Australian Dollar, Bond Yields Rise

123jump.com Staff
19 Jun, 2009
New York City

Australian dollar gained against the U.S. dollar and Japanese yen as short term yields rise above 3%, the highest since March. The Australian government priced A$770 million bonds at a higher yields that drew mostly domestic investors.

[R]8:00 PM Sydney, 6:00 AM New York – Australian dollar gained against the U.S. dollar and Japanese yen as short term yields rise above 3%, the highest since March. The Australian government priced A$770 million bonds at a higher yields that drew mostly domestic investors.[/R]

The ASX 200 index in Australia increased 7.50 or 0.19% to 3,899.60.

Australian dollar rose against the U.S. dollar for the third day in a row as the government bond auction draw investors and appetite for risk increase among investors.

The Australian currency Aussie as known generally increased 0.7% to 80.39 U.S. cents. The short term yields on Australian notes reached 3.09%, the highest since March 5.

Australian Bond offering at 4.53%

Australian government sold A$700 million bonds maturing in 2012 that yielded 4.53%. The auction primarily attracted domestic investors and bid-to-cover ratio was 1.9, lower than expected.

The yields on 10-year bonds increased 18.8 basis points to 5.79%.

Australia plans to sell government bonds every Wednesday and Friday and each tender will be up to A$800 million. For the current fiscal year ending in June the government plans to raise A$30 billion and in the fiscal year 2010 plans to raise A$60 billion.

Treasury notes auctions are conducted every Thursday and the size of auctions are much smaller and vary with the government needs.

Gainers & Losers

Westfield Group ((WFC)) declined 1.8% to A$11.01 after the company said it in negotiations with bank for future loans.

Rio Tinto Limited decreased 3.4% to A$50.72 as the company is in a $15.2 billion rights offering to repay debt.

Eastern Star Gas increased 4.3% to 84 Australian cents after crude oil prices increased for the third day in a row. The company also announced at coal seams gas production pilot has reached to 250,000 standard cubic feet a day and water production continues to increase to 3,500 barrels a day. Dewatering at six wells started in May and gas production rate will continue to climb. The U.S. based Gastar Exploration ((GST)) owns 35% stake in the field.

Santos Ltd ((STOTY)) increased 1.2% to A$14.88 after the company signed a deal to sell Malaysia based Petronas Gas to sell liquefied natural gas.

Leighton Holdings Ltd increased 4% to A$22.97. The company recently canceled its joint venture with the UAE based construction company and has been under pressure to increase its earnings. The recent rebound in the markets drew speculations that some of these projects may be restarted as the crude oil prices have rebounded.


ASX 200 Index Movers

ING Office Fund led the decliners in the ASX 200 index of 11.7% followed by losses in Elders Ltd of 10.3%, in Gloucester Coal Ltd of 9.3%, in Valad Property Group of 8.7% and in Kagara Ltd of 7.8%.

Australand Property Group led gainers in the ASX 200 index with a rise of 16.6% followed by gains in Sunland Group Ltd of 10.4%, in BlueScope Steel Ltd of 9.1% and Asciano Group of 8.0%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 82.54 or 0.85% to 9,786.26, Hang Seng index in Hong Kong increased 144.27 or 0.81% to 17,920.93, CSI 300 index in China higher 22.57 or 0.74% to 3,080.00. ASX 200 index in Australia increased 7.50 or 0.19% to 3,899.60. The KL Composite index in Malaysia closed higher 5.09 or 0.48% to 1,059.50.

The Kospi Index in South Korea increased 7.58 or 0.55% to close at 1,383.34.SET index in Thailand closed higher 18.55 or 3.25% to 588.98 and JSE Index in Indonesia increased 39.48 or 2.02% to 1,990.47. The Sensex index in India increased 256.36 or 1.80% to 14,521.89.