Australian Home Approvals Fall 1.3%; SunRice Rejects Ebro Deal

Marcus Jacob
31 May, 2011
New York City

Australian benchmark index added 0.9% and current account deficit in the fourth quarter increased to $10.4 billion and home construction approval in April declined 1.3%. SunRice Group shareholders rejected merger proposal with Spain based Ebro Foods.

[R]5:00 PM Sydney – Australian benchmark index added 0.9% and current account deficit in the fourth quarter increased to $10.4 billion and home construction approval in April declined 1.3%. SunRice Group shareholders rejected merger proposal with Spain based Ebro Foods.[/R]

Stocks in Australia gained on the expectations of a speedy resolution to the fast evolving Greek bond crisis. The successful offering of Italian bonds also helped the sentiment and Spain is set to raise as much as 3.5 billion euros this week.

The benchmark ASX 200 index increased 0.9% or 40.80 to 4,708.30 and the All Ordinaries index added 0.9% or 42.80 to 4,788.90.

Of the stocks traded on the Australian Stock Exchange, 691 increased, 457 declined and 372 closed unchanged. Stock trading volume increased to 2.39 billion shares worth $5.8 billion.

The Australian dollar declined a fraction to close at US$1.068 and the crude oil price added US$1.36 to US$101.95.

Current account deficit in the first quarter increased to $10.4 billion from the revised $8.09 billion deficit in the fourth quarter, according to the data released by the Australian Bureau of Statistics.

The statistics bureau also said total number of homes and apartment approved from construction declined seasonally adjusted 1.3% in April from March. The home construction approval fell 3.35 from the earlier month and dropped 12.8% from a year ago.

Separately, Reserve Bank of Australia said seasonally adjusted credit to private sector was flat in April compared to March and rose 3.3% from a year ago.

Stock Movers

Resource stocks, banks and select retailers closed up.

BHP Billiton increased 45 cents to $44.36 and Rio Tinto added 90 cents to $81.50. Newcrest Mining advanced 49 cents to $39.70.

Whitehaven Coal declined 17 cents to $5.73 after the coal miner said it agreed to a joint venture with Japan based Idemitsu Kosan.

Hills Holdings declined 2.5 cents to $1.275 after the pipe maker estimated annual net profit to declined 40% in the current year.

Woodside Petroleum increased 66 cents to $46.63 and Santos gained 26 cents to $14.76.

National Australian Bank added 31 cents to $26.48 ahead of dividend on Thursday, Westpac gained 26 cents to $22.13, ANZ inched up 16 cents to $22.13 and Commonwealth Bank closed up 32 cents to $50.62.

SunRice Group class A shareholders failed to approve with the necessary margin the deal with Ebro Foods. Only 67% of the class A shareholders approved the merger deal with the Spainsh company.

Spain based largest rice processor and the second largest past processor is a significant partner of SunRice.

Earlier class B shareholders approved the deal with 76% voting in favor and the merger deal requires approval of at least 75% of both class share holders.

SunRice is suffering with a heavy debt load of $200 million and has debt to equity ratio of 70%.