ANZ to Raise $3 Billion, Rio Tinto Net Plunges 82%

Marcus Jacob
06 Aug, 2015
New York City

Banks in Australia led decliners and the ASX 200 index fell more than 1% after ANZ said it plans to raise more than $3 billion. Downer EDI plunged more than 11% after weak quarterly results. Rio Tinto net profit tumbled 82% on weak commodities prices.

[R]5:30 PM Sydney, Australia – Banks in Australia led decliners and the ASX 200 index fell more than 1% after ANZ said it plans to raise more than $3 billion. Downer EDI plunged more than 11% after weak quarterly results. Rio Tinto net profit tumbled 82% on weak commodities prices.[/R]

Australian market indexes dropped more than 1% and banks and commodities linked stocks led decliners are ANZ announced a secondary offering.

The seasonally adjusted unemployment rate increased 6.3% in July following upwardly revised 6% rate in June.

The seasonally adjusted number of people unemployed increased by 40,100 to 800,700 in July.

Australian dollar closed at 73.34 U.S. cents and in stock trading turnover declined to 639 million shares worth $4.4 billion.

At close, the ASX 200 Index dropped 63.90 or 1.1% to 5,610.10 and the broader All Ordinaries Index slumped 59.40 to 5,600.10.

In commodities trading, gold was flat at US$1,087 an ounce and Brent crude edged down 0.05 cents to close at US$49.54 a barrel.

Australian Stock Movers

Australia and New Zealand Banking Group was halted at $32.58 and the bank plans to raise $3 billion in capital following moves by regulators on capital levels.

And the bank said provisions for bad and doubtful debts are increased in the resources and agriculture sectors.

The bank plans to issue up to $2.5 billion of new shares to institutional investors at a discounted price of $30.95 per share and raise additional $500 million through a share purchase plan.

However, the bank said cash profit in the nine-months ending June jumped 4.3% to $5.40 billion from $5.18 billion in a year ago period.

Downer EDI Limited tumbled 11.4% to $4.06 after the engineering construction services provider reported revenues in the year ending in June declined 3.9% to $7.43 billion form $7.73 billion in a year ago period.

Net profit in the year dropped 2.7% to $210.2 million compared to $216 million and diluted earnings per share decreased to 44.9 cents from 46 cents in a year ago period.

For the fiscal 2016, Downer forecasted net profit of around $190 million.

Finbar Group Limited closed unchanged at $1.27 after the property developer received development approval to starts former Port Hedland Hospital site into an apartment project worth about $390 million.

Kathmandu Holdings Ltd surged 8.9% to $1.64 after the New Zealand-based outdoor goods retailer rejected a hostile cash-and-stock offer of about $318 million from Briscoe Group Limited.

Separately, Kathmandu said sales in the year ending in July jumped 4.2% to NZ$409.4 million from NZ$392.9 million in a year ago period.

Net profit in the year tumbled 52.6% to NZ$20 million compared to NZ$42.2 million in a year ago period.

Kathmandu forecasted sales growth in fiscal 2016 to climb 11% to NZ$454.6 million and operating profit to soar 43% to NZ$48.2 million.

Rio Tinto Limited gained 1.1% to $53.55 after the mining company reported revenues in the first-half ending in June plunged 26.1% to $17.98 billion form $24.34 billion in a year ago period.

Net profit in the year tumbled 81.7% to $806 million compared to $4.40 billion and diluted earnings per share slumped to 43.5 cents from 237 cents in a year ago period.

Rio said profit in iron ore segment plunged 55% to US$2.1 billion and coal and copper profit plummeted 40% to US$ 393 million and profit fell 1% to US$ 75 million in diamonds and minerals business while profit more than doubled to US$793 million in aluminium segment.