Australian Indexes in 4-Day Slump, Rio Tinto to Buy Back Shares

Marcus Jacob
12 Feb, 2015
New York City

Australian market indexes extended losses to the fourth day in a row and the Aussie dollar edged lower. Jobless rate in January rose more than expected to 6.4%. ASX first-half revenues and earnings were ahead of expectations. Rio Tinto to use up to $500 million to buy back its shares.

[R]5:30 PM Sydney – Australian market indexes extended losses to the fourth day in a row and the Aussie dollar edged lower. Jobless rate in January rose more than expected to 6.4%. ASX first-half revenues and earnings were ahead of expectations. Rio Tinto to use up to $500 million to buy back its shares.[/R]

Market indexes in Sydney extended losses to the fourth day in a row and the Aussie dollar edged lower after jobless rate rose more than expected.

Seasonally adjusted unemployment rate in January jumped to 6.4% from 6.1% in December, the Australian Bureau of Statistics announced today.

The department added the Australian economy eliminated 12,200 jobs in January to 11.66 million.

A separate private survey showed consumer price expectation for February climbed 0.8 percentage point to 4%, the Melbourne Institute said today.

Australian dollar closed at 76.51 U.S. cents and in stock-trading turnover jumped to 996 million shares worth $6.76 billion.

ASX 200 Index slipped 25.50 or 0.4% to 5,743.60 and broader All Ordinaries Index fell 24 to 5,707.70.

In commodities trading, gold declined US$17 to US$1,221 an ounce and light crude oil dropped $1.15 to US$49.78 a barrel.

Brent crude gained 49 cents to close at US$55.15 a barrel.

IPO

US Residential Fund, the investment fund in the U.S. property priced its public offering at $1 a share and the stock opened at $1.03 and a closed at 95 cents.

Australian Stock Movers

ASX Limited slipped 1.2% to $39.65 after the trading exchange operator reported revenues in the first-half ending in December climbed 5.9% to $348.7 million from $329.3 million a year ago period.

Profit in the period jumped 4.7% to $198.6 million compared to $189.6 million and diluted earnings per share increased to 102.7 cents from 98.3 cents in the same period a year ago.

ASX announced plans to invest approx $35 million to upgrade its technology in the next two years.

For the year, the company declared fully franked interim dividend of 92.3 cents per share, higher than the 88.2 cents from a year ago period.

ASX forecasted earning per share for the fiscal 2015 of about 203.8 cents and dividend of 183.5 cents per share.

Mirvac Group closed unchanged at $2.11 after the property developer said total revenues in the first-half ending in December jumped 4.7% to $909 million from $868.6 million a year ago period.

Profit for the period soared 13% to $279 million compared to $246.1 million and diluted earnings per share jumped to 7.55 cents from 6.71 cents in the same period a year ago.

Mirvac lowered earnings per share guidance for the fiscal 2015 in the range of 12.2 cents to 12.3 cents.

Rio Tinto Limited rose 0.2% to $59.90 after the second largest iron ore and resource company in Australia reported group revenues in the year ending in December declined 6.8% to US$47.66 billion from US$51.17 billion a year ago period.

Net profit in the year surged 78.4% to US$6.53 billion compared to $3.66 billion and diluted earnings per share climbed to 351.2 cents from 197.3 cents in the same period a year ago.

Separately, the mining company plans to conduct buy-back tender under proposed US$2 billion capital return program and repurchase A$500 million of shares.

Rio Tinto said net debt at the end of year decreased to US$12.5 billion from US$18.1 billion in December 2013 while adjusted total borrowings at December 2014 were US$24.9 billion.

Telstra Corporation Limited fell 0.6% to $6.45 after the telecommunications and information service provider said revenues in the first-half year ending in December rose 0.6% to $12.64 billion from $12.56 billion a year ago period.

Net profit in the period surged 22.4% to $2.09 billion compared to $1.70 billion and diluted earnings per share jumped to 16.7 cents from 15.5 cents in the same period a year ago.

The company said mobile sales in the period soared 10% $5.33 billion, and registered new customers of about 366,000, the largest jump in three years in Australia.

Telstra’s market share increased to more than two-thirds of the country''s 23.6 million users.

Telstra''s guided “broadly flat” income and EBITDA for fiscal 2015 and expects free cash flow between $4.6 billion and $5.1 billion and capital expenditure to be around 14% of sales.