respect of the quarters ending July 31 and October 30. The company’s board also resolved that no full-year ordinary dividend will be paid by the company for the current financial year.

Resources News

Arrow Energy offshoot Dart Energy and partner Apollo Gas both called for trading halts Monday morning citing transaction talks, triggering speculation that Dart Energy maybe getting ready to takeover its smaller rival.

Jabiru Metals started a scoping study into a possible 50% expansion of its treatment plant at Jaguar project.

Kingsgate Consolidated said Monday monsoon rains, maintenance repair work and less-rich ore at its Chatree mine in Thailand are together responsible for cut in gold output in September.

Talks have resumed between Aquila Resources and Brazilian miner Vale over what constitutes a fair market value for Aquila’s 24.5% stake in the Brazilian’s hard coking coal project in Queensland.

Gainers & Losers

White Energy Company Ltd led gainers in the ASX with a rally of 9.36% to A$4.09 followed by Panaust Ltd 6.15% to A$0.69, Lynas Corp Ltd 5.88% to A$1.35, Equinox Minerals Ltd 5.74% to A$5.71 and Panoramic Resources Ltd 4.96% to A$2.75.

Murchison Metals Ltd led decliners in the index with a fall of 10.22% to A$1.625 followed by CabCharge Australia Ltd 3.53% to A$5.74, Healthscope Ltd 3.37% to A$6.02, CFS Retail Property Trust 2.56% to A$1.90 and Eldorado Gold Corp Ltd 1.94% to A$19.2.

Nufarm increased 5 cents to A$4.10 after it negotiated loan modification and suspended the dividend.

Wefarmers gained 98 cents to A$34.73 after the retailer said it will invest more than A$600 million to expand its hardware chain Bunnings by 18 stores in the next three years.

Murchison explained in a letter to the ASX that its partner Mitsubishi is committed to the joint venture and the project will begin iron ore shipment in 2014. Earlier the stock fell as much as 15% on the rumors that Mitsubishi is likely to pull out of the venture.