Australian Banks Under Pressure; BHP Billiton Turns Cautious

Marcus Jacob
17 Nov, 2011
New York City

Stocks in Sydney trading gained and the dollar traded near parity with the U.S. currency. BHP Billiton struck a cautious note at the annual general meeting and said recent iron ore price softness is temporary. The mining giant also confirmed the $80 billion capital expenditure plan to 2015.

[R]6:00 PM Sydney – Stocks in Sydney trading gained and the dollar traded near parity with the U.S. currency. BHP Billiton struck a cautious note at the annual general meeting and said recent iron ore price softness is temporary. The mining giant also confirmed the $80 billion capital expenditure plan to 2015.[/R]

The ASX 200 index rose 10.80 or 0.25% to 4,258.20 and All Ordinaries index increased 0.3% or 10.3 to 4,324.10.

The Australian dollar gained a fraction to US$1.014 and traded as low as US$1.0021 and at its intra-day low in the month.

In trading, stock turnover increased to 1.77 billion shares worth $3.89 billion with 504 stocks closing higher, 477 declining and 369 unchanged.

Stock Movers

Spotless closed up 4 cents to $2.39 after the company rejected an offer from Pacific Equities Partners offer 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 rose $0.39 to $37.04 and Rio Tinto Ltd increased $0.42 to $68.07. Newcrest Mining increased 7 cents to $36.62.

Chief Executive Marius Kloppers of BHP Billiton at the annual general meeting said that short term economic uncertainty and equity market volatility will create “challenges” for the company. However, the company is large and diversified enough to handle the trading conditions.

The company also completed the sale of $3 billion in bond sale but did not say what the yield was. Chairman Jacque Nasser reaffirmed that the company plans to spend $80 billion in five years to 2015.

According to a Ticker.com survey, analysts estimate of earnings in the current fiscal year to improve 7% to $23 billion.

Fortescue Metals Group increased 9 cents to $4.91, Lynas Corporation Limited increased 4 cents to $1.25 and Iluka Resources fell 1 cent to $17.10. Kingsgate Consolidated decreased 9 cents to $6.81.

BluScope Steel declined 2 cents to 69 cents after the compensation committee defended the decision to pay out $3 billion in bonuses in a year when the company lost $1 billion.

Uranium miner Paladin Energy decreased 5 cents to $1.58 and Peninsula Energy Ltd rose 2% to 4.6 cents. Extract Resources increased 3 cents to $7.73.

Oil Search Limited increased 6 cents to $6.34, Santos Limited rose 3 cents to $13.14 and Woodside Petroleum closed down 27 cents to $35.23.

Santos said it withdrew a bid to build a coal-seam-gas pipeline in the central west region of NSW.

Brambles declined 6 cents to $6.81 and Cochlear Limited increased $1.16 to $55.50.

Commonwealth Bank of Australia closed down 1 cent to $48.61 and National Australia Bank decreased 27 cents to $24.34. ANZ edged up 11 cents to $20.58. Westpac gained 22 cents to $20.85.

David Jones Limited closed down 7 cent to $3.18 and Wesfarmers Limited closed up 4 cent to $32.36. Harvey Norman decreased 1 cent to $2.16.

Woolworths Limited closed up 21 cents to $24.84 and James Hardie Industries SE increased 40 cents to $6.48.

James Hardie also said it returned to profitability in the fiscal first half of 2012 and reaffirmed its full-year earnings outlook.

Ramsay Health Care Limited decreased 11 cents to $18.99.

Qantas Airways Ltd closed down 1 cent to $1.69, Virgin Blue closed down 1 cent 37.5 cents but Flight Centre declined 3 cents to $19.97.