Australian Stocks Decline on Global Worries

123jump.com Staff
12 Jun, 2008
New York City

Global weakness in financial stocks and a rise in inflation stoked by sharp rise in crude and food prices dragging the index lower. ASX 200 index lost 2.5% or 138.1 to close at 5,329.20. The Preliminary market turnover was 1.93 billion shares worth $6.46 billion, with 965 stocks down, 322 up and 328 unchanged. BHP dropped 4% after it advanced the rebuild schedule for a nickle smleter in Kalgoorlie.

[R]3:00AM New York, 7:00PM Sydney – Global weakness in financial stocks and a rise in inflation stoked by sharp rise in crude and food prices dragged ASX 200 index lower.

Market Sentiments

ASX 200 index lost 2.5% or 138.1 to close at 5,329.20. The Preliminary market turnover was 1.93 billion shares worth $6.46 billion, with 965 stocks down, 322 up and 328 unchanged. The most traded stock was IM Medical, with 97.2 million shares worth $2.71 million.

BHP falls 4% on furnace rebuild schedule

The world''s largest mining company, BHP Billiton fell 3.8% today after announcing that it will advance the rebuild of Kalgoorlie Nickel Smelter furnace in Western Australia, the furnace has deteriorated more than prevous estimate. BHP said in a statement, planning and preparation for a rebuild of the furnace has been in progress for the past two years.

""The duration of the rebuild is estimated to be around four months. The Kalgoorlie Nickel Smelter normally produces around 100,000 tonnes of nickel-in-matte per annum that is both the feedstock for the Kwinana Nickel Refinery and exported to international customers.

""The estimated impact on sales in the 2009 financial year is expected to be around 25,000 tonnes of contained nickel units, plus 3,000 tonnes of contained nickel units in the 2008 financial year,"" the company said.

BHP said as a result of the furnace rebuild, the Kwinana Nickel Refinery would be forced to shutdown for the duration of the rebuild.

The shutdown will commence immediately.

Gainers and losers

Of the ASX 200 index stocks, Sino Gold Mining led the gainers with a rise of 12.1% followed by increases in Perilya Ltd of 11.4%, in Minara Resources of 9.1%, in Sallay Malay Mini of 6.5% and in Mincor Resources of 6.4%.

Of the ASX 200 index stocks, Babcock & Brown led the decliners with a fall of 31% followed by losses in Babcock & Brown of 27.5%, in ABC Learning of 17.1%, in Babcock & Brown of 13.6% and in Great Southern of 12.3%.

Babcock & Brown Power to conclude final settlement

Western Australia''s biggest natural gas retailer, Babcock & Brown Power today advised that the final settlement on the recently executed $2.7 billion its debt refinancing facility is scheduled to be completed early next week.

The company said the draw-down and financial closure of the refinancing facility follows assessment of the impact of the recent Western Australian gas supply disruptions on the Alinta business and discussions with the banks providing the facility.

The ratings agency, Fitch, also yesterday announced assignment of a ''BBB-'' credit rating on the $2.7 billion secured facility.

Approximately 30% of the gas consumed in WA and a similar proportion of Alinta''s portfolio of gas is supplied from the Apache Energy Varanus Island field. Apache continue to advise that it may be approximately two months before restoration of gas supply from Varanus Island.

""BBP and Alinta have responded quickly to mitigate the impact of the loss of production from Varanus Island on the WA energy market and continue to work with various stakeholders to undertake the necessary steps for mitigation.

The copmany statement indicated a that impact on earnings for the fiscal years 2008 and 2009 are expected to be non-material.

Leighton secures $385 million contract in Dubai

The Al Habtoor Leighton Group and Murray and Roberts joint venture has been awarded an $385 million contract for the construction of Trump International Hotel and Tower in Dubai for Nakheel.

The Al Habtoor Leighton Group said its share was AED 1.45 billion. The project, located on Palm Jumeirah, is a high-end, mixed-use development containing hotel and residential facilities.

The project involves the construction of a 62-storey structure in Palm Jumeirah. The 270-metre design, which has a total gross built-up area in excess of 250,000 square metres, will feature two towers that rise above the Palm Monorail and central park, merging as one towards the sky.

The development comprises a unit mix of 378 hotel rooms and suites, 385 condominiums, 12 exclusive townhouses, 45,000 square feet of retail and 60,000 square feet of office space.

Leighton''s shares fell 1.9%.

Billabong share falls despite acquisition

Billabong International Limited''s share fell 4.1% today despite yesterday''s announcement that it had completed an agreement to acquire the retail operations of Quiet Flight, one of the Billabong Group''s key retail partners in the United States. Quiet Flight operates 13 stores, including the flagship Billabong and Element retail stores in New York.

""Quiet Flight''s founder, Ed Leasure, opened his first surf shop at Cocoa Beach in Florida in 1972 and he has been doing business with Billabong over several decades,"" said cief executive Derek O''Neill.

Quiet Flight is expected to contribute approximately 3% of the Billabong Group''s sales for the 2008-09 financial year and is expected to be earnings accretive in its first full year within the Group.

Asian markets review

In Tokyo Nikkei 225 Index closed lower 294.88 or 2.08% to 13,888.60, in Hong Kong Hang Seng index decreased 303.74 or 1.30% closed to 23,023.86. In Australia ASX 200 index lower 138.10 or 2.53% to close 5,329.20. In Malaysia KL Composite index decreased 3.74 or 0.30% closed to 1,225.54.

In South Korea Kospi Index increased 42.31 or 2.37% to close at 1,739.36, in Thailand SET index closed lower 0.86 or 0.11% to 790.80 and Indonesia JSE Index edged increased 34.22 or 1.44% to 2,409.01. Sensex index in India increased 64.88 or 0.43% to 15,250.20.