Austrlian Stocks Rise

123jump.com Staff
26 Feb, 2008
New York City

ASX 200 index rose 1.1% or 61.7 to close at 5,621.60. Zinifex Limited and Allegiance Mining NL today jointly announced a revised takeover offer for Allegiance, priced at $1.10 cash per share. Zinifex delivered a record half-year profit of $1,309.7 million for the period ended 31 December 2007, 74% increase from a year ago on the sale of smelting assets. BlueScope Steel share gained 6.3% after the company hinted that profit in the current half is likely to rise on higher steel prices.

[R]3:00AM New York, 7:00PM Sydney- BlueScope reports a sharp fall in profit but forecasts higher profit in the current period. Allegiance Mining directors recommended revised offer from Zinifex.[/R]

Market Sentiment

ASX 200 index rose 1.1% or 61.7 to close at 5,621.60

The Preliminary market turnover was 1.42 billion worth $5.61 billion, with 571 stocks trading up, 606 trading down, and 357 unchanged.

Market Driver

Zinifex Limited and Allegiance Mining NL today jointly announced a revised takeover offer for Allegiance, under which Allegiance shareholders would be offered $1.10 cash per share. The increased offer represents an attractive premium for Allegiance shareholders.

Allegiance directors, Tony Howland-Rose, David Deitz, Barry Sullivan and Eddie Lee each recommended that all Allegiance shareholders accept the revised offer in the absence of a superior proposal.

Zinifex's chief executive Andrew Michelmore said: ""We are delighted that the Allegiance board is recommending our revised offer. The increased offer represents a very attractive offer and a fair value for Allegiance shareholders, reflecting the high quality of the Avebury nickel project.""

Allegiance has agreed to appoint Zinifex nominees to Allegiance's board once Zinifex reaches 50.1% acceptances, at which time the majority of Allegiance directors will resign. Zinifex has agreed to allow two of the current Allegiance directors (Barry Sullivan and Shi Peirong) may remain on the board of Allegiance, until Zinifex acquires 90% of Allegiance shares.

Zinifex also announced that shareholders in Allegiance Mining NL who accepted its takeover offer by for all of the shares in Allegiance after 5:00 pm (Melbourne time) but before 7.30 pm (Melbourne time) on 8 February 2008 have a right to apply to it to cancel their acceptance.

Zinifex delivered a record half-year profit of $1,309.7 million for the period ended 31 December 2007, 74% increase from a year ago on the sale of Zinifex's smelting assets which contributed $960.6 million to net profit and $1,785 million of cash.

Allegiance rose 2.8% and Zinifex rose 3.5%.

Gainers and losers

Of the ASX 200 index stocks, Transfield Service led the gainers with a rise of 24.2% followed by increases in Riversdale Mining of 12.9%, in Aristocrat Leisure of 6.5%, in Fortescue Metals of 6%, and in Incitec Pivot LT of 5.2%.

Of the ASX 200 index stocks, Allco Finance GR led the decliners with a fall of 63.6% followed by losses in City Pacific Ltd of 8.6%, in Babcock & Brown of 7.4%, in Aquarius Platinum of 7.1% and in Pacific Brands of 6.9%.

Dyno Nobel to restart ammonium nitrate plant

The world's second- largest explosives maker, Dyno Nobel Ltd's share rose 6.9% to its highest in 11 weeks in Sydney trading on optimism it may restart work on its stalled ammonium nitrate plant in Queensland state according to a report on Bloomberg and AAP.

Speaking on a conference call Dyno chief executive officer Peter Richards said Dyno, which spent $280 million on the project, had also held talks with potential investors to finance the project.

Richards said a group including United Group Ltd. and Bilfinger Berger AG has submitted a proposal to resume work on the Moranbah plant.

Dyno's full- year net income fell 49% to $42.7 million after it wrote off $52.4 million on the plant.

BlueScope shares up on improved earnings

Australia's largest independent steelmaker, BlueScope Steel share gained 6.3% after the company hinted that profit in the current half is likely to rise.

The company reported profit for the six months ended Dec. 31, excluding one-time items, fell 21% to $305 million ahead of $290 million estimates. Net income fell to $116 million or 15.6 cents per share from $388 million, or 54.6 cents, a year ago.

BlueScope Managing Director Paul O'Malley was confident that higher steel prices driven by continued strength in global demand were expected to improve earnings in this half.

Rio seek higher coal prices

Local news media reported that Rio Tinto Ltd was seeking to raise its 2008 contract coal price for Japanese utilities by up to 143%.

Bloomberg reported that marketing executives from Rio Tinto's Australian coal unit had offered their Japanese customers, including Chubu Electric Power Co, supplies for about $135 a ton compared to $55.65 a ton a year ago, during a meeting in Tokyo last week.

Seven Network routing for the axing of directors

The largest shareholder of West Australian Newspapers Holdings Ltd, Seven Network Ltd has indicated that they want five board members from the publisher to be removed because of poor performance.

Seven's chairman, Kerry Stokes made a formal request at a shareholder meeting to oust the non-executive directors after they were ``appalled'' by West Australian News' performance, which resulted in a cut in the company's dividend. The company said it would pay a 21cents dividend for the first half, compared with 30 cents a year earlier.

Executive Peter Gammell, was nominated by Stokes to stand for election to the West Australian News board, but emphasised that Seven wasn't seeking control of the newspaper group.

Seven shares added 2.7% and West Australian News stock increased 1.1%

Challenger posts 26% drop in profits

Challenger Financial Services Group today announced that it had posted a 26% drop in first-half profit as interest costs increased.

Its net income totaled $95.7 million in the six months ended December 31, down from $129.9 million a year earlier. Assets under management rose 22% to $47.3 billion and fee income climbed 25% after the $163 million acquisition of Choice Financial Services in September.

Challenger shares rose 2.7% after trimming its loss during the past year to 43%.

Allco share falls on debt repayment concerns

Allco Finance Group Ltd fell 63% today after the Australian asset manager said it be might forced by lenders to repay $1.15 billion of debt in the next three months.

Chief executive David Clarke said in a statement that Allco had $250 million due May 1st and additional $900 million could be called on to repay within 90 days. The company had $591 million in cash on Dec. 31.

The shares closed 92% below their record $13.23 a year ago.

The Sydney-based company joins Australian firms including Centro Properties Group and MFS Ltd. that have lost most of their market value as investors shun indebted firms with complex structures. Allco is a stakeholder in at least five listed funds that carry its name.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 89.85 or 0.65% to 13,824.72, in Hong Kong Hang Seng index increased 445.61 or 1.92% closed to 23,714.75. Australia ASX 200 index increased 44.50 or 0.79% to close 5,666.10.

In South Korea Kospi Index increased 00.00 or 0.00% to close at 1,709.13, in Thailand SET index closed lower 4.07 or 0.49% to 834.67 and Indonesia JSE Index edged decreased 12.99 or 0.47% to 2,738.87. Sensex index in India increased 155.62 or 0.88% to 17,806.19.