Centro Soars, ANZ Sells Opes Collateral

123jump.com Staff
03 Apr, 2008
New York City

Steady rise in commodities prices and a gain in financial stocks lifted sentiment in trading in Australia. ASX 200 index gained 1.9% or 106 to close at 5,608.90. An interest from more than six bidders in Centro group at 100% premium also improved mood in trading. Centro Properties rose 100% before stock was halted for trading. Citadel Resource stock rose 13% after Goldman Sachs sold 8% stake held by collapsed Opes Prime. Separately ANZ won a court ruling to sell assets of Opes on margin loan.

[R]3:00AM New York, 7:00PM Sydney – Australian stocks rose on a rise in commodities prices and on the continued strength in financial stocks.[/R]

Market Sentiments

ASX 200 index gained 1.9% or 106 to close at 5,608.90.

The Preliminary market turnover was 2.1 billion shares worth $6.46 billion, with 629 stocks up, 575 down and 320 unchanged. The most traded stock was Citadel Resources Group with 129.7 million shares worth $28.7 million.

Market Driver

The market today responded positively to press reports that Australian property trust Centro Properties Group was getting offers to buy a stake at more than triple yesterday''s share price.

Centro stock surged 71% after Australian Financial Review said that the property trust had received at least more than six offers above 90 cents a share.

During trade Centro had to call for a temporary trading halt after the ASX queried the movement of its shares. Prior to the trading halt the share gained as much as 35.5 Australian cents, or 120%, to 65 cents lifting the company market cap to $416 million.

The company spokesman Jim Kelly said, ""In regards to the article on page 54 of the Australian Financial Review today, as previously announced, Centro Properties Group is in discussions with a number of parties and lender groups in relation to the recapitalisation process.

Those discussions remain incomplete. At this time, there is no certainty or assurance that these discussions will lead to a transaction, what form such transaction may take, or what value might arise out of a transaction, if any.""

Centro, which is seeking to refinance $4.9 billion of debt, posted a record $1.1 billion loss in the six months to December 31 as it wrote down the value of its U.S. shopping malls.

Gainers and losers

Of the ASX 200 index stocks, Centro Properties led the gainers with a rise of 71.2% followed by increases in Centro retail Group of 31.9%, in Sunland Group of 15.8%, in Aquarius Platinum of 8.1% and in Australian Wealth of 7.8%.

Of the ASX 200 index stocks, Emeco Holdings led the decliners with a fall of 7.6% followed by losses in Sally Malay Mini of 3.8%, in Flight Centre of 3.5%, in Dexus Property of 3.5% and in Centennial Coal of 3.4%.

ChemGenex ahead in leukemia treatment development

Australian developer of cancer drugs, ChemGenex Pharmaceutical Ltd is set to unveil its leukemia treatment derived from the leaves of a Chinese evergreen tree ahead of Merck & Co and it expects the medicine to be approved in the US next year.

Merck and its partner, Vertex pharmaceuticals were forced to withdraw their drug in November after the drug showed several side effects.

Analysts believe that ChemGenex has a lead of 18 months ahead of six competitors in developing a therapy for an untreatable form of leukemia.

ChemGenex stock fell 5.8%.

Citadel rises 13% after selling stake pledged to Opes

Citadel Resource Group Ltd''s share gained 13% after selling an 8% stake that was pledged to the collapsed Opes Prime Stockbroking Ltd. Goldman Sachs JBWere Pty sold the 8% stake or 63 million shares at 22 cents a share, according to a report on Bloomberg News.

Citadel Resources had raised 108 million shares at 22 cents and raised A$29 million to develop the largest copper deposit mine in Saudi Arabia.

ANZ wins court approval to sell margin loan asset

ANZ won a court ruling that permitted the bank to sell secured collateral from failed broker Opes Prime Group. Opes collapsed and was forced into bankruptcy on margin loans irregularities.

Australia & New Zealand Bank together with Merrill Lynch were secured lenders to Opes. ANZ will proceed with the sale of secured asset to recover 40% of $610 million lending to Opes.

Separately ANZ plans to eliminate a staff of 35 in its wholesale mortgage business and consolidate two offices to one location in Melbourne. The operation called Origin with loan book of $5 billion worked with 20 mortgage processors.

ANZ stock rose 2.6%.

Usamanov keen to sale Mt Gibson stake

Russian business mogul Alisher Usamanov has revived his bid to sell his 19.6% in Mt Gibson Iron Ltd worth about $410 million despite a block on sale by Australian regulators.

Usamanov had sought to sell the shares to Shougang Corp but the sale fell through after Shougang''s links to existing Mt. Gibson shareholder, Hong Kong- listed APAC Resources Ltd was discovered. Usmanov intends to sell the stake, which is equivalent to 157 million shares via his company, Gazmetall Holding (Cyprus) Ltd.

The shares would be sold at a minimum of $2.60 apiece in a sale to institutional investors arranged by Merrill Lynch & Co, according to Bloomberg news. Usmanov stake since November 2006 in Mt. Gibson has tripled in value since then on rising demand for raw materials for steel from China.

Mt. Gibson called for a trading halt after informing the Australian Stock Exchange of a potential transaction concerning a material shareholding in the company.

Mt Gibson share was up 3.5%.

Kirin bids for Dairy Farmers

Japan''s biggest beverage maker, Kirin Holdings Company made a $900 million bid for Australia''s third-largest milk processor, Dairy Farmers.

Kirin''s spokesman Makoto Ando was reported to have indicated that they were interested in gaining market share in Australia as reported in Australian Financial Review.

Tokyo-based Kirin stands to gain more than half of Australia''s milk and dairy market through the acquisition and four months ago acquired National Foods for $2.14 billion.

Kirin suffering from declining beer sales in Japan is looking to expand in international markets.

Leighton wins $1 billion contract in India

Australia''s largest construction company Leighton Holdings won two contracts worth $1 billion to develop and operate open cut coal mine in north-eastern India.

Leighton won the contracts through its subsidiary Thiess, which would be responsible for building the infrastructure, then operate the Chatispur coal project for 20 years, in Jharkhand state.

""The long term contract between Thiess India and Abhijeet Group creates a solid foundation for the growth of our business in India,"" Thiess Asia chief executive Bruce Munro said.

Munro said over 115 million tons of coal would be mined over the next 20 years and development work will begin this month and mining to start in 2009.

The mine would have a maximum capacity of 6.75 million tons a year and would supply coal to steel plants and to a nearby 1,100 megawatt power station.

Leighton share was up 6.5%.