Australian Leading Indicators Decline

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

Skilled workers job vacancies decline 7.2% in December. Australia leading index of economic indicators eases to 0.6% in October. CBA completed A$2 billion capital raising after it dropped Merrill Lynch from the underwriting team. The troubled mall operator, Centro Retail Group surged 42%.

[R]3:00AM New York, 7:00PM Sydney- Skilled workers job vacancies decline 7.2% in December. Australia leading index eases to 0.6% in October. CBA completed A$2 billion capital raising.[/R]

Australian stocks rose fractionally after Mount Gibson reported today that it has secured approval for a bailout underwritten by China''s Shougang and APAC Resources.

In Sydney trading ASX 200 index rose 0.7% or 14.4 to 3,570.60.

Of the ASX 200 index stocks, 111 rose, 73 declined, and 6 were unchanged. Centro Retail Group led gainers in the index shares with a rise of 42.6%.

Australia Job Vacancies Drop in December

Australia''s Department of Employment reported that an index that measures job vacancies for skilled workers in metropolitan newspapers on the first Saturday of every month fell 7.2% to 62.4 in December from the previous month.

The index was 37.8% lower than a year earlier. Decline in job vacancies were recorded in 17 of the 18 occupational groups that are surveyed by the index.

Printing trade vacancies fell 24.2%, metal trades dropped 15.8% and wood trades slid 14.1%. However, skilled vacancies only rose for medical and science technical officers increasing 0.8%.

According to the department, all states and territories recorded declines in skilled vacancies in December from November. New South Wales slipped 10.5%, Tasmania 8.5% and Western Australia 7.6%.

Australia Leading Index Falls 0.6% in October

Westpac-Melbourne Institute Leading Index, which measures economic activity three to nine months in the future, declined to 0.6% in October from 1.1% the previous month.

The index was dragged by the 12.7% decline in the share price index. Concident Index eased to 1.6% and was below the trend estimate of 3.5%, indicating weak early momentum in the December quarter on weak retail sales.

Westpac notes that government''s A$8.4 billion one off payment to eligible households will likely boost retail spending in the December and March quarters.

The institute forecasted that Reserve Bank of Australia''s cash rate is likely to bottom out at 2.75% by the June quarter.

U.S. Fed Reserve Cuts Rates to 0.25%

The U.S. Federal Open Market Committee yesterday decided to set a target range of federal funds between zero and 0.25%. The Fed also indicated that it will start buying mortgage securities and look beyond providing liquidity to the financial markets.

The Fed noted in an accompanying statement that financial markets “remain quite strained and credit conditions tight” and it is prepared to keep rates low as long as necessary.

Gainers & Losers

Centro Retail Group led advancers in the ASX 200 index shares with a rise of 42.6% followed by increases in Mount Gibson Iron of 4%, in Macquarie Media of 21.7%, in Goodman Group of 16.4%, and EMECO Holdings of Ltd. of 15%.

ING Industrial led decliners in the ASX 200 index shares with a drop of 18% followed by losses in Macquarie DDR Trust of 14.6%, in AWB Ltd. of 12.3%, in Abacus Property of 12.2%, and Sigma Pharmaceutical of 6.4%.

Commonwealth Bank Lowered Offering Price

Commonwealth Bank of Australia reported today in a filing to the Australian Stock Exchange that it finalized its A$2 billion capital raising. The bank raised A$1.65 billion placement at A$26 a share, underwritten by UBS, and an additional A$357 million placement at A$28.37 a share, a 10.8% discount to yesterday''s closing price.

CBA was forced to reduce the price of its offering after it warned yesterday that its bad-debt charges had increased.

CBA reported that it had terminated its placement through Merrill Lynch after the banker failed to distribute some of the disclosures made by the bank earlier yesterday.

However, the bank also did not distribute these disclosures to the market.