Centro Properties Sale Likely, ASX May Fall

123jump.com Staff
02 Jan, 2008
New York City

ASX 200 Index edged higher on a weak rise in metal and mining stocks. ASX 200 gained 0.2 to close at 6,353.20. BHP and Rio Tinto edged higher. centro, the troubled mall operators and financial services company edged higher after the company said that several bidders are interested in company assets. Lion Nathan received government approval to purchase Tasmania based brewer J Boag. Felix Resources agreed to sell utilities led by Korea Electric Power 10% of the company.

[R]5:00AM New York, 9:00PM Sydney – Australian stocks edged higher on talks of takeover and asset sales.[/R]

ASX 200 index gained 0.2 to close at 6,353.20.

The Preliminary market turnover was 468 million, worth $902.9 million with 464 stocks moving up, 381 moving down, and 316 unchanged.

The most actively traded stock was Flinders Diamonds with 89.7 million shares changing hands worth $12.45 million.

BHP Billiton added 0.4% and Rio Tinto was up 0.04%.

Centro Properties Group''s share rose 3% today after the group said that several groups are interested in its assets. Chairman Brian Healey said that the group was widening the scope to invite other parties into discussions. He said expressions would be sought for a `whole of group review'' including recapitalization, equity issuance or sale of Centro.

Centro last month indicated that it is willing to sell all its assets including its 700 malls in the United State as it struggles to raise money to refinance its A$3.9 billion ($3.4 billion) of debt. It has up to February 15 to refinance the debt. The Group also invited bids for stakes in his Australian and U.S. wholesale funds, which Centro values at a combined $3.7 billion.

Lion Nathan today announced that it has received clearance from the Australian Foreign Investment Review Board (FIRB) for its A$325 million ($286 million) purchase of Tasmanian brewer J. Boag & Son Pty Limited (Boag) from Philippines based San Miguel Corporation.

Lion Nathan also announced that Foster''s Group Limited has agreed to complete the sales of Boag mainland Australia distribution from June 2008 to January 2008.

Boag will pay Foster''s $6.4 million for the early termination of the distribution agreement and Lion Nathan will assume control of Boag mainland distribution in mid-January.

Felix Resources Ltd today indicated that South Korea''s biggest power producer, Korea Electric Power Corporation and partners have agreed to pay $90 million (US$79 million) for 10% of its coal project in Australia.

According to a letter from Felix Resources Ltd to its shareholders, the South Korean investors will also pay for 10% of the development costs for the Moolarben project in New South Wales State.

In addition the Korean investors also agreed to negotiate to buy at least 2.8 million metric tons of coal a year for the life of the mine, which has approval to produce as much as 10 million tons annually.

Apart from the Korea Resources Corporation, the other members of the group include four of Korea Electric''s units. South Korea is boosting investments overseas as competition with China, Japan and India for raw materials intensifies. The Asian country imports almost all its energy and minerals needs,

Xstrata Plc today announced that the proposed $2 billion copper and gold mine was attacked by communist rebels yesterday. Xstrata''s spokesman Roy Antonio said New People''s Army, the military arm of the Communist Party of the Philippines, attacked an army detachment outside the mine at 4 a.m. local time before entering the property and burning some buildings. No one was injured in the attack.

The Xastra controlled mine is the largest mining project underway in the Philippines and its attack could hurt the government''s attempt to lure more investors. Xstrata with 62.5% and Australia''s Indophil Resources Ltd with 34.1% jointly own the project. Indophil fell 3.6%.
The Australian dollar closed at $0.8797/00, down from Monday''s close of $0.8816/20. During the day, the domestic currency traded between a low of $0.8758 and a high of $0.8807.

Of the ASX 200 index shares, Fortescue Metals led the gainers with a rise of 8% followed by increases in APN News & Media of 5.7%, in Centro Retail Group of 5.3%, in AED Oil Limited of 4.5%, and in Seek Limited of 3.5%.

Of the ASX 200 index stocks Macquarie DDR led the decliners with a fall of 3.9% followed by losses in Flight Centre of 2.9%, in Bradken of 2.7%, in Bunnings Warehouse of 2.6 and in Sino Gold mining of 2.5%.

In other stocks the banking sector was mixed, with ANZ gained 0.4%, Westpac rose 0.5% following the opening a branch in Shanghai after Chinese regulators granted it a financial license, Commonwealth Bank of Australia declined 0.5%, and the National Australia Bank lost 0.8%.

The energy sector was also mixed, with Woodside gaining 1.1% and Santos adding 1.4%.

In the gold sector Newcrest Mining was up 2.1%.

Retailers stocks were mixed, with Woolworths rising 0.03%, Wesfarmers gaining 0.6%, Harvey Norman losing 1.8%, and David Jones declining 0.4%.

In the media sector Consolidated Media Holdings added 1.9%, News Corporation 0.9% and its non-voting shares dropping 15 cents to $23.23 and Fairfax declined 0.6%.