Australia Gains as Makets Rise in Asia

123jump.com Staff
29 Nov, 2007
New York City

Australian stocks edged higher after enthusiastic investors lifted stocks across Asia. ASX 200 index jumped 1.2% or 74.40 to close at 6,370 on the hopes that interest rates may be lowered in the U.S. at the next meeting of the Fed. Resource, banks, and retail stocks led the gainers. National Australian Bank announced that it may acquire Great Western Bancorp based in South Dakota. BlueScope Steel jumped 4% after it laid plans to restructure its China operations.

[R]3:00AM New York, 7:00PM Sydney - The Australia index gained 1.2% after positive trade led by banks.[/R]

ASX 200 index gained 1.2% or 74.4 to close at 6,370.10. Australia and New Zealand Bank added 0.5% and Commonwealth Bank of Australia edged higher 1.1%.

National Australia Bank announced that it is exploring to acquire Great Western Bancorporation, for A$898.5 million. The bank, the subsidiary of the U.S. based Great Western Bank, a regional bank based in Sioux Falls, South Dakota.

The U.S. bank has a network of more than 100 branches across six states, mostly in the mid-west agricultural region and employs around 800 people with more than $3.4 billion.

Stewart said his company intended to use the acquisition as a springboard to accelerate the organic growth strategy for their agribusiness relationship-banking model into the U.S.A.

The Bank is also active in the commercial lending, wealth management distribution and insurance agency sectors. The Hamann family has owned great Western Bancorporation for more than 35 years.

Stewart said the Great Western Bank would become a part of NAB''s development and new business division managed by George Frazis.

BlueScope Steel jumped nearly 4.4% after the management made presentation to analysts.

Paul O''Malley, who took over as CEO on the November 1st outlined several new initiatives and outlined three year strategy and restructuring of businesses in China and Vietnam.

BlueScope Steel is likely to sell its underperforming metallic coating business in China and is reviewing the future of its Vietnamese operation. O''Malley said today the Suzhou metal coating facility in China was performing well but would struggle to break-even.

O''Malley said the company was committed to China, where it also operates a building division, but the company is looking to sell metal coating business. O''Malley said margins were coming under pressure from the high price of raw materials.

Elsewhere, BlueScope said it Vietnamese operation, which manufacturers coated and pre-painted products for the construction market, would also be reviewed.

BlueScope Steel also announced the appointment of Charlie Elias as Chief Financial Officer.

Rio Tinto chief executive Tom Albanese is visiting Australia where he will meet investors over the next two days. Rio has continued to fend off advances from BHP Billiton.

Rio Tinto has already knocked back a merger proposal of three BHP Billiton shares for one Rio Tinto share, which is valued at about $128 billion (or A$144.12 billion). Albanese has been engaging United Kingdom, Australia and the United States to gather support for its growth plan and stay independent.

On Monday night, Rio Tinto laid out aggressive plan to expand its iron ore operations, develop new copper and nickel mines, and increase dividend and assets sales.

Yesterday, BHP Billiton chief executive Marius Kloppers said he had met about half of both companies'' shareholders on the company''s recent investor road show and was encouraged by investors responses.

A merger between the two companies would create a world dominant player in coal, iron ore, copper, aluminum, with annual earnings of $30 billion (or A$33.78 billion).

The Australian dollar closed higher today and closed at 88 America cents during the local trading, as stronger U.S. financial markets boosted risk appetite. At the close, the Australian dollar was trading at 0.8828/34, up from yesterday''s close of 0.8757/62.

Of the ASX 200 index shares, Hills Industries led the gainers with a rise of 7.5% followed by increases in Straits Resources Limited of 7.1%, in Perilya and Macquarie Infrastructure of 6.8%, and in Spotless Group of 6%.

Of the ASX 200 index stocks SP Ausnet led the decliners with a fall of 3.3% followed by losses in Transfield Services of 3.5%, Tishman Speyer by 3.7%, in Murchison Metals by 4.7%, and 8.3% in AED Oil Limited.

Among other active stocks, BHP Billiton was up 1.7% while its takeover target Rio Tinto gained 3.2%. In the banking sector National Australia Bank was down 0.8% and Westpac lost 0.1%.

Energy stocks were mostly higher despite crude oil futures shedding 4% overnight, Santos added 1.8%, Oil Search gained 0.7%, and Woodside Petroleum declined 1%.

The retail sector closed stronger, Woolworths added 2.8%, Wesfarmers was up 0.2% and Harvey Norman gained 3.3%. Shares in luxury retailer David Jones were 1.2% stronger after the retailer pointed to a favorable profit outlook.

In other headlines today, Qantas closed down 1.4% after the news that New Zealand''s competition watchdog was investigating carriers including Qantas over allegations of price-fixing air cargo fuel surcharges.

The media sector closed stronger, News Corporation surged 2.3% or 67 cents to $23.39, Fairfax added 0.6% and Publishing and Broadcasting increased 2.9%.