Sydney Index Up 0.8%; ASX Takeover Faces More Hurdles

Chandrasekhar Atreya
28 Oct, 2010
New York City

Shares in Sydney rallied after ANZ Bank reported lower loan loss provisions. More lawmakers voiced their opposition to the acquisition of ASX Ltd. Senate vote clears to appointment of committee to investigate banking sector competition.

[R]6:00 PM Sydney, Australia – Shares in Sydney rallied after ANZ Bank reported lower loan loss provisions. More lawmakers voiced their opposition to the acquisition of ASX Ltd. Senate vote clears to appointment of committee to investigate banking sector competition.[/R]

Stocks in Sydney traded higher boosted by the earnings from ANZ Bank, takeover activity in property and the growing opposition to takeover of ASX Ltd.

The ASX 200 Index gained 0.79% or 36.80 to close at 4,684.90 and the Australian dollar closed lower at 97.77 U.S cents.

Australia’s third-largest bank by market cap, ANZ Bank reported Thursday a better than expected full-year underlying profit of $5 billion, up 33% from a year ago, as problem loans declined.

The banks’ statutory net was $4.5 billion, up 53% and the bank said it will pay a final dividend of 74 cents a share, up from 56 cents a year ago.

The takeover of ASX Ltd by the Singapore Exchange is certain to be stymied in parliament after independent lawmakers voiced their disagreement and joined The Greens in opposing the deal.

Australian Senate voted today to set up an inquiry committee to scrutinize the lack of competition in the banking industry. The lawmakers have increasing voiced their growing dissatisfaction on the restrictive lending practices and reluctance of banks to pass on lowered rates by the Reserve Bank of Australia.

Treasurer Wayne Swan agreed on Thursday to make public information used by the Henry tax review to calculate the impact of the federal government’s proposed mining tax.

Consumer confidence is high although warning signs are emerging, a survey found in Australia.

Most consumers are currently not concerned about rising interest rates as they have already counted revised interest rates, a new survey by one of the country’s largest debt collection agencies, Prushka found.

South Australian iron ore developer IronClad Mining released plans to barge iron ore to offshore bulk export facilities developed off the east coast of Eyre Peninsula.

Queensland Treasurer Andrew Fraser said that a plan to force large petrol companies to include ethanol in their fuel was suspended after tax changes. The plan proposed in 2006, required retailers with 10 or more sites to include 5% ethanol in their fuel from December 31.

Queensland government is worried that the tax regime may be unfair to smaller retailer as the federal government has mandated 12.5% excise tax to both domestic and imported ethanol.

Two subsidiaries of Macarthur Coal have been served with an amended statement of claim. The proceedings for an amended claim of $1.193 billion plus interests and costs were commenced in the Supreme Court of Queensland in 2007 by three participants in the unincorporated Monto coal project, namely Sanrus Pty Ltd, Edge Developments Pty Ltd and H&J Enterprises (Qld) Pty Ltd.

The competition regulator ACCC delayed the findings of its investigations into the proposed asset auction of NSW Electricity after two companies AGL Energy and Origin Energy sought clearance from the regulator to bid for the assets. The findings were scheduled to be released today.

Resource News

Tanami Gold said Thursday it aims to triple gold production at its deposits located in the Northern Territory-Western Australia border to more than 150,000 ounces.

ConocoPhillips said Wednesday its earnings more than doubled for the quarter as oil prices rebounded from their 2009 lows.

The company and its partner Origin Energy are likely to sell two trains of LNG by the end of this year from its Australia Pacific LNG project.

Nickel miner Mincor Resources breathed new life into its flagship Miitel project by diversifying it exploration to base metals and gold.

Gainers & Losers

ING Industrial Fund led gainers in the ASX with a rally of 15.22% to A$0.53 followed by Lynas Corp Ltd 8.59% to A$1.58, Sandfire Resources NL 6.62% to A$8.05, Independence Group NL 5.19% to A$7.1 and ING Office Fund 5.17% to A$0.61.

Panoramic Resources Ltd led decliners in the index with a drop of 6.04% to A$2.49 followed by Ten Network Holdings Ltd 5.06% to A$1.50, Paladin Energy Ltd 4.36% to A$4.17, Panaust Ltd 3.92% to A$0.735 and White Energy Co Ltd 3.46% to A$3.91.