Qantas Slashes Profit; Australian Stocks Rise

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

Australian stocks gained as commodities and gold prices edged higher. Australian business lending falls 14.7% to A$25 billion in February but business confidence increase in March. Qantas slashes its earnings estimate for the fiscal year to as low as A$100 million.

[R]3:00AM New York, 7:30 PM Sydney - Australian business lending falls 14.7% to A$25 billion in February but business confidence increases in March.[/R]

The benchmark stock index rose 2.2% in Australia leveraged by rising commodity prices. Gold prices climbed 1.4% to $895.80 per ounce.

In Sydney trading ASX 200 index rose 1.4% or 81.3 to 3,752.90.

Of the ASX 200 index stocks 150 gained, 36 declined, and 15 were unchanged. Aquarius Platinum led gainers in the index shares with a rise of 18.5% followed by PMP Ltd. increasing 15%.

Business Lending Drops 14.7% in Feb

Australian Bureau of Statistics reported today that the value of total commercial finance commitments or business lending in seasonally adjusted terms dropped 14.7% to A$25 billion in February from A$29.3 billion the previous month as revolving credit commitments declined 25.6%.

The value of owner occupied housing commitments, excluding alterations and additions, gained 2.7% to A$14.5 billion, while the seasonally adjusted series for the value of total personal finance commitments declined 0.2% to A$6.5 billion.

ABS notes that lease finance commitments dipped 2.4% and fixed lending declined 7.5%.

Australia Business Confidence Rises in March

National Australia Bank reported today that the sentiment index rose 9 points to –13 spurred by the stimulus package and interest rate cuts by the Reserve Bank of Australia.

The RBA last week cuts the key rate to the lowest in 49 years at 3%.

A measure of employment dropped 2 points to –29 in the review period. The NAB chief executive officer Alan Oster forecasts that the jobless rate will increase to 7.75% in 2010 from 7.5% earlier forecasted.

Outlook for exports plunged 4 points - 30, while the business conditions gauge, reflecting hiring, sales and profits, gained 3 points to –17.

In addition, a measure of forward orders gained 9 points to -18, and capacity utilization dropped 0.5 points to 78.9%.

Qantas to shed 1,750 jobs

Qantas today cut its projected profit before tax for the fiscal 2009 to between A$100 million and A$200 million from the earlier forecast of A$500 million on falling international travel.

The new profit target includes A$150 million in provisions for writing down the value of planes and restructuring costs.

The airline will shed 1,750 jobs, 500 managerial positions and 1,250 jobs from across the airline- and ground 10 planes.

Qantas chief executive Alan Joyce said, “We employ over 34,000 people and we are striving to protect as many of their jobs as possible, but the capacity reductions to protect the long-term viability of the overall Qantas Group mean that up to 1,250 equivalent full-time positions will be affected in addition to the management reductions being made.”

In addition, Qantas will slash capital expenditure by A$800 million in 2009-10 and defer aircraft orders, including four superjumbo Airbus A380s and 12 Boeing 737-800 aircraft.

Gainers & Losers


Aquarius Platinum led advancers in the ASX 200 index shares with a rise of 18.5% followed by increases in PMP Ltd. of 15%, in Boart Longyear of 13.3%, in Pacific Brands of 13.1%, and Aquarius Platinum of 11.7%.

Aquarius Platinum led gainers in the index shares on rising commodity prices. Gold prices gained 1.4% to $895.80 per ounce.

Equinox Mine jumped 8.9%, Panoramic Resources increased 8.8%, and Centennial Coal edged up 8.5%.

ING Industrial led decliners in the ASX 200 index shares with a drop of 5.3% followed by losses in Iluka Resources of 5%, in Kingsgate Consolidated of 3.9%, in Metcash Ltd. of 3.6% and Apa Group of 3.2%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 81.75 or 0.92% to 8,842.68, Hang Seng index in Hong Kong increased 678.75 or 4.55% closed to 15,580.16, CSI 300 index in China higher 20.35 or 0.77% closed to 2,676.87. ASX 200 index in Australia increased 81.30 or 2.21% closed to 3,752.90. The KL Composite index in Malaysia higher 12.30 or 1.31% closed to 953.71.

The Kospi Index in South Korea increased 4.37 or 0.33% to close at 1,342.63. JSE Index in Indonesia increased 29.86 or 1.94% closed to 1,570.26. The Markets of Thailand and India were close today.