Weakness in Oil and Yuan Weighs on Australian Dollar and Stocks

Marcus Jacob
07 Dec, 2015
New York City

ASX 200 recorded marginal gains after the decline of oil prices dragged down energy stocks. Broadspectrum surged 48% after the Spain-based infrastructure group Ferrovial launched a hostile takeover bid worth $715 million. Graphitecorp tumbled 13% on its trading debut.

[R]5:30 PM Sydney, Australia – ASX 200 recorded marginal gains after the decline of oil prices dragged down energy stocks. Broadspectrum surged 48% after the Spain-based infrastructure group Ferrovial launched a hostile takeover bid worth $715 million. Graphitecorp tumbled 13% on its trading debut.[/R]

Stocks in Sydney closed little changed as the positive U.S. jobs report was offset by weakness in energy stocks.

Shares of oil companies fell due to a slump in crude oil prices as OPEC, the Organization of the Petroleum Exporting Countries, kept the current oil output levels.

The latest accord among oil cartel nations comes despite the rising glut in the oil market and supply in the U.S. continues to ratchet up despite the spot price of crude oil trading at a low for the year.

Graphitecorp tumbled on its trading debut, while Broadspectrum surged on receipt of takeover offer from Spain-based Ferrovial.

Cimic Group won a $760 million contract to operate Glencore’s Mt Owen Coal Mine of the Hunter Valley, New South Wales.

The Australian dollar slid to 73.31 U.S. cents and in stock trading turnover fell to 797 million shares worth $4.2 billion.

The Aussie dollar traded down for a while in the session today, after the People’s Bank of China lowered the benchmark rate by 0.21% to 6.399 to the U.S. dollar.

At the market close, the ASX 200 Index edged up 4.10 to 5,155.70, while the broader All Ordinaries Index added 4.40 to 5,205.90.

In commodities trading, gold soared US$23 to US$1,085 an ounce and Brent crude future for immediate month delivery slid 41 cents to US$39.56 a barrel.

IPO

Graphitecorp Limited plunged 12.6% to $1.84 after the residential real estate developer priced its stock at $2.10.

The stock opened at $1.94 cents and closed at $1.83.

Updater Inc soared 72.5% to 22 cents after the information technology provider priced its stock at 20 cents.

The stock opened at 36 cents and closed at 34.5 cents.

Australian Stock Movers

Broadspectrum Ltd surged 47.7% to $1.25 after the industrial maintenance and construction services provider received a takeover bid from Spain-based transportation infrastructure provider for $1.35 per share, or about $715 million in cash, direct to shareholders.

A year ago the company had rejected an offer made by Ferrovial SA for $2 per share, or a total of $1 billion.

Cimic Group Ltd gained 0.3% to $24.47 after the company’s mining contractor Theiss was awarded a $760 million contract to operate Glencore’s Mt Owen Coal Mine of the Hunter Valley, New South Wales.

Dexus Property Group gained 1.1% to $7.73 after the real estate developer offered to buy its rival Investa Office Fund for $2.5 billion in cash and stock.

Dexus offered 0.424 of its securities and 82 cents in cash for each IOF share.

Shares of IOF jumped 7.31% to $4.11 on the news that the board of the company intends unanimously recommend the offer.

The deal will allow Dexus to expand its assets under management to $23.4 billion and to add 450 new clients.

News Corp jumped 2.5% to $19.67 after the media company agreed to acquire a 25% stake in Hipages, an online space for property and home service jobs.

The Sydney-based startup helps people to find and hire plumbers, electricians, painters and builders and screen businesses through user reviews.

""The investment is part of a wider plan to develop and grow the property and home services category in Australia,"" said Peter Tonagh from News Corp Australia.