Australian Stocks and Dollar Trade Higher

Chandrasekhar Atreya
11 Oct, 2010
New York City

Australian shares closed higher to touch a new five-month high and the dollar firmed after the IMF meeting in Washington failed to produce a consensus. Home loan approvals rise in August. QR National IPO will be the largest offering after Telstra.

[R]6:00 PM Sydney, Australia – Australian shares closed higher to touch a new five-month high and the dollar firmed after the IMF meeting in Washington failed to produce a consensus. Home loan approvals rise in August. QR National IPO will be the largest offering after Telstra.[/R]

Australian stocks traded higher and the dollar was firm. World investors are expecting another stimulus form the U.S. Federal Reserve to lift the U.S. economic growth. The Australian dollar was nearly unchanged after the meeting of world financial leaders failed to produce a consensus.

The ASX 200 Index rose 0.34% or 16.10 points to close at 4,697.50 and the Australian dollar closed at 98.42 U.S. cents. The dollar traded firm after the meeting of world financial leaders in Washington failed to produce a clear direction to solve global financial imbalances.

Miners led the gainers and Lend Lease said it is looking to invest in Asia. Fortescue Metals surged more than 7.7% after the company announced a new financing facility to lower the leverage on the balance sheet.

Approvals for home loans rose for the second month in August as home buyers were encouraged by stable interest rates.

Housing finance commitments for owner-occupied dwellings rose 1% in August, seasonally adjusted to 47,540, the Australian Bureau of Statistics said Monday. While the median market forecast was for a 1% rise in the month, the composition of the data was mixed.

Construction of dwellings fell 1% in the month while purchases of new dwellings fell 2%. The only sign of strength in the data was purchase of established dwellings, which rose 1.4% in the month.

Queensland government is selling QR National since the listing of telecom monopoly Telstra. The local government will retain 25% to 40% of the float depending on the demand. The shares will be priced between $2.50 and $3 and retail investors paying no more than $2.80 per share, a 10% discount to the offering price for institutional investors.

BlueScope Steel said in its annual report on Monday that export steel prices fell by more than $100 per ton during the three months to September 30. The steelmaker also experienced higher raw material prices and softer demand during the period, particularly from distributors.

Virgin Blue Holdings said Monday last month’s outage of its reservations, check-in and operating systems cost the business between $15 million and $20 million. The computer reservation system crash on September 26 caused severe disruption of flights and passengers for 11 days.

Mining exploration company Metminco is seeking $30 million in a share placement with institutional investors to help the company accelerate exploration in Peru and Chile. The company said it will issue $30 million worth of shares at 20 cents to institutional investors, possibly broaden the company’s shareholder base and introduce cornerstone investors.

Northern Energy Corporation said its Colton Coking Coal project near Maryborough in Queensland cleared its final federal environmental hurdle.

The coal explorer said Monday that the regulatory agency had deemed the development of the Colton resource as not a controlled action under the Environmental Protection and Biodiversity Conservation Act of 1999.

Resources News

Peak Oil & Gas formally launched its $55 million initial public offer, which will rank as one of the largest from the petroleum sector this year.

Proto Resources & Investments said it has applied for four new exploration licenses covering a combined area of 357 square kilometers in the Doolgunna region in Western Australia.

Pilbara Energy entered an option agreement to acquire a 55% interest in a private Indonesian company that holds rights to a potentially high-grade vein of gold deposit in Sulawesi.

First assays of a two-hole drill program by Planet Metals at its Mount Cannindah copper-gold project confirmed that the mineralized zone extends down of the existing resource.

Gainers & Losers

Panaust Ltd led gainers in the ASX 200 with a rise of 11.49% to A$0.825 followed by Cudeco Ltd 8.44% to A$2.44, Medusa Mining Ltd 8% to A$5.67, Fortescue Metals 7.76% to A$6.25 and Mt Gibson Iron Ltd 6.32% to A$2.02.

Isoft Group Ltd led decliners in the index with a drop of 4% to A$0.12 followed by Virgin Blue Holdings Ltd 3.23% to A$0.45, Charter Hall Office REIT 3.05% to A$2.54, Abacus Property Group 2.25% to A$0.435 and Emeco Holdings Ltd 2.22% to A$0.88.