Australian Stocks Higher; ANZ Lifts Rates, NAB Cuts Jobs

Marcus Jacob
13 Feb, 2012
New York City

Australian stocks traded higher on the hopes that Greek Parliament approval will contain the debt contagion in Europe. ANZ was the latest bank to break ranks with the RBA and increase rates and NAB announced job cuts but failed to trim executive salaries and bonuses.

[R]8:00 PM Sydney – Australian stocks traded higher on the hopes that Greek Parliament approval will contain the debt contagion in Europe. ANZ was the latest bank to break ranks with the RBA and increase rates and NAB announced job cuts but failed to trim executive salaries and bonuses.[/R]

Australian stocks edged higher and National Australian Bank joined two other banks to increase mortgage rate despite Reserve Bank of Australia left its key rate on hold last week.

Four largest banks have blamed the rise in international cost of funding and have been the drive to eliminate jobs despite record $24 billion in 2011 and have shied away from trimming executive salaries and bonuses when it comes to preserving margins.

The ASX 200 index increased 39.8 or 0.9% to 4,285.1 and All Ordinaries index rose 36.8 or 0.9% to 4,359.4.

Investors were also optimistic after Greek Parliament passed austerity measures after a divisive debate and violent protests on streets in Athens. The approved measures will pave the way for second bailout from the euro zone but Greek debt is still expected to hover near 160% of its gross domestic product for the rest of the decade.

Stock Movers

BHP Billiton Ltd rose 36 cents to $36.66 and Rio Tinto Ltd closed added 45 cents to $70.43.

Fortescue Metals Group increased 26 cents to $5.50, Lynas Corporation Limited closed lower 3 cents to $1.36 and Iluka Resources increased 6 cents to $17.80. Newcrest Mining added $1.09 to $35.10.

Oil Search Limited increased 8 cents to $6.60, Santos Limited gained 8 cents at $13.97 and Woodside Petroleum added 18 cents to $35.58.

Commonwealth Bank of Australia increased 41 cents to $50.29 and ANZ added 35 cents to $21.77 and Westpac inched higher 30 cents to $21.15.

National Australia Bank rose 32 cents to $23.26 and the company joined other banks in increasing mortgage rates despite the RBA leaving the rates on hold. NAB will lift standard variable rate by 9 basis points to 7.31% following the 10 basis point increase by Westpac to 7.46% and 6 basis point rise by ANZ to 7.36%.

ANZ said it will cut 1,000 permanent jobs from its middle management, support and back office functions in the fiscal 2012 and most of cuts are expected at its head office in Melbourne. Earlier in January the bank said it will cut 130 jobs from its 24,000 staff.

Four largest banks are on the job cuts drive despite these banks reported record $24.3 billion in profit last year. In the year so far, 2,000 jobs cuts have been announced in the name of preserving margins but none of the executive salaries are cut. In fact, management bonuses increased at the four largest banks to a record high in 2011.

David Jones Limited closed unchanged at $2.50 and Harvey Norman Holdings closed up 1 cent to $2.07. Wesfarmers Limited rose 34 cents to $29.69. James Hardie added 2 cents to $7.24.

Qantas Airways Ltd closed unchanged at $1.58, Virgin Australia added 0.5 cent to 36 cents and Flight Centre increased 29 cents to $21.03.

QR National closed down 1 cent to $3.80.