Australian Weak Opening; Westfield $700 M Debt

Darlington Musarurwa
27 May, 2009
New York City

Australian stocks are expected to trade lower after a weak close in New York and a rise in bond yields. Crude oil traded as high as $63 a barrel after Saudi minister estimated price above $75 by the end of the year. Westfield Group unit completes $700 million debt offering.

[R]9:00 AM Sydney, 7:00 PM New York – Australian stocks are expected to trade lower after a weak close in New York and a rise in bond yields. Crude oil traded as high as $63 a barrel after Saudi minister estimated price above $75 by the end of the year. Westfield Group unit completes $700 million debt offering.[/R]

Australian stocks are expected to open lower with the weak closing in New York and a rise in crude oil prices. U.S. stocks closed lower after the U.S. completed debt auction and raised $35 billion. The government is set to raise $171 billion this week and complete $2.09 trillion of auction in 2009.

The huge debt offering turned stocks weak in the afternoon trading as yields on bonds rose and investors worry about the size of the offering and a possible rise in inflation.

Crude oil also surged above $63 a barrel in intra-day trading in New York after the Saudi Oil Minister Ali al-Naimi forecasted $75 a barrel before the end of the year.

Gainers & Losers

In Wednesday’s trading stocks in Australia edged slightly higher. The ASX 200 index increased 12.70 or 0.34 % closed to 3,801.10.

Westfield Group increased 2.8% to A$10.61 after its shopping center developer issued $700 million five-year notes in the U.S. The notes will be for five years and pay fixed interest rate of 7.5%.

Mirvac Group, a commercial and industrial real estate developer increased 6.5% to A$1.06 after the company rating was revised higher at JP Morgan Chase & Co.

Crane Group Ltd declined 5.2% to A$9.60 after Credit Suisse lowered its rating on the stock. Five weeks ago the company completed A$40 million of private placement with institutional investors. The company plans to use the proceeds to acquire pipe and plumbing suppliers.

ASX 200 Index Movers

Boart Longyear Group led the decliners in the ASX 200 index of 7.1% followed by losses in Emeco Holdings Limited of 5.4%, in Crane Group Limited of 5.2%, in Valad Property of 5.1% and in Murchison Metals Limited of 4.4%.

ING Industrial Fund led gainers in the ASX 200 index with a rise of 14.6% followed by gains in Macquarie Office Trust of 12.9%, in Goodman Group. of 11.3% and Abacus Property Group of 9.6%.