Australian Retail Sales Fell; Westpac Warns

Darlington Musarurwa
04 Nov, 2009
New York City

Australian retail sales fell 0.2% in September and building approvals increased 2.7%. Service industry expands in October. Westpac warns of credit crunch and second half profit declined 10% to A$2.33 billion. Gold miners surged as gold closes at a record high.

[R]8:00 PM Sydney - Australian retail sales fell 0.2% in September and building approvals increased 2.7%. Service industry expands in October. Westpac warns of credit crunch.[/R]

Australian stocks rose fractionally on mixed economic indicators. While retail sales dropped in September, building approvals gained, according to government reports.

The service industry expanded in October.

In Sydney trading ASX 200 Index rose 0.2% or 8.6 to 4,540.10.

Of the ASX 200 index stocks, 77 increased, 110 dropped, and 13 were unchanged. Kingsgate Consolidated led gainers in the index shares with a rise of 10.4% followed by St Barbara rising 7.8%.

September Retail Sales Fall 0.2%

Australian Bureau of Statistics reported today that the retail sales fell 0.2% to A$19.7 billion in September from a revised 0.7% increase the previous month.

In trend terms, food retailing rose 0.4%; household good retailing increased 0.2%; clothing, footwear and personal accessory retailing edged up 0.4%.

However, other retailing remained unchanged.

Building Approvals Rose 2.7%

Separately, the statistics bureau reported that the number of total dwellings approved gained 2.7% in September.

Private sector housing approvals advanced 0.3%, rising for the eighth successive month.
Approvals in Western Australia increased 3.2%, in Victoria added 2.4%, but in Queensland fell 5.4%.

The value of total building approved declined 22.4% in September from the previous month, with non-residential buildings dropping 37.7% to A$3.3 billion.

In addition, the value of new residential building work rose 0.8%, while the value of alteration and additions to residential property fell 1%.

Australia Service Industry Rises in October

The Australia Industry Group/Commonwealth Bank Performance of Services Index today rose by 5.5 points to 54.8 in October driven by rising demand for retail goods and personal and recreational services. A reading above 50 shows expansion.

Seven out of nine sub-sectors rose in the month from five in September.

The AIG chief executive Heather Ridout said housing related sectors such as finance & insurance & property and business services are experiencing a period of growth.

“Consolidating the improvement remains the challenge with the underlying strength of private demand still uncertain,” said Ridout.

Westpac Second Half Profit Falls 10%

Westpac Banking Corp reported today that its cash earnings fell to A$2.33 billion in the second half period ended September from A$2.61 billion in the same period a year ago.

The impairment charges increased to A$1.68 billion and total provisions for impairment charges jumped to A$4.73 billion from A$4.48 billion recorded in March.

Westpac chief executive officer Gail Kelly warned there will be a further credit crunch if the regulators continued with plans for expanded liquidity buffers and bank capital after the global credit crisis.

Gains & Losers

Energy stocks after investors opted for gold prices which gained 2.9% to $1,085 after Reserve Bank of India purchased 200 tons of gold from the International Monetary Fund. Nexus Energy fell 6.3%, Mincor Resources declined 3.3% and Carnarvon tumbled 2.8%.

ASX Movers

Nexus Energy Limited led the decliners in the S&P ASX 200 index with a loss of 6.2% followed by losses in Babcock & Brown Infrastructure Group of 5.2%, in PaperlinX Limited of 3.8%, in Ausenco Limited 3.6% and in Boart Longyear Limited 3.5%.

Kingsgate Consolidated Limited led gainers in the S&P ASX 200 index with a rise of 10.4% followed by gains in St Barbara Limited 7.8%, in West Australian Newspapers Holdings Limited of 6.5% and in Avoca Resources Limited of 5.5%.

Other Movers

Australia and New Zealand Banking Group Limited rose 0.6% to A$22.73. Ausenco Limited, the engineering designer fell 3.6% to A$4.46.

Babcock & Brown Infrastructure Group, the specialist infrastructure company dropped 5.2% to A$0.03.

St Barbara Limited, gold miner increased 7.8% to A$0.34 and Kingsgate Consolidated Limited, gold miner surged 10.3% to A$8.39. Newcrest Mining Limited the gold producer rose 3.2% to A$34.45.

Nexus Energy Limited the oil and gas company decreased 6.2% to A$0.30.

PaperlinX Limited the distribution and sale of printing and publishing papers dropped 3.8% to A$0.50.

West Australian Newspapers Holdings Limited rose 6.5% to A$8.00 and may plan to charge for the content online.