Australian Stocks Higher; James Hardie Cuts Debt

Marcus Jacob
17 May, 2011
New York City

Australian stocks struggled as commodities traded lower and global economic growth worries resurfaced. Reserve Bank of Australia left its tightening bias in the latest meeting but showed no urgency. James Hardie to reinstate its dividend and lowered its debt.

[R]4:30 PM Sydney – Australian stocks struggled as commodities traded lower and global economic growth worries resurfaced. Reserve Bank of Australia left its tightening bias in the latest meeting but showed no urgency. James Hardie to reinstate its dividend and lowered its debt.[/R]

Stocks in Sydney struggled as the market focused on cross current of weak commodities prices and persistent sovereign debt problems in Europe and U.S lawmakers haggle to raise debt limits as Federal Reserve ends new money printing.

Australian investors continued the guessing game how much China can grow and at what rate the urbanization will continue.

The ASX 200 index declined 33.50 or 0.4% to 4,683.90 and All Ordinaries index edged higher 0.4%.

The Australian dollar closed up US$1.05 and crude oil price futures declined 32 cents to US$97.05.

The latest minutes of meeting of the Reserve Bank of Australia showed a clear tightening bias however policy makers showed no urgency to increase rates at the meeting on May 3.

Stock Movers

BHP Billiton increased 1.5% to $44.15 and Rio Tinto added 1.45% to $80.25. OZ Minerals increased 4% to $1.44. Newcrest Mining increased 0.8% to $37.96.

James Hardie Industries gained 4% to $5.90 after the fibre cement products maker said it will buyback 5% of outstanding shares and resume dividend payment after it second quarter results.

The company also lowered its debt at the end of March to US$40.4 million from US$134.8 million a year ago as a part of its reorganization and it plans to take US$32.6 million charge.

Banks closed higher. ANZ gained 0.8% to $22.49, Westpac Banking Corp added 0.5% to $22.83, Commonwealth Bank advanced 0.8% to $51.89 and National Australia Bank inched higher 0.1% to $26.91.

QBE Insurance Group Ltd added 1.6% to $17.97.

Energy sector stocks closed higher despite the weakness crude oil prices.

Santos Ltd increased 0.7% to $14.20, Woodside Petroleum gained 0.5% to $44.69 and Origin Energy increased 0.9% to $15.99.

Mirvac increased a fraction to close at $1.22 after Managing Director Nick Collishaw reaffirmed company earnings per share estimate between 10.4 cents to 10.6 cents and said that the company is on track to increase “earnings between 12% and 14%.”

The company also sold 94% of its apartment on sales at average price of $1 million and exchanged contracts of $273.5 million for a project in Chatswood on the North Shore of Sydney.

The company also confirmed that its third quarter ending in March pre-sale residential units booking jumped 30% to $1.1 billion from the previous quarter.