Australia Keeps Rate on Hold at 2%, Suncorp Declares Special Dividend

Marcus Jacob
04 Aug, 2015
New York City

Reserve Bank of Australia left rates on hold at 2% and trade deficit widened in June. Australian retail sales increase in June accelerated from May. Suncorp Group declared a special dividend despite $1 billion natural hazard claims payments.

[R]5:30 PM Sydney, Australia – Reserve Bank of Australia left rates on hold at 2% and trade deficit widened in June. Australian retail sales increase in June accelerated from May. Suncorp Group declared a special dividend despite $1 billion natural hazard claims payments.[/R]

Reserve Bank of Australia left its key rate on hold and trade deficit widened in June and retail sales growth accelerated in the month.

The policy makers decided to leave the cash rate unchanged at 2%, the bank lowered the rates by 25 basis points each in February and May, the Reserve Bank of Australia reported today.

The seasonally adjusted trade deficit in June widened to $2.93 billion from the upwardly revised $2.68 billion deficit in May, the Australian Bureau of Statistics said.

Exports in the month jumped 3% to $26.35 billion from $25.52 billion in May and imports climbed 4% to $29.28 billion compared to $28.20 billion in the previous month.

Separately, the department added seasonally adjusted retail sales in June increased 0.7% to $24.35 billion followed by a rise of 0.4% in May and a relatively unchanged sales in April.

For the second-quarter, retail sales gained 0.8% to $70.30 billion from the previous quarter.

Australian dollar closed at 73.76 U.S. cents and in stock trading turnover slid to 837 million shares worth $5.3 billion.

At close, the ASX 200 Index gained 18.60 or 0.3% to 5,697.90 and the broader All Ordinaries Index increased 17.60 to 5,681.90.

In commodities trading, gold fell US$4 to US$1,089 an ounce and Brent crude rose 0.51 cents to close at US$50.03 a barrel.

Australian Stock Movers

Helloworld Ltd closed unchanged at 33 cents after the travel company forecasted operating profit in the range of $27 million to $28 million and pre-tax profit of $7 million.

The company also said it plans to write-down the non-cash impairment charge of about $205 million.

Origin Energy Ltd slipped 1.6% to $11.01 after the gas exploration company agreed to sell its entire 53.09% stake in a New Zealand-based Contact Energy Limited electricity generator-retailer and owner of gas distribution and LPG businesses for $3.05 or NZ$4.65 a share.

The transaction is expected to close on August 10.

Suncorp Group Ltd increased 1.5% to $14.55 after the general insurance company reported total revenues in the year ending in June jumped 2.1% to $16.72 billion form $16.37 billion in a year ago period.

Net profit in the year surged 55% to $1.14 billion compared to $737 million and diluted earnings per share increased to 87.21 cents from 57.11 cents in a year ago period.

The banking and life insurance group declared a special dividend despite paying out $1.07 billion in total net natural hazard claims.