Australian Stocks Fall, Rio Tinto Delays

123jump.com Staff
13 Jan, 2009
New York City

Stocks in Australia continued their slides as metals and oil prices decline in the region. Sydney benchmark index declined nearly 1% and resource and financial stocks led the decliners. Rio Tinto delayed the second project mining project as the worldwide slowdown intensifies.

[R]3:00AM New York, 7:00PM Sydney - Australian stocks fall dragged by commodity stocks.[/R]

The benchmark stock index in Australia fell fractionally weighed by commodity stocks on falling crude oil and metal prices after concerns that demand will continue to decline as the global economic crisis deepens.

In Sydney trading ASX 200 index dropped 0.8% or 28.7 to 3,654.60.

Of the ASX 200 index stocks, 62 increased, 121 dropped, and 17 were unchanged. Sundance Resources led gainers in the index shares with a rise of 15% followed by Lynas Corp gaining 12.5%.

Australia Judged the Third Freest Economy

American think-tank the Heritage Foundation has named Australia as the world’s third freest economy after Hong Kong and Singapore in the list of 179 economies.

The annual index gauges country’s commitment for free market capitalism.

The U.S. dropped one rung to sixth place on increases in tax revenue and government spending as a percentage of its gross domestic product. U.S., the bastion of free market has turned socialistic as many of its regulatory agencies failed to supervise financial institution and government encourage reckless leverage in the brokerage sectors.

According to the report, director of the foundation’s Centre for International Trade and Economics Terry Miller said over the past year capitalism faced a crude test as financial institutions sought government intervention to help them sail through the global financial crisis.

The index notes that North Korea is the world’s most restricted economy followed by Zimbabwe, Cuba, Mynmar and Eritrea.

Rio Tinto Delays US$371 Million Train Project

Dow Jones reported today that Rio Tinto has delayed its planned automated train project in Pilbara as demand for iron ore continues to plummet.

The US$371 Million project was planned to be implemented in 2012 in Western Australia.

Rio’s chief executive Sam Walsh said that a considerable progress has been made towards implementation “and the program’s momentum can be easily renewed when circumstances permit.”

Separately, the company also said it has suspended underground expansion of the Northparkes copper and gold mine in New South Wales on falling copper prices.

In all, 320 contractors have been shed and 25 permanent staff has been made redundant as a result.

Rio Tinto plans to reduce capital spending by US$5 billion this year and cut 14,000 jobs.

Gainers & Losers

Sundance Resources led advancers in the ASX 200 index shares with a rise of 15% followed by increases in Lynas Corp. of 12.5%, in Babcock & Brown of 10.8%, in Sunland Corp. of 8.6%, and Nexus Energy of 7.1%.

PanaAust led decliners in the ASX 200 index shares with a decline of 14% followed by losses in HFA Holdings of 12.9%, in Centro Retail Group of 12.5%, in Abacus Property of 9.4%, and Australia Worldwide Exploration Ltd. of 9.4%.

Commodity stocks fell as crude oil for February delivery fell 7.9% to $37.59 a barrel. Gold prices slipped $30 to $824 per ounce. Gloucester Coal dipped 8.5%, Panoramic Resources fell 7.8% and Atlas Iron declined 6.5%.

ANZ Shores Up Stake in PT Panin Bank to 38.3%

ANZ said today it has shored up its stake in PT Panin Bank in Indonesia by acquiring a further 8.4% stake for US$114 million.

The shares were acquired in private sales from institutional investors.

ANZ Chief Executive Officer Asia Pacific Alex Thursby said, “Indonesia is a key market in ANZ’s growth strategy in Asia and Panin is one of ANZ’s longest standing and largest strategic partnerships in the region.”