ASX Suspends Lehman, Stocks Lower

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

Stocks in Australia fell after Lehman Brothers decided to seek bankruptcy protection. The news rattled markets in Australia and few other markets that were open in Asia. Lehman Brothers, struggling for months to find a buyer finally was forced to seek protection as a deal with Korean bank unraveled. Australia suspends Lehman from the exchange membership.

[R]3:00AM New York, 7:00PM Sydney- Australian Stock Exchange suspends Lehman Brothers after the investment bankers decides to file for bankruptcy protection.[/R]

Stocks in Sydney plummeted after investors were unnerved by Lehman Brothers intention to file for bankruptcy protection. The mortgage securities broker that in many ways built and profited from the rapid expansion in the bonds market became its own victim.

Market Sentiment

In Sydney trading ASX 200 fell 1.76% or 86.1 to 4,817.70.

Of the ASX 200 index stocks 42 rose, 150 declined, and 8 were unchanged. Sino Gold led advancers in the index shares with a rise of 14.09% after the slide of dollar forced investors into commodities.

Australian Exchange Suspends Lehman

Reuters News reported on its Web site today that the Australia Securities Exchange today suspended U.S. investment bank Lehman Brothers as a participant on the bourse for an initial period of one month. The report however notes that Lehman does not participate in ASX’s daily settlement process and is not a clearing or settlement participant.

The troubled U.S. investment banker has estimated $613 billion in outstanding liabilities, including about $149 billion of corporate bonds and $639 billion in assets according to the bankruptcy filing.

Lehman plans to sell its broker-dealer operations, and is still in advanced discussions with a number of potential buyers of its investment management division.

British bank Barclays and Bank of America withdrew from the potential acquisition talks after the U.S. Treasury failed to give any financial guarantee for a deal.

New Zealand Consumer Confidence Rises

Bloomberg News reported on its Web site today that the Colmar Brunton poll for New Zealand Television consumer confidence rose the most in five years.

Of the 55% respondents of 1,000 surveyed last week were optimistic that the economy will improve in the following year, higher than 44% respondents in August.

The recent interest rate cuts by the central bank have raised expectations that the country will be able to weather current economic weakness.

Gainers & Losers

Sino Gold led advancers in the ASX 200 index shares with a rise of 14.09% followed by increases in Lihir Gold of 12.95%, in Panoramic Resources of 9.09%, in St Barbara Ltd. of 9.09%, and Newscrest Mining of 8.21%.

Other commodity stocks also increased as well as metal prices rose. Gold for immediate delivery edged up 2.6% to $785.70 per ounce. Oz Minerals Ltd advanced 7.07% and Oil Search Ltd of 7.04%.

Centro Properties Ltd led decliners in the ASX 200 index shares with a drop of 31.43% followed by losses in Centro Retail Group of 31.03%, Babcock& Brown of 20%, in Babcock& Brown of 18.99%, and Babcock& Brown of 16.84%.

Financial stocks plummeted on the news that Lehman Brothers will filed for bankruptcy protection. Allco Finance fell 14.29% and Challenger Finance slipped 7.49% on the news.