Another Sell-off in Commodities Dents Australian Stocks

Marcus Jacob
24 Nov, 2015
New York City

Declining commodity prices led to a broad sell-off in mining and materials stocks. Billabong tumbled due to weak results and market outlook. Carlyle and TPG plan to sell their entire stake of 18% in Healthscope.

[R]5:30 PM Sydney, Australia – Declining commodity prices led to a broad sell-off in mining and materials stocks. Billabong tumbled due to weak results and market outlook. Carlyle and TPG plan to sell their entire stake of 18% in Healthscope.[/R]

Market indexes in Sydney dropped on Tuesday after another selloff in commodities dragged resource stocks.

Iron ore prices continued to decline after hitting new six-year lows on Monday amid talks about declining demand from China steel factories, producers of approximately half of the global steel output.

BHP fell 1.8% to $19.71; Rio Tinto lost 1.5% to $47.42, while Fortescue Metals Group declined 3.2% to $2.11.

Billabong tumbled due to disappointing results for the first four month of the year and Carlyle and TPG plan to sell their entire stake of 18% in Healthscope.

Transurban agreed to acquire the Brisbane AirportLinkM7 toll road for about $1.87 billion.

The Australian dollar eased to 72.01 U.S. cents, while in stock trading turnover reached 1.08 billion shares worth $5.4 billion.

At the close, the ASX 200 Index slipped 50 or 0.9% to 5,226.40 and the broader All Ordinaries Index decreased 49.50 to 5,277.

In commodities trading, gold added US$1 to US$1,072 an ounce and Brent crude future for immediate month delivery edged up 21 cents to US$46.04 a barrel.

Australian Stock Movers

Billabong International Limited tumbled 22.9% to 54 cents after the surf-wear retailer said the weak

Australian dollar and the lackluster skateboard market in North America dented earnings in the first four months of fiscal 2016.

Healthscope Ltd plunged 6.7% to $2.64 after the U.S.-based private equity firms Carlyle Group and TPG Capital Management unveiled plans to sell their entire stake of 17.8% in the healthcare company for about $612 million.

Carlyle and TPG offered 308.2 million shares at $2.77 per share.

IPH Ltd closed at $7.90 after the intellectual property services provider announced plans to issue new stock and raise $60 million.

The company plans to use net proceeds to reduce debt and strengthen the balance sheet for the next phase of acquisitions.

TechnologyOne Limited announced record revenues for the twelfth consecutive year due to an increase in license fees and its cloud business.

The enterprise software company reported growth of 16% in net profit before tax to $46.5 million for the year ended September 2015.

The stock closed at $4.03, a gain of 0.5% for the day.

Transurban Group reached $10.32 after the toll roads operator agreed to acquire the Brisbane AirportLinkM7 toll road for about $1.87 billion.

The company owns six assets, including three assets adjacent to the Airport in Queensland.