Australia Rebounds; Sims, Macquarie Earnings

123jump.com Staff
30 Oct, 2009
New York City

Australian stocks tracked higher as the markets in Asia gained on the rise in New York and Europe. Macquarie Group first half net dropped 21% as write-offs related to bad loans surged to A$414 million. Sims Metal Management first half net plunged 77%.

[R]3:00AM New York, 7:00PM Sydney – Australian stocks tracked higher as the markets in Asia gained on the rise in New York and Europe. Macquarie Group first half net dropped 21% as write-offs related to bad loans surged to A$414 million. Sims Metal Management first half net plunged 77%.[/R]

Stocks in Australia regained some of the losses this week after the U.S. GDP expanded at 3.5% in the third quarter. The increase in the GDP was widely expected but most economists were looking for 3% rise. Markets in Asia gained as well.

Commodity stocks also gained as crude oil prices edged up 3% to $79.90 per barrel and gold prices advanced 1.6% to $1,047 per ounce.

In Sydney trading ASX 200 Index increased 1.5% or 68.5 to 4,643.20.

Of the ASX 200 Index stocks, 150 gained, 42 declined, and 8 were unchanged. Goodman Group led gainers in the index shares with a rise of 10.7% followed by Macquarie Office jumping 10.3%.

The Australian dollar fell 0.03% to 91.44 U.S. cents.

Australia’s Bank Lending Drops 0.2% in September

Reserve Bank of Australia reported today total credit provided to the private sector by financial institutions declined 0.2% in September after increasing 0.2% in the previous month.

However, lending increased 1.7% from a year ago month.

Housing credit gained 0.7% in September after rising 0.8% in August and advanced 7.7% from a year ago on “growth in lending to owner-occupiers and investors.”

According to the RBA, other personal credit dropped 0.2% in September from a 0.4% increase a month earlier. But personal credit fell 5.6% from a year ago. Business credit declined 1.3% from a month earlier and fell 4.6% from the same period a year ago.

The report also notes that money supply growth, M3, fell 0.2% and broad money edged down 0.3%.

Macquarie H1 Profit Falls 21%

Australia’s largest investment bank, Macquarie Group reported today its first half profit ended September declined 21% to A$479 million from the comparable year ago period.

Profit was up 79% from the previous half.

In the period, write-downs, impairments, equity accounted gains and losses and one-off items soared to A$414 million.

The lender acquired U.S. fund manager Delaware Investments and US financial services sector specialist advisory firm FPK, including Canadian investment dealer Blackmont Capital.

A first half dividend of A$0.86 per share was declared, but was below A$1.45 per ordinary share in the corresponding period last year.

Chief executive officer Nicholas Moore says the bank will “continue to maintain a cautious stance with a conservative approach to funding and capital.”

Separately, Macquarie Infrastructure Group announced that it will split its portfolio into two separate entities in order to protect and enhance security holder value.

After the restructure, the group will have a standalone entity holding MIG assets with 407 ETR and Westlink M7, while a Macquarie-managed unit will retain MIG assets, M6 Toll, APRR, Chicago Skyway, Indiana Toll Road, South Bay Expressway, Dulles Greenway, Warnow Tunnel and Transtoll.

Gainers & Losers

Sundance Resources increased 6.9% as crude oil prices climbed 3% to $79.9 per barrel and gold prices advanced 1.6% to $1,047 per ounce. OZ Minerals climbed 6.7% and Gindalbie Metals gained 6.6%.

ASX Movers

Crane Group Limited led the decliners in the S&P ASX 200 index with a loss of 12.2% followed by losses in Macquarie Media Group of 8.6%, in Goodman Fielder Limited of 3.5%, in GUD Holdings Limited 3.0% and in Paladin Energy Ltd 2.8%.

Goodman Group led gainers in the S&P ASX 200 index with a rise of 10.7% followed by gains in Macquarie Office Trust 10.3%, in ING Office Fund of 10.0% and in CSR Limited of 6.9%.

Other Movers

BHP Billiton plc climbed 0.8% or 32 cents to $37.45 after the company and Indonesia based PT Tambang Batubara Bukit Asam Tbk are still negotiating to form a consortium.

Crane Group Limited plunged 12.2% to A$9.04 after the pipeline distributor estimated first half earnings of nearly half compared to a year ago period.

CSR Limited the manufacture and supply of building products rose 6.9% to A$1.92.

Goodman Group the investment in directly and indirectly held industrial property surged 10.7% to A$0.62.

Goodman Fielder Limited the marketing and distribution of food ingredients dropped 3.5% to A$1.61.

Macquarie Group Limited added 1.5% to A$50.00 an investment bank said first-half net interest income fell 18.3% to A$425 million from $520 million a year ago. Net profit for the first-half fell 21% to A$479 million or 149.6 cents per diluted share compared to net profit of A$604 million or 215.2 cents per share a year ago.

Macquarie Media Group fell 8.6% to A$1.85 after the company said it is optimistic about the business in the medium terms.

Rio Tinto Limited advanced 4.5% to A$63.78 and the company appointed David Peever as new Australian managing director.

Sims Metal Management Limited slipped 1.8% to A$19.82 after the recycling company said first quarter sales fell 49% to A$1.8 billion from A$3.5 billion a year ago. Net profit for the first-half fell 77% to A$33.3 million compared to net profit of A$145.1 million a year ago.