Retailers in Sydney Rise; Mega Projects Face Cost Overruns

Chandrasekhar Atreya
10 Jan, 2011
New York City

Stocks in Sydney traded in a narrow range to close higher on the strength in retailers. Australia starts fortnightly income assistance of A$500 for flood-affected workers. Delays in mega-projects have cost Australia more than A$8 billion in cost blowouts in 6 years.

[R]6:00 PM Sydney, Australia – Stocks in Sydney traded in a narrow range to close higher on the strength in retailers. Australia starts fortnightly income assistance of A$500 for flood-affected workers. Delays in mega-projects have cost Australia more than A$8 billion in cost blowouts in 6 years.[/R]

Stocks in Sydney fluctuated in a narrow range except stocks in retail sector closed higher.

The ASX 200 rose 0.16% or 7.30 to close at 4,712.30.

The Australian dollar traded closer to parity at midday, after being put under pressure in early morning trade and later rebounding. It closed at 99.48 U.S. cents in Sydney today.

The federal government in Australia decided to help workers affected by floods with A$500 a fortnight as income assistance to those who could not receive their normal work week paycheck.

“This measure is to assist people who are not able to do their normal work. The payments will begin next week,” Gillard told reporters in Canberra today.

Prime Minister Julia Gillard reiterated today that floods sweeping across the country’s north east and crippling coal industry would not affect the expected return to budget surplus in 2012-13.

BHP Billiton has awarded LogiCamms a $10 million contract for delivery of a process facility at its Olympic Dam site in Roxby Downs in South Australia. The contract is to build a process facility at the existing plant that produces copper, uranium and gold.

Cougar Energy, the energy company embattling water contamination scare in Queensland raised A$1 million from institutions and investors by selling about 27 million new shares at 3.7 cents per share, progressed under the 15% placement capacity of the company not needing shareholder approval.

“The funds will be used for working capital and advancing the company’s underground coal gasification projects in Australia and overseas,” Cougar said today.

Fletcher Building, which made a hostile bid to acquire Crane Group in December raised the cash portion of it’s A$740 million offer by 4 cents to maintain a value of A$9.35 a share.

The number of jobs advertised for dropped 2.3% in December, a survey showed.

The December Advantage Job Index showed jobs advertised in the retail sector recorded a 12% drop followed by 10.77% drop in tourism and hospitality sector. Out of the 16 categories surveyed, only two, engineering & mining and human resources recorded an increase in job advertisements.

Australia’s resources sector has been hit hard by a cost blowout of more than A$8 billion in mega-projects in the past six years, with more such overruns expected as more projects approvals are expected amid dwindling supply of skilled workers, the Australian reports.

There have been 15 mega-projects approved since 2000 of which only one, ConocoPhillips’ $3.3 billion Darwin LPG project, has reached production on time and budget.

Stock Movers

BHP Billiton lost 17 cents to A$44.45 and rival Rio Tinto also fell 12 cents to A$84.36.

Commonwealth Bank of Australia added 16 cents to A$50.05 while National Australia Bank gained 10 cents to A$23.79. ANZ was 4 cents higher at A$22.96 and Westpac Banking Corp was the sole large bank to drop 8 cents to A$22.07.

Cougar Energy gained 19.05% or 5 cents to A$0.05 after it successfully raised A$1 million for capital from investors and institutions.

Crane Group was 9 cents higher at A$9.39 after Fletcher Building increased its hostile bid offer.

Woolworths added 9 cents to A$26.36 and Myer gained 11 cents to A$3.49. David Jones rose 2.67% to $4.62.