Australian Dollar Lower; Spotless Receives $700 Million Bid

Marcus Jacob
16 Nov, 2011
New York City

Stocks in Australia lost momentum in the afternoon on the rising worries in the euro zone. Seasonally adjusted wages in the quarter to September increased 0.7%. BHP Billiton approved the investment in the development of the largest open iron ore mine in Western Australia.

[R]6:00 PM Sydney – Stocks in Australia lost momentum in the afternoon on the rising worries in the euro zone. Seasonally adjusted wages in the quarter to September increased 0.7%. BHP Billiton approved the investment in the development of the largest open iron ore mine in Western Australia.[/R]

Stocks in Sydney trading edged lower on the rising worries in the euro zone. The indexes opened higher but lost momentum as commodities struggled and the dollar edged to a one-month low.

The ASX 200 index fell 38.20 or 0.9% to 4,247.40 and All Ordinaries index decreased 0.9% or 37.7 to 4,313.80.

The Australian dollar eased to US$1.008 and edged down to parity and at its low in the month.

Seasonally adjusted private and public wages increased 0.7% in the quarter to September according to the latest released by the Australian Bureau of Statistics. Wages rose 0.9% in the previous quarter ending in June.

Adjusted wages increased 1.5% in Queensland followed by increase of 1.4% in Western Australia. South Australia and New South Wales wages gained 1.2% and Tasmania and ACT wages increased 1.3%. Wages in Victoria added 1%.

Stock Movers

Spotless closed down 4 cents to $2.35 after Pacific Equities Partners offered to take the cleaning, catering and painting services provider private for $700 million.

Two largest shareholders, Lazard controlling 9.7% and Orbis fund with 8.33% agreed to a conditional takeover and the two of founding families are also in a favor of the deal.

BHP Billiton Ltd closed down $0.23 to $36.65 and Rio Tinto Ltd decreased $0.18 to $67.65. Newcrest Mining decreased 50 cents to $36.55.

BHP Billiton approved the development of Orebody 24 iron ore mine in Western Australia and will invest its share of US$698 million in the venture.

The total investment in the largest single-pit-open cut iron ore mine in the world is US$822 million and will have a capacity of 17 million tons. Japanese partners, entities affiliated with Itochu and Mitusi, in the project are expected to contribute the rest.

Atlas Iron declined to $3.10 after the company acquired 90% stake in Corunna Downs project in Western Australia for $2.1 million.

Fortescue Metals Group decreased 7 cents to $4.82, Lynas Corporation Limited decreased 2 cents to $1.20 and Iluka Resources fell 58 cents to $17.11. Kingsgate Consolidated increased 4 cents to $6.90.

Uranium miner Paladin Energy decreased 3 cents to $1.63 and Peninsula Energy Ltd fell 4% to 4 cents. Extract Resources decreased 17 cents to $7.70.

Prime Minister Julia Gillard reversed her opposition to supply nuclear fuel to India after large mining companies struck to mining tax deal with the government earlier in summer. Since the tsunami led disaster in Japan in March, price of uranium fuel has plunged and from $73 a pound to $45 a pound before recovering above $52.

Oil Search Limited decreased 3 cents to $6.28, Santos Limited fell 30 cents to $13.11 and Woodside Petroleum closed down $1.10 to $35.50.

Brambles declined 9 cents to $6.87 and Cochlear Limited decreased $1.03 to $54.34.

County Coal fell 0.4 cent to 71 cents on the second day of trading after surging 32% on its debut in Australian trading. The U.S. based coal miner based in Wyoming plans to export coal to Asia.

Commonwealth Bank of Australia closed down $0.53 to $48.62 and National Australia Bank increased 9 cents to $24.61. ANZ edged down 23 cents to $20.47. Westpac fell 46 cents to $20.63.

David Jones Limited closed down 1 cent to $3.25 and Wesfarmers Limited closed down 50 cent to $32.32. Harvey Norman increased 1 cent to $2.17.

Woolworths Limited closed down 13 cents to $24.63 and James Hardie Industries SE decreased 12 cents to $6.08.

Ramsay Health Care Limited decreased 32 cents to $19.10 and yesterday the company reaffirmed its fiscal year earnings outlook for earnings.

Qantas Airways Ltd closed up at 6 cents to $1.71, Virgin Blue closed down 0.5 cent 38.5 cents but Flight Centre declined 7 cents to $20.

Qantas is set to finalize its agreement with three unions before the November 21 deadline set by the labor tribunal. Alan Joyce, chief executive of the company confirmed today that he was “optimistic” and the airline had talks over the past two weeks with the unions representing engineers, pilots and baggage handlers.