Australian Current Account Deficit Rises

Darlington Musarurwa
08 Dec, 2009
New York City

Australia

[R]3:00 AM New York, 7:00 PM Sydney - Australia’s current account deficit soars 23% to A$16.2 billion in September and business confidence rises in November. Stocks decline after crude oil and gold prices edge lower.[/R]

The benchmark stock index fell 0.1% in Australia after the current account deficit widened in the third quarter, according to a government report.

Commodity stocks also dragged the market as gold prices extended losses, dropping 0.5% to $1,164 an ounce and crude oil prices slipped 2.2% to $73.8 per barrel.

In Sydney trading ASX 200 Index fell 0.1% or 5.9 to 4,670.60.

Of the ASX 200 index stocks, 70 rose, 118 dropped, and 12 were unchanged. Paperlinx led gainers in the index shares with a rise of 8.8% followed by Elders Ltd. increasing 6.7%.

Australia’s Current Account Deficit Rises 23% in Q3

Australian Bureau of Statistics reported today the country’s current account deficit rose 23% to A$16.2 billion in the three months to September.

The deficit on the balance on goods and services rose from A$1.2 billion in the June quarter to A$5.4 billion in September.

According to the report, there was a turnaround of A$4.8 billion on the June quarter surplus on goods and services, which is forecasted “to detract 1.8 percentage points from growth in the September quarter 2009 volume measure of GDP.”

Exports of coal declined 11% in the three months to September, while metal ores, including iron ore, fell 4%. Gold shipments dropped 12% and rural goods slid 11%. However, imports of vehicles soared 17%.

Business Confidence Rise in November

National Australia Bank reported today the country’s business confidence gained three points to 19, rising the most since 2002.

NAB forecasts that economic growth will likely rise 0.9% in the third quarter from the previous quarter and ease 0.5% in the fourth quarter.

Australia’s GDP figures will be released on December 16.

Chevron in Talks with Korean Gas

The Australian reported today that Chevron President John Gass is in discussions with Korea Gas about LNG supply from Wheatstone. An announcement is expected next year.

The company announced on Saturday it had a preliminary agreement to sell 4.1 million tons of LNG to Japan’s Tokyo Electric Power for more than 20 years.

Gainers & Losers

Paperlinx led gainers in the ASX 200 index stocks with a rise of 8.8% followed by increases in Elders Ltd. of 6.7%, in Asciano Group of 3.9%, in Incitec Pivot Ltd of 3.9%, and Mirvac Group of 3.6%.

Other resource stocks gained. Sundance Resources climbed 3.5% to A$0.15 and Equinox Mine-CDI jumped 3.4% to A$4.31.

Energy World Corp. led decliners in the ASX 200 index stocks with a decline of 5.1% followed by losses in Mount Gibson Iron of 4.6%, in St Barbara Ltd. of 4.4%, in Cudeco Ltd. of 4.1%, and Gud Holdings Ltd of 4.1%.

Molopo Energy dropped 2.2% to A$1.32 and Platinum Australia tumbled 2.6% to A$0.94.

Other Movers

Asciano Group increased 3.8% to A$1.75 after the ports and rail road operator said Isaac Plains Coal Management Pty Limited, a joint venture between the company and Vale, has executed a long term, take or pay contract for the haulage of coal by rail in Queensland commencing July 1, 2010.

CuDeco Limited the mineral explorer dropped 4.1% to A$4.90.

Elders Limited the provision of services and inputs to the rural sector climbed 6.6% to A$0.16.

Energy World Corporation Limited an exploration company decreased 5.1% to A$0.37.