Foster's Rejects SAB Miller Offer; Australian Stocks Follow Higher Oil

Marcus Jacob
21 Jun, 2011
New York City

Australian stocks edged higher following a rise in commodities and international markets. The Euro-zone ministers, ECB, IMF and Greece remain at odds in how to fund the last portion of first bailout. Foster

[R]4:00 PM Sydney – Australian stocks edged higher following a rise in commodities and international markets. The Euro-zone ministers, ECB, IMF and Greece remain at odds in how to fund the last portion of first bailout. Foster’s soared after it rejected all-cash bid from SAB Miller.[/R]

Australian stocks rebounded after global markets and commodities edged higher. The nervous investors resumed buying stocks on the expectations that the fast evolving Greek crisis will be contained and spread to other smaller economies in the euro-zone.

The statement from the International Monetary Fund highlighted the underlying risks of Greek crisis is not contained soon.

The statement in a regular report released last evening noted “failure of decisive actions” in tackling could quickly “spread the tensions to the core of the euro area” and threaten the world recovery.

The euro area finance ministers are looking for austerity terms that are not yet agreed in Greece and the debt restructuring plan is not accepted by the European Central Bank.

And, the IMF is not ready to fund its portion of the first bailout to Greece unless Greece passes the austerity measures and the euro-zone fully funds its share first.

The ASX 200 index increased 56.50 or 1.3% to 4,508.2 and All Ordinaries index added 1.1% 52.4 to 4,564.9.

The Australian dollar decreased to US$1.057 and crude oil increased 98 cents to US$94.61.

In trading, turnover decreased to 2.33 billion shares worth $4.9 billion. Of the stocks traded, 570 stocks increased, 581 decreased and 409 closed unchanged.

Stock Movers

Energy related stocks led the gainer in trading today.

Woodside Petroleum increased 99 cents or 2.5% to 40.90 and Santos Ltd increased 32 cents to $13.46. Origin Energy added 29 cents to $15.37.

Miners gained after metals and commodities prices advanced in international markets. In Sydney trading, gold increased $4.98 to US$1,543.08.

BHP Billiton increased 64 cents to $42, Rio Tinto edged up $1.34 to $78.64 and Fortescue Metals gained 6 cents to $6.08.

Banks closed higher and participated in the rally.

ANZ increased 31 cents to $21.55, National Australia Bank added 20 cents to $24.64 and Commonwealth gained 76 cents to $50.26. Westpac closed up 31 cents to $21.43.

Foster’s Group Ltd led gainers in the ASX 200 index with a rise of 61 cents or 13.5% to $5.14. The brewer rejected the all-cash offer of $9.51 billion from SAB Miller. The company rejected $4.90 a share offer and said it “undervalues” the group.

Including the debt, the deal value increases to $11 billion.

The unsolicited bid from SABMiller follows after the global brewer formally amended the standstill agreement that released the company to make a formal bid.