Queensland Coal Terminal Sale; Lawmakers Resist ASX Merger

Chandrasekhar Atreya
29 Oct, 2010
New York City

Shares in Sydney declined today but gained for the week and month. Queensland puts Abbot Point coal terminal for sale. Sale of new homes dropped in September and demand for credit remained weak. ASX Limited failed to convince lawmakers on the merger benefits with the Singapore Stock Exchange.

[R]6:00 PM Sydney, Australia – Shares in Sydney declined today but gained for the week and month. Queensland puts Abbot Point coal terminal for sale. Sale of new homes dropped in September and demand for credit remained weak. ASX Limited failed to convince lawmakers on the merger benefits with the Singapore Stock Exchange.[/R]

Stocks in Sydney opened sharply lower but manage to rebound and trim losses to 0.5% on the rise in takeover activities talks. ASX Ltd failed to convince lawmakers and RBA governor and his associates are expected to face lawmakers for the scheduled hearing.

The ASX 200 Index in Sydney fell 0.5% or 23.30 to close at 4,661.60.

Stocks in Sydney posted gains for the second month in row in October, rising 0.36% in the month. The index posted a gain of 0.29% for the week.

The Australian dollar traded nearly flat and closed at 97.35 U.S. cents in Sydney today.

The executives of ASX Ltd met with the opposition leaders of the federal government but could not convince them about the merits of the proposed $8.4 billion takeover of ASX Ltd by Singapore Stock Exchange.

RBA Governor Glenn Stevens and deputy and assistant governors will face a parliamentary committee on November 26 in Canberra.

The House of Representatives economics committee questions the central bank governors twice a year on a wide range of topics including interest rate policy.

Sale of new homes rose 0.6% in September from a year earlier, but were down sharply for the quarter, as mortgage rates hit demand while tight credit policy restrained supplies, an industry survey revealed Friday.

Queensland government on Friday called for firms interested in operating the $2 billion Abbot Point coal terminal in the state to submit their offers.

Whitehaven Coal launched a process to identify potential bids for acquisition of the company.

“This will be best served through a formal process, which will cause less disruption to the conduct of our day-to-day business,” Whitehaven said in a statement Friday.

The International Air Transportation Association predicts that by the year 2013, Asia-Pacific market share will grow to almost one-third of total global passenger traffic.

Qantas Group is expected to take advantage of the rising air traffic with more than 150 aircrafts on order, averaging more than one delivery per month for the next eight years.

Demand for credit in Australia remains weak, according to data released by the Reserve Bank of Australia Friday.

Total credit rose just 0.1% in September for an annual rate of 3.3%, above the 3.2% in August. However, credit remained well below the double-digit seen before the global financial crisis. And only demand for housing loans rose 0.6% in September for an annual rate of 8%.

Spot sales of premium coking coal are fetching $228 per ton after record rains in September in Queensland led to a cut in coal production.

Macquarie Group reported first half profits declined 16% to $403 million from a year ago, because of weak market activity and the cost of carrying excess liquid assets.

However, the company said it will be able to maintain its full year forecast.

Origin Energy said it could acquire power assets privatized by New South Wales either with its own funds or with an equity offering.

“In broad terms, origin has enormous financial capability and it is probably not likely it would need to issue new shares to complete a transaction, Grant King, CEO told reporters after the group’s annual shareholder meeting.

He also said that Origin may receive state environment approval from Queensland for its $35 billion Australia Pacific LPG project by next week.

Gem Diamonds, which has a mine in Western Australia, said the price it receives for precious stones rose on the back of demand from China.

Average price per carat increased 44% to $2,422 in October compared with the price in received in the third quarter.

Resource News

China-based Northwest Mining and Geology will subscribe for 43.8 million shares of Meridian Minerals at 10.5 cents a share to maintain its stake at 41.3%.

Cudeco said it encountered high-grade mineralization of gold at its Rocklands copper project in Queensland.

Bannerman Resources completed an updated mineral resource estimate at its Etango project in Namibia by a 31% increase in total metal containment.

Cue Energy Resources reported that for the quarter ended September it posted revenue of $11.62 million on sales of 119,639 barrels of oil and 740.6 million cubic feet of gas.

Gainers & Losers

Cudeco Ltd led gainers in the ASX 200 Index with a gain of 11.16% to A$2.39 followed by Whitehaven Coal Ltd 8.92% to A$6.96, Macquarie Group Ltd 4.78% to A$36.20, TPG Telecom Ltd 4% to A$1.56 and Beach Energy Ltd 3.08% to A$0.67.

Gunns Ltd led decliners in the index with a drop of 7.53% to A$0.675 followed by Lynas Corp 7.28% to A$1.465, Panoramic Resources Ltd5.62% to A$2.35, Roc Oil Co Ltd 4.6% to A$0.415 and Crane Group Ltd 4.05% to A$7.58.