Australian Stocks Weaken; CBA Lift Rates

Darlington Musarurwa
04 Dec, 2009
New York City

Stocks in Australia declined as commodities prices faltered. CBA lifted rates on various loan products by as much as 0.5% following the decision of the Reserve Bank of Australia. Lend Lease considers buying ING Retail Property Fund.

[R]3:00 AM New York, 7:00 PM Sydney – Stocks in Australia declined as commodities prices faltered. CBA lifted rates on various loan products by as much as 0.5% following the decision of the Reserve Bank of Australia. Lend Lease considers buying ING Retail Property Fund.[/R]

Australian market averages fell on weaknesses on Wall Street and weakening commodity prices. However, commodity stocks were mixed with energy stocks rising and gold stocks declining.

Gold prices closed up 0.4% to $1,218.2 per ounce and crude oil prices advanced 0.4% to $76.9 per barrel.

In Sydney trading ASX 200 Index fell 1.5% or 72.40 to 4,702.20.

Of the ASX 200 Index stocks 33 rose, 151 fell, and 16 were unchanged. Paperlinx led advancers in the index shares with a rise of 4% followed by Isoft Corp gaining 3.6%.

The Aussie dropped 0.2% to 92.23 U.S. cents.

Lend Lease Considers Buying ING Retail

Lend Lease reported today in response to speculation by the Australian Financial Review that it is considering acquiring ING Retail Property Fund.

“Lend Lease’s involvement in the competitive process for the acquisition of the ING Retail Property Fund may or may not lead to a transaction,” said Lend Lease.

ING Retail Property Fund is valued at an estimated US$1.4 billion.

CBA Raises Rates by 37 basis points

Commowealth Bank today announced it will raise interest rates on a range of deposit accounts by up to 0.5% per annum and variable home loan accounts by 37 basis points per annum.

The complete home loan variable rate will rise 0.37% to 6.61% from 6.24% effective December 9.

CBA Group Executive, Retail Banking Services Ross McEwan said the sharp increase was driven by the increase in the key rate by the central bank and increases in wholesale funding costs.

Separately, Australia & New Zealand Banking Group reported today that it will increase its standard variable home loan rate to 6.66% effective Monday.

Westpac earlier raised its rate by 45 basis points to 6.75%.

On Tuesday, Reserve Bank of Australia hiked the benchmark interest rates by 25 basis points to 3.75%.

However, Treasury Secretary Wayne Swan censured CBA for the increase.

“I''ve said before there is no justification for Westpac and I believe there''s no justification for the Commonwealth Bank to move their rates above the official interest rate rise from the independent Reserve Bank,” Swan said.

Gainers & Losers

Paperlinx led gainers in the ASX 200 index shares with a rise of 4% followed by gains in Isoft Corp. of 3.6%, in Sundance Resources of 3.5%, in Sigma Pharmaceuticals of 3.1%, and Toll Holdings of 2.6%.

Energy stocks rose as crude oil prices edged up 0.4% to $76.9 per barrel. Roc Oil advanced 0.8% to A$0.64 and Carnarvon Petrol jumped 1% to A$0.52.

Molopo Energy led decliners in the ASX 200 Index stocks with a decline 6.6% followed by losses in Mincor Resources of 6.6%, in Austar United of 6.3%, in Elders Ltd of 6.3%, and Tabcorp Holdings of 5.6%.

Gold stocks fell. Avoca Resources tumbled 4.1% to A$2.11, Lihir Gold dropped 4.1% to A$3.53 and Sino Gold decreased 3.9% to A$8.08.

Other Movers

Aurox Resources Limited closed unchanged at A$0.27 after the mineral explorer may sell a half of shares in its planned A$1.3 billion iron ore mine in Australia to a Chinese partner to help fund the project.

iSOFT Group Limited, the health information technology company rose 3.5% to A$0.73.

James Hardie Industries N.V fell 3.7% to A$8.18.

Lend Lease Corporation Limited declined 0.1% to A$9.40 after the property developer confirmed on Friday that it is in talks to acquire ING Retail Property Fund, an Australian REIT.

Mincor Resources NL the mining and exploration of mineral resources dropped 6.5% to A$1.85.

Molopo Australia Limited the petroleum explorer fell 6.5% to A$1.42.

Newcrest Mining Limited the explorer fell 2.2% to A$38.30.

PaperlinX Limited the distributor of printing and publishing papers increased 4.0% to A$0.51.

Rio Tinto Limited decreased 2.2% to A$71.85 as the company and BHP approach the self-imposed deadline of December 5 to consummate their iron ore mining venture that may save as much as A$10 billion.