Australian Dollar Sinks Ahead of Uridashi Bonds Rollover

Marcus Jacob
24 May, 2012
New York City

Australian stocks eased as resource prices fell and crude oil declined below $90 a barrel. Qantas plans to add 90,000 new seats capacity in the next two months mostly on the domestic routes. Australian dollar traded at a six month low as bonds floated in Japan are scheduled for a rollover this week.

[R]8:00 PM Sydney – Australian stocks eased as resource prices fell and crude oil declined below $90 a barrel. Qantas plans to add 90,000 new seats capacity in the next two months mostly on the domestic routes. Australian dollar traded at a six month low as bonds floated in Japan are scheduled for a rollover this week.[/R]

Australian stocks fell as investors were caught in the growing political uncertainties in the euro zone and manufacturing shrank for the seventh month in a row in China.

The ASX 200 index fell 11.20 to 4,055.80 and All Ordinaries index decreased 12.58 to 4,106.21.

In stock trading, turnover decreased to 1.5 billion shares worth $3.9 billion and 386 shares gained, 555 decreased and 358 closed unchanged.

The Australian dollar traded near the low of the year at 97.60 U.S. cents and investors focus on the upcoming redemption of $600 million of uridashi bonds sold to retail investors in Japan. The bonds are likely to be rolled over this Friday but uncertainty looms as the size of the roll over.

Stock Movers

David Jones Limited rose 3 cents to $2.20, Harvey Norman Holdings closed down 1 cent to $1.93 and Woolworths increased 18 cents to $26.90.

David Jones dropped to the low last seen in March 2009 after Myer reported weak results.

Myer unchanged to $2 after the retailer said third quarter ending in April sales declined 0.9% to $651.1 million and comparable sales in the quarter declined 2.1% from a year ago period.

The retailer also estimated full year profit to decline 15% from a year ago profit of $162.7 million.

Kathmandu fell 1 cent to $1.20. Billabong International Limited slipped 5 cents to $2.06.

BHP Billiton gained 6 cents to $31.99 and the resource company completed the 2 billion euro of bond offering in two parts.

The mining completed its offering after three years of hiatus from the market and sold 1.25 billion euro bonds due in November 2018 and were priced to yield 65 basis points higher than the benchmark swap rate and 750 million euros of May 2024 priced at 100 basis points premium.

Rio Tinto closed up 8 cents to $56.36 after the company said it plans to go ahead to double its mining capacity by 2016 despite the brewing crisis in the euro zone and expected slowdown in imports from China.

Lynas Corporation Limited edged up 1 cent to 88 cents and Iluka Resources declined 69 cents to $12.56. Newcrest Mining gained 16 cents to $24.90 and Kingsgate decreased 4 cents to $4.96.

Oil Search Limited fell 3 cents to $6.80 and Santos Limited slumped 16 cents to $11.92. Orica shrank 19 cents to $25.35.

Commonwealth Bank of Australia slides 12 cents to $49.31 and Bank of Queensland slipped 8 cents to $6.28. ANZ declined 18 cents to $20.47. National Australia Bank decreased 21 cents to $23.48 and Westpac Banking Corporation closed down at 8 cents to $20.39.

Brambles dropped 1.7% to $6.72 and closed at a two-month low after the company said a day ago it has not found a buyer for its information management unit.

Stockland closed down at 5 cents to $3.15, Leighton advanced 31 cents to $17.86 and Toll Holdings rose 3 cents to $4.39.

Qantas closed up 0.5 cent to $1.47 and the international air carrier said it will increase its capacity by 90,000 seats by July and primarily focus on domestic routes from Sydney to Brisbane and to Melbourne.

Virgin Australia edged down 5 cents to 41.5 cents and Flight Centre increased 6 cents to $18.45.

QR National rose 1 cent to $3.33.