Resource Sector Drive Australian Gains; Brans N Things Postpones IPO

Marcus Jacob
06 Apr, 2011
New York City

Australian stocks edged higher as resource stocks gained. Xstrata confirmed the thermal coal contract with a Japanese utility at 8% higher price. Bras N Things, the lingerie retailer postponed its public offering. Record price in gold and silver lifted miners of precious metals.

[R]5:00 PM Sydney – Australian stocks edged higher as resource stocks gained. Xstrata confirmed the thermal coal contract with a Japanese utility at 8% higher price. Bras N Things, the lingerie retailer postponed its public offering.[/R]

The ASX 200 index increased 13.1 to 4,913.20 and All Ordinaries Index added 13.1 to 5,011.70.

The indexes have gained in the last two weeks but on a low volume as investors worry that the recent rise in stocks and the Australian dollar may have been overdone.

The Australian dollar edged higher to US$1.0374 and crude oil futures added 9 cents to US$108.43 a barrel.

Bras N Things, the lingerie retailer postponed its public offering to raise $300 million as institutional investors stayed on the sidelines.

The offering managed by Citigroup and JPMorgan was expected to be priced as early as next week but investors balked at the company’s high valuation, according to two sources contacted by 123jump.com.

The Australian initial public offering market has been quiet in the first quarter after companies raised US$5.3 billion compared to US$17 billion in the quarter a year ago.

Stock Movers

Resource stocks were in demand as investors focused on the rising commodities demand from Japan after the latest triple disasters.

BHP Billiton increased 0.8% to $48.03 and Fortescue Metals down 0.4% to $6.67.

Separately, Xstrata confirmed at a meeting with analysts that it agreed to sell thermal coal to Japanese electric utility for annual delivery contract at US130 a ton a week ago. The price reflects 8% increase from the current spot price.

Gold miners closed higher after spot price of gold in New York jumped to a new 3-decade high.

Kingsgate increased 2.6% to $9.06 and Newcrest Mining soared 2.9% to $41.71.

BC Iron increased 7 cents to $2.63 after the Takeovers Panel said that the offer withdrawal by the Canadian miner Regent Pacific was not appropriate. However, after the ruling the company said that company can not reinstate the $345 million takeover offer since Standard Chartered Bank has terminated its financing.

Banks gained as broader market rallied. Westpac increased 0.5% to $24.46 and ANZ declined 1 cent to $23.93. Commonwealth Bank of Australia increased 5 cents to $52.30.

Woolworths Limited increased 28 cents to $27.07 and JB Hi-Fi Limited increased 8 cents to $19.94.