Australian Companies Raise A$90 Billion

123jump.com Staff
06 Jul, 2009
New York City

Australian stocks drop after commodities prices declined. Rio Tinto agreed to sell its flexible packaging division for $1.2 billion to Bemis. Australian companies raised A$90 billion in the financial year that ended in June 2009.

[R]6:00 PM Sydney – Australian stocks drop after commodities prices declined. Rio Tinto agreed to sell its flexible packaging division for $1.2 billion to Bemis. Australian companies raised A$90 billion in the financial year that ended in June 2009.[/R]

ASX 200 index in Australia decreased 44.50 or 1.16% to 3,783.70.

Rio Tinto sold its American packaging division to Bemis for US$1.2 billion to lower its debt. Rio acquired the food packaging division as a part of its 2007 purchase of Canadian aluminum maker Alcan for $38 billion.

Bemis will pay $1 billion in cash and $200 million equity.

Rio Tinto recently completed US$15.2 billion in rights offering and has sold several businesses to lower its total debt of US$39 billion. The company is scheduled to repay US$8.9 billion in August.

Companies Raised $90 Billion

The market rebound in the second calendar quarter lifted the capital raised from investors in the financial year ending in June 2009.

For the year total of $90 billion were raised compared to $77.9 billion in the previous financial year. Of the total, secondary listing surged 74$ to $88.1 billion and initial public offering plunged 83% to $1.93 billion.

The average daily trading volume declined 30% from a year ago to $4.4 billion.

Only 45 new companies were listed on the Australian Stock Exchange compared to 236 in the previous financial year.

In June, companies raised a total of $10.2 billion, up 95% from a year ago month. In the month, secondary listing raised $10.1 billion and initial offering raise $77.3 million.

In June 2009 only one company was listed compared to 14 in June 2008.

Job Ads Decline

The job listings in leading cities newspapers and on the Internet declined 6.7% in June from May to a weekly average of 127,346 according the data released after the market close by ANZ.

The Internet ads fell 7.2% in June and for the year ending in the month dropped 51.5% and newspaper ads increased 0.9% in June but declined 50.7% from a year ago.

The Australian Bureau of Statistics is scheduled to release June unemployment rate on this Thursday. ANZ estimates the rate to rise to 5.9%.

Gainers & Losers

The weakness in metals and energy prices pulled stocks lower in Sydney trading.

BHP Billiton dropped 81 cents to $32.62 and Rio Tinto dropped $1.10 to $48.50 after it sold Alcan Packaging Food Americas division for $1.5 billion (or US$1.2 billion).

Zinc Mining company Terramin Australia increased 66% or $ cents to 67 cents after it reported production surge of more than 100% at its Angas mine in South Australia.

Santos declined 56 cents to $13.56 and Woodside Petroleum fell 58 cents to $40.85.

Bank stocks declined. ANZ declined 17 cents to $15.98, Commonwealth Bank dropped 14 cents to $37.05 and National Australia Bank edged 2 cents lower to $21.83.

ASX 200 Index Movers

Murchison Metals Limited led decliners in the ASX 200 index of 10.9% followed by losses in AJ Lucas Group Limited of 8.3%, in Karoon Gas Australia Ltd of 8.2%, in Extract Resources Limited 7.4% and in Equinox Minerals Ltd of 7.0%.

Macquarie Office Trust led gainers in the ASX 200 index with a rise of 5.2% followed by gains in Carnarvon Petroleum Ltd of 5.0%, in ConnectEast Group of 5.0% and ING Office Fund of 4.3%.

Asian Markets Review

The Nikkei 225 Average in Tokyo closed lower 135.20 or 1.38% to 9,680.87, Hang Seng index in Hong Kong decreased 223.99 or 1.23% to 17,979.41 and CSI 300 index in China closed higher 47.62 or 1.43% to 3,374.75. ASX 200 index in Australia decreased 44.50 or 1.16% to 3,783.70. The KL Composite index in Malaysia closed lower 6.86 or 0.64% to 1,065.83.

The Kospi Index in South Korea increased 8.90 or 0.63% to close at 1,428.94. JSE Index in Indonesia decreased 40.29 or 1.94% to 2,035.01. The Sensex index in India decreased 869.65 or 5.83% to 14,043.40. The Thailand markets were closed today.