Australian Dollar Above Parity; Riversdale Approve Merger

Chandrasekhar Atreya
23 Dec, 2010
New York City

Stocks in Australia closed higher as resource stocks led the gainers. Copper closed at a record high and crude oil reached a two-year peak. Australian dollar closed traded above parity reflecting a growing sentiment for high commodities prices in 2011.

[R]6:00 PM Sydney, Australia – Stocks in Australia closed higher as resource stocks led the gainers. Copper closed at a record high and crude oil reached a two-year peak. Australian dollar closed traded above parity reflecting a growing sentiment for high commodities prices in 2011.[/R]

Sydney stocks ended the day on a high after resource stocks led by the miners rallied along with financial stocks.

The ASX 200 Index rose 0.43% or 20.60 to close at 4,799.00 and the Australian dollar rose to close at 1.0028 U.S. cents.

Australian households savings fell in December, a survey showed.

The December survey conducted by the Melbourne Institute household financial conditions showed that the index fell to 32 in December from 32.7 in September. The survey indicated that the proportion of respondents saying they were saving for emergency dropped from 49.1% in September to 46.9% in December.

Riversdale Mining said today it recommended to shareholders the all cash takeover offer from Rio Tinto at A$16 per share valuing the company at $3.9 billion. Rio got the support of Riversdale today after raising its offer.

India’s Tata Steel owns about 24% of Riversdale and also a 35% stake in the Benga coal project in Mozambique. Riversdale owns another major project in Mozambique and controls the Zululand Anthracite operation in South Africa.

Rio Tinto said it divested its holdings of 29.4 million shares in U.S. collier Cloud Peak Energy for $573.3 million.

“Gross proceeds from the over allotment were $74.1 million, bringing the total gross proceeds from the secondary offering to $573.3 million,” Rio Tinto said.

Telstra informed its shareholders today that it will book a A$138 million write-down against one of its China assets following a regulatory ruling. It also said that it would book this charge against its first half financial results.

“Telstra has now updated the Octave business plan with the result it is expected to record the impairment charge against the carrying value of the Octave investments of approximately A$138 million,” the carrier said.

Western Australia’s government approved the first stage of Rio Tinto’s $3.9 billion iron ore expansion in the state’s Pilbara region. This expansion will boost the miner’s iron ore capacity by more than 50% to more than 300 million tons per annum.

Stock Movers

BHP Billiton gained 65 cents to close at A$46.47.

Rio Tinto also gained 42 cents to A$87.20 after the board of Riversdale Mining recommended its takeover offer. Riversdale closed 27 cents higher at A$16.57.

Beach Energy rose after it reported positive results from its shale gas exploration program in the Cooper Basin and gained 7.4% to close at A$0.87.

Telstra Corp rose 1% to A$2.78 after it said it expected an impairment charge against the carrying value of its Octave business in China for about A$138 million.

Commonwealth Bank added 38 cents to A$51.25 while Westpac gained 16 cents to A$22.77. National Australia Bank rose 15 cents to A$24.20 and ANZ added just 8 cents to A$23.71.