Australian Bankruptcies Rise; Myer Holds Annual Outlook

Marcus Jacob
09 Nov, 2011
New York City

Australian stocks edged higher after confidence index rose and better than expected earnings from Myer and Seven Group Holdings. Bankruptcy filings increased 18% in the third quarter to 2,961.

[R]6:00 PM Sydney – Australian stocks edged higher after confidence index rose and better than expected earnings from Myer and Seven Group Holdings. Bankruptcy filings increased 18% in the third quarter to 2,961.[/R]

Stocks in Australia jumped after China reported a slowdown in October inflation and confidence index rose after the rate cut.

The government report showed that mortgage loans for homes or apartments increased 2.2% in September from the previous month. Last week the government report indicated that home prices fell 1.2% in quarter to September, third quarterly decline in a row.

The confidence index measured by Westpac Banking Corp and Melbourne Institute increased 6.3% to 103.4, the highest since May. The survey was conducted in the first week in November.

The ASX 200 index rose 52.3 or 1.2% to 4,346.1 and All Ordinaries index increased 1.1% or 49.5 to 4,306.20.

The Australian dollar fell 1.7% to US$1.021 and gold price was nearly flat.

In trading, 1.84 billion shares changed hands worth $4.62 billion and 657 stocks gained, 397 decreased and 359 were unchanged.

Australian corporate bankruptcies surged in the third quarter to September from a year ago by 18% to 2,961. The filings increased 11% from the previous quarter, according to the Australian Securities & Investment Commission.

In the first nine months, the number of companies in administration has increased 9.6% from the comparable period a year ago.

Stock Movers

BHP Billiton Ltd closed up $0.58 to $38.33 and Rio Tinto Ltd increased $0.98 to $70.75.

Newcrest Mining increased 81 cents to $36.87 and a day ago said it will issue US$1 billion of 10- and 30-year bonds to repay existing debt and fund new expansion projects.

Fortescue Metals Group increased 8 cents to $5.10, Lynas Corporation Limited closed up 4 cents to $1.19 and Iluka Resources rose 76 cents to $18.06.

Fortescue Metals at its annual general meeting indicated that the company may seek the reopening of the nickel mine that has been closed in Western Australia for 15 years.

An aboriginal corporation was denied from addressing shareholders and management at the company annual meeting.

Kingsgate Consolidated increased 7 cents to $7.02 after the mining companies said it increased its stake in Chile based Laguna Resources to 83.5% from 69.9%.

Oil Search Limited increased 17 cents to $6.56, Santos Limited rose 23 cents to $13.43 and Woodside Petroleum rose 50 cents to $36.70.

Cochlear Limited rose $0.70 to $52.70.

Commonwealth Bank of Australia closed up $0.28 to $49.96 and National Australia Bank increased 33 cents to $25.76. ANZ edged up 18 cents to $21.76. Westpac added 28 cent to $21.56.

David Jones Limited closed up 15 cents to $3.29 and Wesfarmers Limited increased 43 cents to $32.75. Harvey Norman increased 7 cents to $2.19.

Wesfarmers chief executive Richard Goyder said retail conditions are challenging and “we remain quite cautious on the near term.” He also added that spot prices for coal prices are on the decline since the second quarter and are likely to continue to drop.

Woolworths Limited increased 18 cent to $24.78 and James Hardie Industries SE increased 9 cents to $6.20.

Myer increased 6% to $2.48 after the retailer said fiscal first quarter sales declined but met expectations. The company retained the full-year outlook. Sales in the thirteen week period to October declined 3.5% to $681.4 million.

The retailer said comparable sales in first quarter declined 5.1% and said current fiscal year sales are expected to be flat and net to decline as much as 10% to $162.7 million.

Qantas Airways Ltd closed up 1 cent at $1.63, Virgin Blue closed unchanged at 38.5 cents but Flight Centre rose 20 cents to $20.

AirAsia plans to start a regional carrier that will compete with the Qantas’ regional network RedQ according to media reports in Malaysia.

Seven Group Holdings increased 20 cents to $7.78 after the media company said it estimated higher profit in the first half compared to a year ago.

News Corp increased 1.6% to $17.81 in New York trading and John Hartigan, chief executive and chairman of News Limited and will be replaced by Foxtel chief executive Kim Williams.