Lihir Gold CEO Resigns, Tiger Air IPO

Darlington Musarurwa
18 Jan, 2010
New York City

Stocks in Australia recovered from earlier losses and closed fractionally higher. Weak international prices of metals affected the trading sentiment. Lihir Gold chief executive Hood resigned after the company did not renew his contract. Discount airline Tiger Airways IPO was fully subscribed.

[R]3:00 AM New York, 7:00 PM Sydney – Stocks in Australia recovered from earlier losses and closed fractionally higher. Weak international prices of metals affected the trading sentiment. Lihir Gold chief executive Hood resigned after the company did not renew his contract. Discount airline Tiger Airways IPO was fully subscribed.[/R]

Australian stocks snapped the downtrend in the morning session prompted by weaknesses in the global markets to close marginally up.

Financial stocks pushed the market higher lafter Commonwealth Bank reported earnings on Friday after the close.

However, commodity stocks declined as gold prices slipped 1.1% to $1,131 per ounce and crude oil prices decreased 0.3% to $77.8 per barrel.

In Sydney trading ASX 200 Index increased 0.2% or 11.5 to 4,911.10.

Of the ASX 200 index stocks 78 advanced, 107 fell, and 15 were unchanged. IOOF Holdings led gainers in the index shares with a gain of 7.1% after weekend reports ANZ might make a bid for the company.

The Australian dollar declined 0.1% to 92.14 U.S. cents.

Inflation Rises 0.3% in December

TD Securities-Melbourne Institute monthly inflation measure rose 0.3% in December after gaining 0.3% the previous month spurred by increases in spending for holidays, accommodation, travel, fuel and fruit and vegetables. Gains were offset by cheaper rent, books, newspapers, magazines and financial services.

On the overall, the inflation gauge increased 2.6% from a year earlier. However, official inflation figures will be released on January 27.

TD Securities senior strategist Annette Beacher said inflation has bottomed out and “early signals suggest some emerging upside pressure.”

“This shift justifies the recent rapid-fire adjustment to the cash rate by the RBA from 3 per cent to 3.75 per cent. Although we stress that this is still a very accommodative cash rate given the buoyant outlook for Australian growth,” Beacher said.

Lihir Gold CEO Aurthur Hood Resigns

Lihir Gold announced that the company has accepted resignation of chief executive officer Aurthur Hood. Chief financial officer Phil Baker has been appointed as interim chief executive.

Media reports suggest that Hood has been asked to resign for his “prickly” personality and his failed 2007 acquisition of Ballarat gold mine for A$350 million which led the the largest write down in the company history of A$350 million.

Former Sino Gold chief executive Jake Klein is considered a front runner for the position.

According to Chairman Gaurnet during Hood’s tenure gold production increased from around 600,000 ounces a year in 2005 to more than 1.1 million ounces in 2009, with diversified operations in Papua New Guinea, Australia and Ivory Coast, Africa.

Hood also paid A$1 billion to acquire Equigold NL in Ivory Coast.

Hood’s contract expires in September of this year but the company decided to not renew the contract and Hood said he will step down immediately. Hood will receive A$3.6 million in cash and the right to 3.5 million shares according to the statement issued by the company.

Tiger IPO Priced at S$1.50

The Australian reported that Tiger Airways priced its initial public offering to raise S$248 million or A$1.50 a share. the offering was fully subscribed.

Tiger Airways is 49% owned by Singapore Airlines and is due to list on the Singapore stock exchange this Friday.

ASX Movers

Aquarius Platinum Limited led the decliners in the S&P ASX 200 index with a loss of 4.5% followed by losses in Sims Metal Management Limited of 4.4%, in Energy World Corporation Limited of 4.0%, in Extract Resources Limited 3.9% and in Atlas Iron Limited 3.8%.

IOOF Holdings Limited led gainers in the S&P ASX 200 index with a rise of 7.1% followed by gains in Medusa Mining Limited 6.0%, in Fairfax Media Limited of 4.4% and in Roc Oil Company Limited of 4.2%.

Other Movers

Australia and New Zealand Banking Group Limited added 3.3% to A$23.17 after the lender begins marketing Samurai bonds in Japan next week, according to Bloomberg news.

BHP Billiton plc fell 0.4% to A$43.44 and the mining company said it plans to spend A$267 million on Queensland coking coal.

IOOF Holdings Limited increased 7.1% to A$45 on the speculation that ANZ will acquire the asset manager.

Lihir Gold Limited rose 0.9% to A$3.32 after the gold miner said that Chief Executive Arthur Hood has resigned and will step down immediately.