New Home Loans in Australia Rise

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

Australian home loans rise 1.3% in November. Wesfarmers cuts interim profit forecast to A$850 million to A$880 million on increasing derivative loss provisions. Rio Tinto will slow Argyle underground project. HFA Holdings led decliners in the ASX 200 index with a loss of 11%.

[R]3:00AM New York, 7:00PM Sydney - Australian home loans rise 1.3% in November. Wesfarmers cuts interim profit forecast to A$850 million to A$880 million on increasing derivative loss provisions.[/R]

Australian market averages gained fractionally edged by energy stocks as crude oil prices rebounded to $38 a barrel after Saudi Arabia oil minister Ali al-Naimi said his country will cut production more than previously announced.

In Sydney trading ASX 200 index increased 0.9% or 32.4 to 3,687.00.

Of the ASX 200 index stocks, 120 gained, 64 declined, and 16 were unchanged. Lynas Corp. led advancers in the in the index shares with a rise of 15.9% followed by Atlas Iron gaining 13.8% as oil and metal prices rallied.

Australian Home-Loans Rise 1.3% to 49,192 in November

Australian Bureau of Statistics reported that the total value of dwelling finance commitments excluding alterations and additions declined 0.9% to A$17.5 billion in November from the comparable year ago period.

Investment housing commitments fell 6.1%, while owner occupied housing commitments increased 1.4% to A$12.5 billion.

The ABS noted that the loans granted to buy or build homes and apartments gained 1.3% to 49,192 in the period.

Construction of dwellings dropped 0.3% to 854, purchase of new dwellings increased 9.8% to 971 and purchase of established dwellings edged up 1.1% to 43,367.

Also the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments in original terms increased to 23.6% in November from 19.5% the previous month.

The number of fixed rate loan commitments as a percentage of total owner occupied housing finance commitments declined to 2.5% from 2.9% a month earlier.

Wesfarmers Lowers H1 Profit

Wesfarmers reported today in its trading update that the company forecasts that interim profit in the period to December 31 will be between A$850 million and A$880 million after A$150 million in provisions and write-downs in the value of some investments.

The provisions include property write-downs in the retailer Coles division on reduced yield expectations and reductions from the mark-to-market of the value of investments in Gresham Partners Private Equity Funds, Bunning Warehouse Property Trust and other portfolio investments.

The retailer is also provisioning for the closure of Kmart’s distribution centers as part of a restructure.

Wesfarmers said it may not be able to pay dividends for the year 2009 as earlier guided for $2 per share. Interim results are expected on February 19, 2009.

Gainers & Losers

Lynas Corp. led gainers in the ASX 200 index shares with a rise of 15.9% followed by increases in Atlas Iron of 13.8%, in Kagara Ltd. of 11.3%, in Macquarie Countrywide of 10.4%, and St Barbara of 8.6%.

Energy stocks increased as crude oil prices rallied $2.50 to $38.80 a barrel as Saudi oil minister Ali al-Naimi said the country will cut on a steep production cut than previously announced. Linc Energy soared 7.3% and Paladin Energy gained 6%.

HFA Holdings led decliners in the ASX 200 index shares with a fall of 11.1% followed by losses in Sundance Resources of 8.7%, in Valad Property of 8.6%, in MacMahon Holdings of 7.5%, and EMECO Holdings of 7%.

Rio to Slow Argyle Underground Project

Argyle said in a statement that the company’s underground project will be slowed to critical development activities.

Argyle chief operating officer Kevin McLeish said, “Given global market conditions, we will also reduce diamond production by taking an extended maintenance shutdown of the diamond processing facilities for up to three months, commencing in March.”