Centro Chief Quits, ASX Edges Up

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

Australian stocks traded lower as investors worried that global credit market may have further to fall. ASX 200 index declined 0.3% or 20 to close at 5,960. Centro Properties chief executive Andre Scott resigned. The head of the U.S. malls division Glenn Rufrano is installed as the CEO and negotiate with banks. BHP is expected to make a bid for Rio Tinto ahead of the deadline. Qantas was fined by a U.S. judge for $68 million.

[R]3:00AM New York, 7:00PM Sydney- ASX 200 index declined 0.3%.[/R]

ASX 200 index lost 0.3% or 20 to close at 5,960.

The Preliminary market turnover was 1.69 billion shares worth $6.13 billion with 542 shares moving up, 700 moving down, and 342 unchanged.

Centro Properties was the most actively traded stocks with 140.1 million shares worth $87.4 million changing hands.

Centro Properties chief executive Andrew Scott resigned and head of the U.S. shopping mall division, Glenn Rufrano will take over the position. Centro, the second largest Australian mall owner, had financed most of its expansion on credit market. The company accumulated a portfolio of 700 shopping centers in the U.S. and acquired a debt of A$3.9 billion in the process.

The current credit market malaise has choked off Centro from securitizing mortgages and repaying the debt it owes Lenders have extended the deadline to repay the debt by February 15th.

Qantas was fined US$68 million in a Washington court after pleading guilty to charges of playing a part in a conspiracy to fix rates for international air cargo shipments. The airline was given 15 days to pay the fine, which had been agreed to under a plea deal.

JPMorgan Chase & Co raised Australia''s largest steelmaker, BlueScope Steel Ltd''s full-year profit forecast by 10% because of rising prices in Asia.

According to a J P Morgan research report reported by Bloomberg News, BlueScope Steel net income is expected to reach $526 million ($472 million) for the 12 months ending June 30, up from an earlier estimate of $477 million and against last year''s profit of $686 million. BlueScope rose 1% after the release of earnings estimate from JP Morgan.

Mirvac Ltd today disclosed plans to redevelop the town site of 270 hectares in Binningup in Western Australia at a cost of $1 billion. Mirvac said work on the site is expected to commence in 2009, and estimated to complete the project in 20 years. Binningup Beach is located approximately 140km south of Perth.

Rio Tinto Ltd subsidiary Energy Resources of Australia Ltd registered a 14% increase in annual production at its Ranger uranium mine in the Northern Territory.

The company said its production had risen to 5,412 ton of uranium oxide in 2007. During the fourth quarter of 2007, production totaled 1,553 tonnes, up 14% from the third quarter, but was down 7% from the same period in 2006.

The Australian dollar closed half a US cent higher today heightening expectations that interest rates will fall in the US, making Australian investments more attractive.

At the close, the dollar was trading at US$0.8997, up from yesterday''s close of US$0.8944.

The U.S. Federal Reserve Bank is widely anticipated to cut interest rate at the end of this month. The move would widen the interest rate differential between the U.S. and Australia.

Of the ASX 200 index shares, Energy Resource Australia led the gainers with a rise of 9% followed by increases in Lynas Corporation Limited of 8%, in Paladin energy of 7.2%, in Henderson of 5.2%, and in Kagara limited of 5.1%.

Of the ASX 200 index stocks, Centro Retail led the decliners with a fall of 44.4% followed by losses in Centro Properties of 30.2%, in MFS Limited of 19.3%, in Sundance Resource of 8.5% and in Transfield Service of 6.7%.