Australian Stocks Ease, QBE Insurance Plunges 22%

Marcus Jacob
09 Dec, 2013
New York City

Australian stocks traded lower but market indexes in Asia gained. QBE Insurance plunged 22% after the company issued a second profit warning and said Chairman Belinda Hutchison has resigned. TPG Telecom soared 14% after the telecom company agreed to a $450 million deal with New Zealand Telecom.

[R]4:30 PM Sydney – Australian stocks traded lower but market indexes in Asia gained. QBE Insurance plunged 22% after the company issued a second profit warning and said Chairman Belinda Hutchison has resigned. TPG Telecom soared 14% after the telecom company agreed to a $450 million deal with New Zealand Telecom.[/R]

Stocks in Sydney traded lower and financial services and insurance stocks were in focus after QBE issued a profit warning.

Australian dollar increased to 91.07 U.S. cents. Stock trading turnover declined to 723 million shares worth $4.5 billion.

The ASX 200 index dropped 41.60 or 0.8% to close at 5,144.40 and the broader All Ordinaries slipped 37.60 to 5,148.40.

Stocks in Review

Rio Tinto climbed 41 cents to $65.41. BHP fell 3 cents to $36.75.

Woodside Petroleum Limited gained 25 cents to $37.56 after it awarded new exploration permits offshore New Zealand.

Westpac rose 2 cents to $32.51.

Amcor Limited closed unchanged at $11.04.after the packaging company confirmed in a today’s meeting shareholders voted to split of Orora Limited effective December 3.

Australasian Wealth Investments Limited closed unchanged at 51.5 cents after the closed-end fund plans to acquire YourShare for $10.5 million and pay extra $2 million in cash after the acquisition complete.

Brambles Limited slipped 1.1% to $9.28 after the pooling solution provider left its profit guidance for the year unrevised in the range of $930 million to $965 million.

Metcash Limited soared 4.3% to $3.15 and the grocery wholesaler separated its food and grocery business into two, in less than two years after it merged two operations.

Metcash reported revenue in the first-half ending in October jumped 4.9% to $6.64 billion and net profit surged 20.6% to $98.9 million.

Oil Search Limited slid 1.7% to $8.14 after the oil and gas explorer confirmed it is talk to sale of its interest in a Papua New Guinea petroleum licence but not yet made any conclusions.

PanAust Limited fell 2.7% to $1.62 after the miner forecasted its full year pre-tax earnings EBITDA likely to fall between $260 million and $300 million.

Qantas Airways Limited declined 3.4% to 99.5 cent and the budget airline Jetstar controlled by the company plans to close its hub in Darwin and trim several routes from the city as it faces stiff competition.

QBE Insurance Group Limited plummeted 22.3% to $12 after the insurer forecasted full-year loss of $250 million on the write-downs at its North American operations.

The company admitted its expansion in the United States was too early and said Chairman Belinda Hutchison has departed the company.

QBE expects a gross written premium for this year of $17.8 billion; North America accounted for about 29% of total premium and the insurer forecasted profit margin of about 6% for 2013 and estimated 10% in fiscal 2014.

Telecom Corp of New Zealand gained 1.9% to $2.11 after the telecommunication company agreed to sell its Australian AAPT unit for $450 million to internet service provider, TPG Telecom Ltd.

The deal is expected to be complete by February 2014 and the company plans to use proceeds to reduce its debt.

Shares of TPG Telecom Limited soared 13.6% to $4.68.