Market Updates

ANZ Falls, BHP Rises

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

    Santos and its partner Apache Corp based in the U.S. plans to spend $800 million on the development of the Reindeer gas project located off the coast of Western Australia and hopes to deliver gas at the end of the year 2010. Two directors at Fortescue were forced to liquidate their holdings in the company to cover margin loans totaling $23 million. ANZ Bank stock fell 7% after it provisioned $975 million to cover subprime losses, 72% higher than fiscal 2007.

[R]3:00AM New York, 7:00PM Sydney – BHP plans to double its oil production in the next four years. Santos finalizes its investment in gas project.[/R]

Market Sentiments

ASX 200 index gained 0.1% or 5.4 to close at 5,625.00.

The Preliminary market turnover was 1.59 billion shares worth $5.44 billion, with 651 stocks up, 550 down and 340 unchanged. The most traded stock was Centro Properties with 87.8 million shares worth $39.4 million.

Market Driver

Santos today announced that it has finalized its investment in the Reindeer Gas Project located offshore Western Australia. Santos and its partner Apache Corp based in the U.S. plans to spend $800 million on the development of the Reindeer gas project and hopes to deliver gas at the end of the year 2010.

Reindeer gas, according to Santos would be produced via an unmanned, minimum facility wellhead platform located in 65 meters of water and gas and liquids would be exported from the platform to a new onshore gas processing plant via a single 105-kilometre pipeline.

The Reindeer field proven reserves are estimated at approximately 485 Petajoules (Santos share approximately 220 Petajoules) of sales gas and 1.6 million barrels (Santos share approximately 0.7 million barrels) of condensate.

Santos chief executive, David Knox said the formal approval of the Reindeer Gas Project represents another important step in monetizing Santos'' significant gas resources and highlights the positive impacts of bringing a significant new source of gas supply into the rapidly growing Western Australian market.

The Reindeer gas field was discovered in 1997 and is located in the Carnarvon Basin, offshore Western Australia within exploration permit WA-209-P.

Santos has a 45% interest in the Reindeer Gas Project and Apache Northwest Pty Ltd has 55% holds the remaining interest. Santos'' share of the estimated project capital cost is $379 million.

Santos share was up 0.6%.

Gainers and losers

Of the ASX 200 index stocks, Centro Properties led the gainers with a rise of 14.8% followed by increases in Kagara Ltd of 9.1%, in Seek Ltd of 8.2%, in Western Areas NL of 7.6% and in Fortescue Metals of 7%.

Of the ASX 200 index stocks, Allco Finance Group led the decliners with a fall of 8.7% followed by losses in Sundance Resource of 6.9%, in ANZ Bank of 6.6%, in Babcock & Brown of 5.6% and in St George Bank of 5.4%.

Fortescue''s directors sell off shares due to exposure to Opes

Fortescue Metals Group Ltd today announced that it was advised by two directors, Herb Elliott and Graeme Rowley, that they will be selling a total of 3.22 million shares to cover the margin call after the collapse of stock broker Opes. The shares were valued at $23 million based on closing price of stock on Friday.

The total number of shares sold represents only 0.12% of Fortescue''s issued capital and company confirmed that no other directors or executives have pending margin call against company shares.

Fortescue also celebrated its first shipment of iron out of the Pilbara which the company termed as historic event.

Fortescue''s share was up 5.3%.

ANZ share falls in anticipation of higher bad debt

Australia and New Zealand Banking Group Ltd''s shares fell by 7% after it disclosed that it anticipates a much higher bad debt provisions in the first half of fiscal 2008. ANZ said provisions would be about $975 million, a 72% increase from a year ago and more than the $567 million in the 2007 full year.

ANZ is expected to post first-half cash profit of $1.85 billion. The surprise announcement came less than three weeks before its first-half earnings on April 23, and could serve as a reminder to investors who have viewed Australian banks as a less risky bet than their U.S. or European peers.

ANZ''s shares fell 6.6%, National Australia Bank Ltd, Commonwealth Bank of Australia Ltd and Westpac Banking Corp all fell between 3% and 5%.

Just engages Lonergan Edwards on Premier bid

Just chairman Ian Pollard today urged shareholders to wait for Premier''s statement before making a decision.

""Shareholders will be given sufficient time to properly consider Premier''s proposed offer Premier has not yet made a formal offer to Just Group shareholders – this will be provided in Premier''s Bidder''s Statement.

""Premier has given no indication of when its Bidder''s Statement will be sent to you, however we expect it is unlikely to be distributed until late April at the earliest. Premier''s offer must remain open for a minimum of one month,"" he said.

In response, he added that Just would provide shareholders with Premier''s statement, containing the special board committee''s detailed recommendation and the independent expert''s report, approximately two weeks after it receives Premier''s Bidder''s Statement.

Just Group Limited has engaged Lonergan Edwards as its independent expert to prepare a report on whether the unsolicited offer from Premier Investments Limited was fair and reasonable.

Solomon Lew through his entity Premier Investments Ltd made a $900 million takeover bid for Just Group earlier this week. The offer values Just between $828 million and $898 million.

Just chairman Ian Pollard rebuffed Lew''s invitation to join the Premier board if it gains full control of the clothing retailer early last week. Lew already controls 23.6% of Just through Premier and Metrepark Pvt Ltd, a private Lew family company.

Just''s share was up 0.7%.

BHP in first year of double digit growth

Mining giant BHP Billiton today disclosed that this year is the initial year in its quest to achieve double-digit growth in oil and gas output within the next five years. The mining company currently produces 320,000 barrels of oil a day and hopes to increase production to 516,000 by the year 2012.

BHP Shenzi project in the Gulf of Mexico may start earlier than its scheduled mid-2009 date and the Pyrenees oil project in Australia, due to begin output in the first half of 2010.

BHP stock advanced 5.1%.

Annual Returns

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Earnings

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