BHP Indicates Softer China Demand; Uranium Up

Mayank Mehta
21 Oct, 2009
New York City

BHP Billiton reported higher oil and iron ore production in the third quarter but indicated softer demand from China. Centro Properties was sued by the Australian regulators. A significant number of shareholders registered protest to the remuneration of its former chief executive.

[R]8:30 PM Sydney, Australia – BHP Billiton reported higher oil and iron ore production in the third quarter but indicated softer demand from China. Centro Properties was sued by the Australian regulators. A significant number of shareholders registered protest to the remuneration of its former chief executive. Uranium prices are expected to remain high.[/R]

The Australian benchmark stock index closed higher and traded at recent highs as investors remain optimistic of Chinese metals demand and global economic recovery.

BHP Billiton in its quarterly output reported improved production at its Western Australia mines but also alerted that Chinese demand for the rest of the year is expected to be softer.

Third quarter oil production increased 18% to 41.21 million barrels and oil and natural gas production is expected to increase 10% for the year. Iron ore production at mines in Pilbara region increased 11% to 30.1 million tons.

ASX 200 index in Australia decreased 7.60 or 0.16% to 4,838.60 and of the stocks in index, 86 increased, 92 declined and 22 were unchanged.

The Australian dollar declined 0.3% to 92.07 U.S. cents.

ASX Movers

Babcock & Brown Infrastructure Group led the decliners in the S&P ASX 200 index with a loss of 5.0% followed by losses in Viterra Inc-CDI of 4.4%, in Minara Resources Limited of 4.2%, in Nexus Energy Limited 3.9% and in AWB Limited 2.7%.

Virgin Blue Holdings Limited led gainers in the S&P ASX 200 index with a rise of 8.8% followed by gains in Alesco Corporation Ltd 7.9%, in Aquila Resources Limited of 7.8% and in Transfield Services Limited of 6.7%.

Other Movers

Alesco Corporation Ltd surged 7.9% to A$5.85.

BHP Billiton decreased 8 cents to A$39.83 and Rio Tinto fell 20 cents to close at A$66.60.

Babcock & Brown Infrastructure Group the specialist infrastructure company fell 5% to A$0.03.

Centro Properties Group decreased 7.8% to A$0.35 after the property group received ASIC civil action notice and alleged that the company misled shareholders by incorrectly classifying A$2 billion of debts. Centro Chairman Paul Cooper and independent director Jim Hall said that they will not step down from the board and “vigorously defend” the regulatory action.

Centro board members face fines of A$200,000 and disqualification from the corporate activity for as long as 20 years.

Macquarie Media Group added 6.6% to A$2.42.

Paladin Energy Ltd advanced 5.4% to A$5.06 after the uranium producer in Africa and Australia said that the uranium prices have traded higher after production difficulties at Olympic Dam mine in Australia.

Qantas closed unchanged at A$2.99 after shareholders approved A$3 million payment to its former chief executive that the company says is a part of contractual obligation. At a non-binding proxy vote, 850.36 million votes were in favor but a significant 629.56 votes rejected the remuneration. Qantas recently announced management and operations job cuts of 1,840 equivalent positions.

Ten Network Holdings Limited climbed 1.6% to A$1.59 after the broadcaster said that BT Investment Management Limited has a holding interest of 52,589,118 ordinary shares representing 5% issued share capital.

Virgin Blue Holdings Limited rose 8.8% to A$0.55 after the airline was upgraded to “buy” from “hold” at Royal Bank of Scotland Group Plc.

Woolworths Limited fell 1.5% to A$29.80 after the retailer was downgraded to “neutral” from “outperform” at Credit Suisse Group AG.