Myer, Australia Stocks Fall on Weak Retail Sales

123jump.com Staff
04 Feb, 2010
New York City

Stocks in Australia edged lower after weaker than expected retail sales and a weak global markets sentiment. Australia

[R]3:00 AM New York, 7:00 PM Sydney – Stocks in Australia edged lower after weaker than expected retail sales and a weak global markets sentiment. Australia’s retail sales fell 0.7% and home sales rose 3.1% in December. Myer Holdings, the recently listed retailer said first half sales revenue rose 2.1%.[/R]

Stocks in Australia declined 0.6% dragged by a government report showing retail sales decreased in December. Myer Holdings, the retailer results also disappointed investors.

Losses were however pared by increasing home sales in the month.

In Sydney trading ASX 200 Index fell 0.6% or 26.3 to 4,621.60.

Of the ASX 200 index stocks, 69 gained, 117 dropped, and 14 were unchanged. Platinum Australia led gainers in the index shares with a rise of 4.4% followed by Extract Resources rising a similar 4.4%.

The Australian dollar declined 0.4% to 87.91 US cents.

Retail Sales Fall 0.7% in December

Australian Bureau of Statistics reported that the country’s retail sales fell 0.7% in December from a 1.5% increase a month earlier.

Retail sales at department stores dropped 3.5%; clothing, footwear & other personal accessory retailing declined 1.9%; food retailer fell 1.3% and household goods retailing decreased 0.3%.

However sales increased in cafes, restaurants & takeaway food services 2.5%, but other retailing was unchanged.

Sales also fell in South Australia 3.7%, Tasmania 2.0%, Victoria 1.0%, Queensland 0.6%, the Northern Territory 0.4%, the Australian Capital Territory 0.4% and Western Australia 0.1%.

New South Wales rose 0.1%.

In seasonally adjusted volume terms, retail turnover rose 1.1% in the quarter ending in December from a drop of 0.7% in the September quarter.

Home Sales Rise 3.1% in December

Separately, the online edition reported that the number of approvals for private sector houses increased 3.1% in December from a month ago.

House approvals in Victoria increased 4.6%, in Queensland 2.2% South Australia 0.5% and Western Australian 3.3%.

In addition, the number of dwellings approved in Australia increased 2.2%, in Tasmania advanced 21.7% and Victoria jumped11.1%.

Approvals for private sector dwellings other than houses soared 9.1%.

The value of total building approved fell 3.7% in December as non-residential building approvals fell 9.4%.

The value of approved new residential buildings increased 3%.

Myer Sales Revenue Rise 2% in H1

Myer Holdings Ltd reported today that total sales revenue climbed 2% to A$1.8 billion in the first half ended January 23 from a year ago, while on a “like-for-like” basis sales grew by 1.2%.

First half EBIT is expected to rise by more than 10% over the corresponding period last year.

Like-for-like sales were weak in December, despite being strong in the months of November 2009 and in January 2010, on a very challenging pre-Christmas trading environment.

Myer forecasts pro forma full year prospectus EBIT of A$261 million in FY10.

Myer chief executive officer Bernie Brookes said, “Against a backdrop of unprecedented early and deep discounting in the retail sector in the run up to Christmas, we now expect to achieve growth in EBIT in excess of 10% for the first half, and a continuing improvement in EBIT to sales margin.”

ASX Movers

Karoon Gas Australia Ltd led the decliners in the S&P ASX 200 index with a loss of 11.2% followed by losses in CSR Limited of 6.5%, in IOOF Holdings Limited of 5.6%, in Roc Oil Company Limited 5.6% and in Emeco Holdings Limited 5.6%.

Platinum Australia Limited led gainers in the S&P ASX 200 index with a rise of 4.4% followed by gains in Extract Resources Limited 4.4%, in Macquarie CountryWide Trust of 4.1% and in Santos Ltd of 4.0%.

Other Movers

BHP Billiton plc the mining company decreased 1.2% to A$40.99.

Biota Holdings Limited advanced 2.9% to A$2.12 after the drugmaker announced that a new drug application in Japan had been filed by its co owner Daiichi Sankyo Company, Limited. CS-8958 is a laninamivir prodrug that is a Long Acting Neuraminidase Inhibitor.

CSR Limited fell 6.5% to A$1.73 after the building-products maker was downgraded to “neutral” from “buy” at UBS AG a day after a Federal judge rejected company’s plan to spin-off its sugar refining business.

David Jones Limited the department store slipped 4.0% to A$4.73.

iiNet Limited the Internet service provider surged 11.1% to A$2.20.

Karoon Gas Australia Ltd plunged 11.2% to A$5.91.

Newcrest Mining Limited, the gold miner fell 1.4% to A$31.97.

Roc Oil Company Limited dropped 5.6% to A$0.41 after the company was downgraded to “neutral” from “outperform” at Macquarie Research.

Tabcorp Holdings Limited closed unchanged at A$7.05 after the diversified entertainment group said first-half revenues rose 2.4% to A$2.19 billion from A$2.14 billion a year ago. Net profit for the first-half fell 2% to A$257.9 million or 42.5 cents per diluted share compared to net profit of A$263.2 million or 49.6 cents per share a year ago.