Fewer Home Loans in Australia; CSR Bid

Darlington Musarurwa
12 Jan, 2010
New York City

The benchmark index in Sydney declined after mortgage loans in November fell 5.6%. The decline in loan commitments surprised most economists. Resource stocks closed higher after commodities prices gained in international markets. China based Bright Foods offered $1.5 billion for sugar unit of CSR.

[R]3:00 AM New York, 7:00 PM Sydney – The benchmark index in Sydney declined after mortgage loans in November fell 5.6%. The decline in loan commitments surprised most economists. Resource stocks closed higher after commodities prices gained in international markets. China based Bright Foods offered $1.5 billion for sugar unit of CSR.[/R]

Australian stocks fell after mortgage loans in November declined 5.6% and a weakness in commodities stocks. Alcoa Inc reported narrower loss but still missed expectations.

However, commodity stocks pared losses as gold prices soared 1.1% to $1,151 per ounce and crude oil prices advanced 0.4% to $83 per barrel.

In Sydney trading ASX 200 Index fell 1% or 51.2 to 4,899.50.

Of the ASX 200 Index stocks, 39 increased, 143 fell, and 18 were unchanged. Gud Holdings led gainers in the index shares with rise of 5.8% followed by CSR jumping 4.3% after a bid from Chinese food producer Bright Food Group to acquire its sugar and renewable energy business.

Australia’s Housing Finance Falls 1.6% to A$22.8 billion

Australian Bureau of Statistics reported today the total value of dwelling finance commitments, excluding alterations and additions, fell 1.6% to A$22.8 billion in November from a month ago.

Owner occupied housing declined 2.9% to A$16.5 billion.

The ABS noted that the number of dwelling commitments for owner occupied housing finance dropped 5.6% to 59,516 units and dwelling commitments for construction of dwellings fell 6.5% to 7,485 units.

In addition, number of dwelling commitments for the purchase of new dwellings decreased 5.1% to 2,456 units and commitments for purchase of established dwellings plunged 5.4% to 49,574 units.

Bright Food to Acquire CSR Renewable Energy Business

Bright Food Group announced today that it intends to acquire CSR’s sugar and energy renewable business for $1.5 billion.

The Chinese food producer says it has proposed an all-cash bid but didn’t have all the information needed to make a final valuation.

However, CSR has said the proposal from the company was a mere expression of interest, adding that it will forge ahead with its planned demerger.

CSR announced in June it planned to split its sugar and renewable energy business from the remainder of the company.

Bright Food noted it is prepared to discuss a transaction with CSR''s joint venture partner Mackay Sugar similar to CSR''s proposal to acquire the remaining 25% of the sugar refining joint ventures in Australia and New Zealand from Mackay.

Alcoa Q4 Loss of $277 million

Alcoa’s fourth quarter 2009 loss was $277 million, or $0.28 per share, including the unfavorable impact of $25 million for restructuring, special items and discrete items. Loss in the quarter a year ago was $1.19 billion or $1.49 a share.

Fourth quarter revenues increased 18% to $5.7 billion from the previous quarter to $5.4 billion in the same period a year ago.

Cash flow from operations was $1.1 billion and finished the quarter with $1.5 billion of cash. Deb to equity ratio declined to 38.6%, 390 basis points decline.

For the full year, 2009 revenues fell 31.5% to $18.4 billion from $26.9 billion in 2008, while loss from continuing operations was $985 million.

The company recorded a net loss of $1.15 billion, or $1.23 per share, for the year, compared with a net loss of $74 million a year earlier.

ASX Movers

Southern Cross Media Group led the decliners in the S&P ASX 200 index with a loss of 5.5% followed by losses in Lynas Corporation Limited of 5.4%, in Kagara Ltd of 5.1%, in Minara Resources Limited 5.0% and in Panoramic Resources Limited 5.0%.

GUD Holdings Limited led gainers in the S&P ASX 200 index with a rise of 5.8% followed by gains in CSR Limited 4.3%, in Platinum Australia Limited of 3.8% and in Avoca Resources Limited of 2.3%.

Other Movers

Alumina Limited slipped 4.8% to A$1.96 after the US based company, Alcoa which has a joint venture with the company reported a loss of $277 million after it was forced to buy aluminium in the open market at a higher price to meet customer demand.

Australand Property Group the diversified property group decreased 2.8% to A$0.51.

CSR Limited added 4.3% to A$2.05 after Bright Food Group Co based in Shanghai, offered as much as A$1.5 billion cash for company’s sugar unit.

BHP Billiton plc the mining company decreased 2.2% to A$43.49.

Goodman Group the real estate investment trust fell 1.5% to A$0.63.

GUD Holdings Limited increased 5.8% to A$9.47 after the maker of Victa lawn mowers and Sunbeam electrical appliances expects its first half 2010 earnings before interest and tax to be 10% above the period a year ago.

Leighton Holdings Limited the construction company dropped 1.8% to A$40.51.

Macquarie Airports dropped 2.2% to A$2.99 after the operator of airports was downgraded to “hold” from “buy” at ABN Amro Holding NV.

Newcrest Mining Limited the gold miner rose 1.2% to A$37.28 after international gold prices surged. Platinum Australia Limited, the owner of mines in South Africa and Australia increased 3.8% to A$1.22.

PO Valley Energy Limited the natural gas explorer in Italy rose 1.8% to A$1.69.

Ramsay Health Care Limited rose 2.2% to A$11.45 after the private hospital operator was upgraded to “buy” from “neutral” at UBS AG.

Rio Tinto Limited the mining company declined 2.0% to A$78.37.

Stockland Corporation Limited the housing developer fell 2.2% to A$3.93.