Australian Index Up 1.8%; AXA, AMP Proposal

Darlington Musarurwa
09 Nov, 2009
New York City

Stocks in Australia surged in a rally in Asian markets after the release of G-20 statement on Sunday. Australian home loan approvals rise 5.9% in September. Australia job adverts drop 1.7% in October. AXA Asia Pacific Holdings rejects A$11.04 billion bid from AMP.

[R]3:00AM New York, 7:00PM Sydney – Stocks in Australia surged in a rally in Asian markets after the release of G-20 statement on Sunday. Australian home loan approvals rise 5.9% in September. Australia job adverts drop 1.7% in October. AXA Asia Pacific Holdings rejects A$11.04 billion bid from AMP.[/R]

Australian market averages rose 1.8% led by Axa Asia Pacific after the firm received an unsolicited A$11.04 billion bid from AMP.

Investor sentiment was also buoyed by a government report indicating the country’s home loan approvals increased in September.

In Sydney trading ASX 200 Index rose 1.8% or 80.9 to 4,674.90.

Of the ASX 200 index stocks, 164 increased, 25 dropped, and 11 were unchanged. Axa Asia Pacific led advancers in the index shares with a rise of 32.6% after the company receiving an unsolicited.

The Aussie dollar rose 0.7% to 92.50 U.S. cents.

Australian Home Loan Approvals Rise in September

Australian Bureau of Statistics reported today the total value of dwelling finance commitments, excluding alterations and additions, rose 4.8% to A$23.8 billion in September from a month ago.

Owner occupied housing finance jumped 6.7% to A$17.6 billion.

The ABS also noted that the number of loans granted to buy or build houses or apartments increased 5.9% to 65,505 in September from a month earlier.

Construction of dwellings advanced 8% to 7,221 in the period, while the purchase of new dwellings declined 0.6% to 2,745.

However, the purchase of established dwellings gained 5% to 55,538.

Australia Job Ads Fall 1.7%

Australia & New Zealand Banking Group reported today the total number of jobs advertised in major metropolitan newspapers and on the internet fell by 1.7% to 133,709 per week in October after rising 4.4% the previous month.

Total job advertisements also declined 42.3% from the same period a year ago.

Job advertisements in major metropolitan newspapers fell by 1.4% to an average 8,800 per week in October from a 3.7% increase in September and declined 33.8% from a year earlier.

Increases in newspapers job advertisements in September were in Tasmania 7.4%, South Australia 2.7%, New South Wales 2.1%, and the Northern Territory 1.1%.

Western Australia dropped 6.3%, the ACT 5%, Queensland 2.3% and Victoria 0.2%.

According to the report, Internet job ads fell 1.8% to an average 124,909 per week but remained 42.8% from the same period a year earlier.

ANZ acting chief economist Warren Hogan said the slide indicates that Australia’s economic growth “is still vulnerable to set backs”.

“These results suggest that the economy remains soft and is only at an early stage of recovery,” said Hogan.

Axa Asia Pacific Rejects A$11.04 billion AMP bid

Axa Asia Pacific Holdings reported today that it has rejected the unsolicited and conditional scheme proposal from AMP Ltd and Axa SA, Axa APH’s largest shareholder because “the proposal is inadequate and is not in the best interests” of minority shareholders.

The bid was made on November 7.

Under the proposal, AMP will acquire all the shares in Axa APH, including those held by Axa SA, while the Asian operations of Axa APH would be sold to Axa SA.

The cash and equity takeover bid was priced at A$5.34 per Axa APH share for minority shareholders, which is a 24% premium to Friday’s closing price.

Axa APH chairman Rick Allert said, “It is the unanimous view of the Independent Board Committee that the proposal significantly undervalues Axa APH. The proposal has been received against the backdrop of recent weaknesses in the global financial markets and before the growth of our Asian operations is fully reflected in our profitability.”

Gainers & Losers

Axa Asia Pacific led advancers in the ASX 200 index stocks with a rise of 32.6% followed by increases in Sundance Resources of 10%, in Virgin Blue Holdings of 8.6%, in Paperlinx of 8%, in Medusa Mining of 8%.

Sundance Resources gained after gold prices advanced 0.6% to 1,096 per ounce.

Babcock & Brown led decliners in the ASX 200 index stocks with a drop of 5.4% followed by losses in Resmed Inc-CDI of 4%, in ING Office Fund of 2.7%, in Macquarie Media of 2.7%, and Viterra-CDI of 2.4%.

AXA Asia Pacific Holdings Limited surged 32.5% to A$5.70 after the company rejected an A$11 billion proposal.

Commonwealth Bank of Australia increased 4.5% to A$55.08.

GrainCorp Limited decreased 3.1% to A$6.5.

Macquarie CountryWide Trust the property trust engaged in investing in the retail property market rose 3.4% to A$0.59.

Murchison Metals Limited the mineral explorer surged 14.1% to A$1.58.

National Australia Bank Limited climbed 2.9% to A$29.60.

Transurban Group added 0.3% to A$5.57 after the toll-road operator said shareholders are falling behind the board''s decision to reject a A$6.7 billion takeover offer from two of Canada''s biggest pension funds, raising pressure on the suitors to increase their bid.

Westpac Banking Corporation decreased 1.0% to A$26.28

Energy stocks dropped after crude oil prices fell 2.8% to $77.40 per barrel.