Australian Miners Raise $250 Million; NRW Earnings to Lag Estimates

Marcus Jacob
14 Apr, 2011
New York City

Australian stocks declined ahead of G-20 finance meeting and China economic data. Several mining companies announced or completed fund raising totaling $250 million. NRW Holdings estimated 2011 sales to increased 15% but earnings will be at the lower end of the estimates.

[R]5:00 PM Sydney – Australian stocks declined ahead of G-20 finance meeting and China economic data. Several mining companies announced or completed fund raising totaling $250 million. NRW Holdings estimated 2011 sales to increased 15% but earnings will be at the lower end of the estimates.[/R]

The Australian stocks struggled ahead of G-20 finance ministers’ meeting in Washington tomorrow and China economic data. Stocks in Australia have been on the rise in the last five weeks as capital raising gets in full swing. Today at least $250 million of fund raising were either announced or completed.

The ASX 200 index declined 26.80 or 0.6% to 4,884.20 and All Ordinaries index dropped 0.5% or 27.2 to 4,972.40.

The Australian dollar closed up 1 cent to US$1.0524 and crude oil futures increased 23 cents to US$107.34.

NRW Holdings said it plans to raise $80 million after it won a mining service contract at the Middlemount coal project.

The company also set full-year 2011 sales target of increase of 15% to $700 million but earning will be at the low end of the market estimate between $40 million and $45 million.

The company has an order book of $1.45 billion and bidding on $7.67 billion projects. NRW was on hold ahead of the announcement and last traded at $2.85.

In other fund raisings, Galaxy Resources finalized $120 million at $1.10 a share and Nexus Energy also completed the $57 million of its $120 million offering.

Stock Movers

Leighton Holdings plunged 11.89% or 3.6% to $24.93 after the stock reopened from a trading halt last week. Earlier in the week, the company announced a full-year loss for the first time in 25 years and announced a plan to raise $757 million at a 20% discount to the Friday’s close price.

Miners declined after Rio Tinto reported quarterly production estimates. The decline in production was widely expected as heavy rains and flooding affected the Pilbara region in the period.

BHP Billiton declined 57 cents to $48.01 and Rio Tinto dropped 59 cents to $85.12.

Galaxy Resources dropped as much as 10% to $1.23 after it announced fund raising.

Nexus Energy dropped 8% to 45 cents after it resumed a trading halt last week and the company placed $57 million with institutional investors and $55 million in block trades.

National Australia Bank increased 3 cents to $26.47 and Westpac added 2 cents to $24.92. ANZ fell 31 cents to $24.01 and Commonwealth Bank dropped 22 cents to $52.67.

Bank of Queensland increased 8 cents to $9.85 after it reported first half profit declined 45% on a rise in bad debt expenses. However, the bank estimated lower bad debt expenses in the current half.