Sydney Stocks Fall 12.7%, Lihir God Rises

123jump.com Staff
31 Oct, 2008
New York City

Stocks in Australia edged higher but for the month declined 12.7%, the worst decline in the month in more than three decades. New home sales in September fell 1.8% after dropping 1.3% in August. Lihir Gold production in the quarter ending in September rose 40%.

[R]3:00AM New York, 7:00PM Sydney - Australian stocks lose A$150 billion in October, fall 12.7% in the month.[/R]

Stocks in Australia rose marginally by 0.4%, but dropped 12.7% for the month, the worst decline in the month in 34 years according to the data available on the ASX Web site.

In Sydney trading ASX 200 index rose 0.4% or 16.9 to 4,018.00.

Of the ASX 200 index stocks 118 rose, 67 declined and 15 were unchanged. Minara Resources led gainers in the index share with a rise of 96.2% followed by Macquarie DDR Trust increasing 22.4%.

Newly Built Home Sales Decline 1.8% in September

The Housing Industry Association reported today that sales volumes of newly built homes dropped 1.8% in September from a decline of 1.3% in August despite an interest rate cut by the Reserve Bank of Australia.

However new home sales increased by 19.5% in Western Australia and edged up by 4.6% in New South Wales.

Sales in Queensland, South Australia and Victoria fell by 10.6%, 9.7% and 9.2% respectively.

Detached house sales declined by 2.3% in the period, while sales of multi-units gained for the second consecutive month by rising 1.2%.

The HIA forecasts that new home building activity will slow in 2009, but housing starts will begin to rebound over the first half of next year.

The HIA chief economist Harkey Dale said, “There is cause for optimism that the worst may be behind us. With interest rates on the move down and a tripling of the First Home Owners Grant for new dwellings, we would expect to see a bottoming out in leading housing indicators over the December 2008 quarter.”

RBA Injects A$1.91 billion in Money Market

The Reserve Bank of Australia today injected A$1.91 billion into the money market as the central bank projected a deficit of A$1.26 billion.

Australian banks shored up deposits held by the central bank to A$7.6 billion yesterday.
The interbank lending rate for three-month loans declined 9.67 basis points to 5.8%.

Gainers & Losers

Minara Resources led advancers in the ASX 200 index shares with a rise of 96.2% followed by increases in Macquarie DDR TR of 22.4%, in NRW Holdings Ltd of 20.4%, in OM Holdings Ltd. of 19.8%, and Panoramic Resources of 19.3%.

Murchison Metals led decliners in the ASX 200 index shares with a fall of 16.5%, in Macquarie Office of 12.3%, in Panaust Ltd. of 12%, in Dexus Property of 11.8%, and GWA International Ltd. of 10.2%.

Murchison Metals and other commodity stocks slumped after crude oil and metal prices fell on news that the U.S. gross domestic product fell in the third quarter to 0.3%.

Crude oil for December delivery fell 2.3% to $65.96 a barrel and copper prices dropped by 10%. Zinc and lead prices also declined 7.9% and 8.5% respectively. Fortescue Metals slid 6.1%.

Gold prices fell. Lihir Gold plunged 4.9% and Sino Gold dipped 4.1%.

Earnings Review

Lihir Gold reported 40% increase in gold production in the latest quarter and production in Papua New Guinea rose 27%. The gold production in the quarter ending in September rose to 250,000 ounces and the company kept its full year production target at 850,000.

In the quarter the cash production cost was $412 an ounce.

For the full year, the company expects to produce more than 700,000 ounces of gold at Lihir Island, approximately 40,000 ounces from Bonikro in Ivory Coast, 50,000 ounces from Mt Rawdon in Western Australia, 20,000 ounces from Ballarat, Victoria and 9,400 ounces from Kirkalocka, Western Australia.

The company estimates total cash costs for gold production between $400 and $420 per ounce.