Sydney Stocks and Aussie Dollar Falls

Chandrasekhar Atreya
08 Oct, 2010
New York City

The Sydney index traded for a second day in a row in a narrow range. The Australian dollar reached to a new intra-day high of 99.18 U.S. cents. QR National finalizes a $3 billion loan ahead of its float. Coal miner Northern Energy spurns a takeover offer from New Hope.

[R]6:00 PM Sydney, Australia – The Sydney index traded for a second day in a row in a narrow range. The Australian dollar reached to a new intra-day high of 99.18 U.S. cents. QR National finalizes a $3 billion loan ahead of its float. Coal miner Northern Energy spurns a takeover offer from New Hope.[/R]

Stocks in Australia gyrated but closed lower. The sustained rise in the Australian dollar lifted the sentiment in trading but the dollar declined towards the close.

The ASX 200 Index was down 0.21% or 9.9 points to close at 4,681.40. The index gained 2.23% in the week.

The Australian dollar traded at 99.18 U.S. cents and ended the day at 97.60 U.S. cents.

QR National said Friday it finalized A$3 billion loan facility with a consortium of 11 banks ahead of its planned IPO. The loan will be used to finance capital spending and A$1.425 billion maturing in three years and the balance in five years.

“This loan facility allows QR National to start life as a listed company with a strong banking group to support our investment program and maintain a strong growth momentum,” said the company’s CFO Deborah O’Toole.

QR National was assigned a debut credit rating of Baa1 by Moody’s after Standard & Poor’s assigned the freight operator a BBB+ rating ahead of its float.

Brisbane-based Northern Energy, which owns thermal and coking coal tenements in Queensland and NSW, rejected an acquisition offer $192.6 million offer from New Hope, saying the offer was inadequate and would consider a higher offer.

The offer of $1.50 a share by New Hope represents a 35% premium to its last traded price of $1.115 before the offer was announced.

The $1.24 billion takeover offer made by Canada’s Agrium to AWB of Australia is in the best interests of shareholders, according to a report by an independent expert.

Lonergan Edwards & Associates said Friday the offer is fair and reasonable and values the shares of AWB at $1.50 per share at the upper end of its valuation range of AWB of $1.26 to $1.52 per share.

The Reserve Bank of Australia said it is aware of the difficulties faced by property developers in obtaining credit but felt that this sector maybe over reliant on debt.

In a speech to the Property Council of Australia in Brisbane on Friday, RBA Deputy Governor Ric Battelino also said it was difficult not to conclude that financing of the property sector became over extended during the boom years and that a period of adjustment was largely unavoidable.

In an effort to allay fears about loss of taxes, BHP Billiton said it expected to pay about C$90 billion in royalties and taxes to local, provincial and federal governments over the multi-decade operating life of its Jansen potash project in Saskatchewan in Canada.

“Approximately 65% of such payments will be to the government of Saskatchewan,” BHP said in a statement Friday.

The head of one of the nation’s largest irrigation companies said that rioting is a distinct possibility in rural communities over likely drastic cuts in water allocation throughout the Murray-Darling River Basin.

Cuts of up to 43% in some areas of the basin will be detailed by the Basin Authority later on Friday to ease environmental issues of the region.

Resources Daily

Icon Energy was awarded formally a key petroleum tenement, ATP 855P, which is within the rich Nappamerri Trough on the Queensland-South Australia border.

Sundance Energy continued to see strong initial production rates from drilling in the Williston Basin in North Dakota, with average 24-hour test production rates of 1,865 barrels of oil equivalent per day.

Cauldron Energy said Friday it encountered “encouraging results” during the completion of its drilling program at Yanrey, with two more uranium targets identified.

Kingsgate Consolidated Ltd’s drilling extended its mineral resources at the Chatree mine in Thailand, intersecting new high-grade zones in the pit areas.

Augustus Minerals and Golden Gate Petroleum, participants in the Silverwood project on U.S. Gulf Coast, said the Richardson 1 well has been on production for a fortnight now.

Gainers & Losers

Fortescue Metals Group Ltd led gainers in the ASX with a rally of 4.88% to A$5.80 followed by Cudeco Ltd 4.65% to A$2.25, Alumina Ltd 3.93% to A$1.985, Abacus Property Group 3.49% to A$0.445 and Virgin Blue Holdings Ltd 3.33% to A$0.465.

Medusa Mining Ltd led decliners in the index with a fall of 4.37% to A$5.25 followed by Isoft Group Ltd 3.85% to A$0.125, JB Hi-Fi Ltd 3.85% to A$20.5, Harvey Norman Holdings Ltd 3.63% to A$3.72 and St Barbara Ltd 3.49% to A$0.415.