Australia GDP Falters; Qantas, BA Merger Talks

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

Australian third quarter GDP growth fell to 0.1% and non-farm sector growth declined 0.3%. Weak exports and falling domestic demand weakened the service and construction sector. Babcock & Brown received A$150 million in emergency funding from a syndicate of banks.

[R]3:00AM New York, 7:00PM Sydney – The third quarter GDP in Australia rose 0.1% and non-farm sector declined 0.3%. Babcock & Brown gets A$150 million from banking syndicate.[/R]

Australian stocks rose fractionally after a government report showed that economic growth slowed in the quarter to September, while non-farm GDP declined.

In Sydney trading ASX 200 index stocks gained 0.2% or 5.6 to 3,533.80. Of the ASX 200 index stocks, 86 increased, 102 declined, and 12 were unchanged. Transfield Services Ltd. led gainers in the index shares with a rise of 29.4%.

Australia''s GDP Increase 0.1% in Q3

Australian Bureau of Statistics reported today that the country''s gross domestic product increased 0.1% in the three months to September in seasonally adjusted terms. Non-farm GDP declined by 0.3%, while the terms of trade and the real gross domestic income advanced 5.6% and 1.4% respectively.

ABS says that main contributions to the increase in expenditure on GDP in the review period were engineering and construction investment rising 0.4 percentage points, public gross fixed capital formation increasing 0.2 percentage points ad inventories weighing in with 0.2 percentage points.

Negative contributions to the GDP were from a fall in imports of 0.4 percentage points, owner transfer costs, falling 0.2 percentage points and new building shedding 0.1 percentage points.

The report also noted that agriculture, forestry and fishing contributed 0.3 percentage points to GDP growth and construction contributed 0.1 percentage points.

Also transport and storage, Property and business services, and Finance and Insurance services declined 0.1 percentage points.

Australian Interest Rates Rise

Bloomberg News reported today that the difference between the rate Australian banks charge each other for three-month loans and overnight swap rate increased by 9 basis points to 59.4 basis points today after the government intimated that monetary policy is now expansionary.

Gainers & Losers

Transfield Services led advancers in the ASX 200 index shares with a rise of 29.4% followed by increases in Babcock & Brown of 26.7%, in Babcock & Brown of 21.9%, in Kingsgate Consolidated of 14.5%, and Tishman Speyer of 12.5%.

Babcock & Brown increased after the Australian reported that the company''s banking syndicate has agreed to extend A$150 million lifeline for the company.

Macquarie Countrywide led decliners in the ASX 200 index shares with a fall of 14% followed by losses in Macquarie Media of 10.1%, in NRW Holdings 10%, in Babcock & Brown of 9.1% and Alesco Corp. of 9.1%.

Energy stocks dropped after oil prices slid $2.32 to $47 per barrel. Centennial Coal shed 6.9% and Nexus Energy dipped 6.1%.

Qantas Airways Ltd. in Talks with British Airways on Merger

Qantas Airways reported today that it is in talks with British Airways on a merger through a dual-listed company structure.

The company said that there is """"no guarantee that any transaction will be forthcoming.""""

Babcock & Brown gets A$150 million in Funding

The Australian reported today that Babcock & Brown''s banking syndicate has extended temporary support with an additional A$150 million in funding.

The extra funding, which was initially opposed by Societe Generale and two German banks, West LB and Hypo Vereinsbank will last another two months.