Australian Stock Exchange Halted; QBE Net Declined 17%

Marcus Jacob
28 Feb, 2011
New York City

Australian stocks decreased and markets were halted in the last hour of trading on a computer glitch. QBE Insurance said full-year net decreased 17% and underlying profit margin declined to 15%. QR National swung to a first-half net profit of $278 million. Downer EDI plans to raise capital.

[R]4:30 PM Sydney – Australian stocks decreased and markets were halted in the last hour of trading on a computer glitch. QBE Insurance said full-year net decreased 17% and underlying profit margin declined to 15%. QR National swung to a first-half net profit of $278 million. Downer EDI plans to raise capital after it reported a loss related to Sydney metro network.[/R]

The ASX 200 index declined 6.0 to close at 4,830.50 and the All Ordinaries index dropped 2.3 to 4,922.60. The Australian dollar closed up at US$1.01.

Trading glitch at 3:00 pm AET halted all trades for the rest of the day as the exchange struggled to fix the messaging system.

Trading on the Australian Securities Exchange was halted in the afternoon as the only exchange in the nation struggled with computer system. The system handles nearly $1 billion of trades a day suffered from glitches that prevented dissemination of executed trade information.

QBE Insurance reported full-year net declined 17% to US$1.28 billion after the general insurance and reinsurance group said it suffered “higher than normal frequency” of claims.

The largest Australian insurance by market cap said net earned premium increased 20% to US$11.36 billion and underlying profit margin declined to 15% from 17% a year ago.

The company estimated insurance profit margin between 15% and 18% in the current year and said that latest acquisition of Balboa insurance portfolio from Bank of America Merrill Lynch will help grow business.

The insurer declared final dividend of 66 cents totaling to $1.28 for the full-year.

Downer EDI, the maker of rail carriages reported first half net loss of $103.8 million compared to profit of $87 million a year ago period. The company also plans to raise $87 million and said it will book $250 million loss related to Sydney metro rail network.

The company plans to sell new shares at $3.25 each and said it will not pay any interim dividend.

QR National, the largest freight carrier in Australia, swung to first half net income of $278 million compared to a loss of $132 million a year ago period. Revenues in the period increased 18% to $1.75 billion.

The railroad operator did not declare any interim dividend. The coal hauler also confirmed that recent rains are likely to affect its results and for the full-year earnings before interest and tax are expected between $280 million and $310 million.

The coal transportation company said it may revise the estimate of lost freight to 25 million tons of coals from the previous loss between 15 million tons and 20 million tons.

Stock Movers

Banks generally closed lower. ANZ decreased 10 cents to $24.13 and Commonwealth Bank increased 2 cents to $53.11 and Westpac fell 20 cents to $23.53. NAB decreased 20 cents to $25.80.

Downer EDI stock was halted and closed at $3.92 after it reported first-half net loss of $103 million and said it plans to raise $279 million to fund the Waratah train project in NSW.

Goodman Fielder decreased 2 cents to $1.245 after the food processor said first half net increased to $91.3 million from $90.3 million a year ago period.

Resource stocks gained. Rio Tinto added $1 to $84.93 and BHP Billiton increased 16 cents to $46.11 and Coal & Allied increased $1.46 to $118.40.

QBE Insurance Group declined 26 cents or 1.4% to $18.14 after it reported full-year net decreased 17% to US$1.3 billion.

Woolworths increased 3 cents to $26.88 and Wesfarmers decreased 27 cents to $32.99.