Australian Stocks Advance; Rock, MyState Merge

Marcus Jacob
31 Aug, 2011
New York City

The Australian stocks traded higher and the dollar was firm. Traders are betting that the dollar to rise as much as $1.20 on the sustained exports to China and other nations in Asia. The Rock agreed to a merger with MyState on 40% premium.

[R]4:30 PM Sydney – The Australian stocks traded higher and the dollar was firm. Traders are betting that the dollar to rise as much as $1.20 on the sustained exports to China and other nations in Asia. The Rock agreed to a merger with MyState on 40% premium.[/R]

The ASX 200 index rose 27.30 or 0.64% to 4,296.5 and All Ordinaries index added 28.5 or 0.7% to 4,369.9.

The Australian dollar closed down 0.002% to US$1.0682 and gold price increased $36.55 to US$1,832.70.

In trading, turnover decreased to 2.36 billion shares and the trading value declined to $5.63 billion with 610 stocks gained, 435 declined and 381 were unchanged.

The latest batch of the economic data provided another confirmation that the economy is cooling off. The Home Value Index tracked by the RP Data-Rismark declined 0.6% in July in metropolitan cities.

The index has declined 3.4% in the year to August. Home prices in Sydney increased 0.1% and in Adelaide and Perth decreased but prices in Canberra and Darwin showed strong gains.

Yesterday the new building approvals data showed a decline of 15% in the year to July.

Rock Agrees to Merge with MyState

The Rock Building Society agreed to merge with MyState that valued the company at $68.3 million. Under the proposed merger, Rock shareholders will receive 7.75 MyState stocks for every 10 shares held.

The Rock share soared 41% to $2.60 and MyState share increased to $3.50.

After the merger, MyState will manage $1.68 billion and have 41 branches and deposits of $2.24 billion.

Separately, The Rock also reported a 4% decline in full-year earnings of $4.86 million.

Stock Movers

BHP Billiton Ltd increased 39 cents to $39.74 and Rio Tinto added $0.73 to $72.52. Newcrest Mining Ltd added 58 cents to $40.07.

BHP also said it will spend US$367 million to expand its coal handling operation in Newcastle.

Commonwealth Bank of Australia increased 29 cents to $48.22 and National Australian Bank added 6 cents to $23.72. ANZ added 11 cents to $20.29. Westpac Banking Corp gained 12 cents to $20.60.

Woodside Petroleum increased 15 cents to $35.18 and Santos added 5 cents to $11.75. Oil Search decreased 10 cents to $6.32.

Telstra increased 4 cents to $3.03 a day after the competition regulators disagreed with the company plan approved by the government to separate its wholesale and consumer businesses.

Prosperine Cooperative Sugar Milling Association rejected the $115 million takeover from Wilmar International controlled Sucrogen.

On the final day of voting only 69.7% voters agreed to the merger, short of 75% required for the takeover.

Prosperine will now have 5 days to arrange financing to repay a loan from Sucrogen and Westpac.