Australian Indexes Drop 1.9%, BHP at 7-Year Low

Marcus Jacob
09 Nov, 2015
New York City

Australian market indexes declined nearly 2% and resource sector led the losers. BHP dropped near a seven year low and Santos Ltd plans to raise as much as $3.5 billion in stock offering and asset sale to trim $9 billion of debt.

[R]5:30 PM Sydney, Australia – Australian market indexes declined nearly 2% and resource sector led the losers. BHP dropped near a seven year low and Santos Ltd plans to raise as much as $3.5 billion in stock offering and asset sale to trim $9 billion of debt.[/R]

Markets in Sydney opened lower after banks and mining stocks dropped and BHP declined to a seven-year low.

Santos agreed to sell 35% of stake in Victoria-based operation to Japan-based Mitsui & Co for $520 million and also plans to raise approx $3.5 billion through a stock offering and stock sale.

Australian dollar ease to 70.61 U.S. cents and in stock trading turnover slid to 704 million shares worth $5 billion.

At close, the ASX 200 Index declined 95.50 or 1.8% to 5,119.50 and the broader All Ordinaries Index slumped 89.40 to 5,180.30.

In commodities trading, gold dropped US$14 to US$1,094 an ounce and Brent crude future for immediate month delivery gained 88 cents to US$48.30 a barrel.

Australian Stock Movers

REA Group Limited slipped 0.6% to $48.88 after the online property advertiser forecasted revenue for the first-quarter to soar 21% to $146 million.

Separately, the company’s subsidiary Realestate.com.au agreed to acquire Malaysia-based iProperty Group Limited at the rate of $4 per share or $751 million.

Sankaty Advisors (Australia), Pty. Ltd, the independently managed credit affiliate of Bain Capital LLC agreed to acquire Australian commercial assets of GE Capital form the subsidiary GE for about $1.9 billion including debt.

Santos Ltd was halted at $5.91 after the oil and gas producer agreed to divest 35% of its stake in Victoria-based Kipper gas and condensate field business to Japan-based Mitsui & Co for about 45 billion yen or $520 million.

Separately, the oil and gas producer plans to raise approximately $3.5 billion through a stock offering and asset sales and appointed an industry veteran as a new chief executive.

In a separate placement the company also intends to sell shares to China-based private equity firm Hony Capital worth about $500 million.

As of June 30, Santos had total debt of about $9 billion.