Australian Dollar Near Record High

Darlington Musarurwa
05 Mar, 2010
New York City

Australian stocks rested after commodities traded higher. The Australian dollar edged higher and closed above 90 U.S. cents. Australia may face a decline in crude oil production and imports may represent as much as 75% of consumption as early as 2030.

[R]5:00 AM New York, 7:00 PM Sydney – Australian stocks rested after commodities traded higher. The Australian dollar edged higher and closed above 90 U.S. cents. Australia may face a decline in crude oil production and imports may represent as much as 75% of consumption as early as 2030.[/R]

The benchmark stock index rose in Australia as housing construction expanded for the second consecutive month at a slower pace.

Commodity stocks also helped spur growth as crude oil prices climbed 0.6% to $80.7 per barrel.

Investors speculated that China may take measures to cool economic growth as it tries to transition from then stimulus policies that helped sustain growth.

In Sydney trading ASX 200 Index advanced 0.4% or 16.7 to 4,767.20.

Of the ASX 200 Index stocks, 114 advanced, and 70 declined, and 16 were unchanged. Gunns Ltd. led gainers in the index shares with a rise of 11.6% followed by Eastern Star Gas jumping 9.1%.

The Australian dollar edged up 0.03% to 90.02 U.S. cents.

Australia’s crude oil production declined 17% in 2009 to 100 million barrels a day as fields age and new fields are still to be explored. The latest released from EnergyQuest and quoted on Bloomberg News suggested that by 2030 the imports may represent 75% of consumption up from 40% in the current year.

The government report suggested that crude oil output is expected to increase 6% in the year to June 2011 and increase 4% in the following year before the beginning of the decline.

Australia’s Housing Construction Expansion Eases

Australian Industry Group/Housing Industry Association Performance of Construction Index dropped 4.9 points to 52.8 in February, expanding for the second straight month.

A measure above 50 shows expansion, while a measure below 50 indicates contraction.

Expansion was impacted by fewer new contracts and contraction in the apartment sector.

The report notes that customer enquiries and buyer confidence remained resilient in the month.

Engineering, commercial and house building sectors rose in the month.

Australian Industry Group Director of Public Policy, Dr Peter Burn said, “The key concern is that higher interest rates and, in particular, the clear risk of further increases, will pull back growth in coming months.”

Lihir to Sell Ballarat Project to Castlemaine

Lihir Gold reported today that it is selling its Ballarat gold project to Castlemaine Goldfields for A$4.5 million in cash plus a 2.5% royalty on future production from the mine.

Castlemaine however intends cease production and take is as an exploration project.

The deal is conditional on Castlemaine''s shareholders approving an equity-raising of a minimum A$20 million to fund the transaction.

Lihir acquired the company in 2007 for A$450 million, but put the project up for sale in July last year and booked an impairment charge of A$409 million.

The decision to invest in the project led the departure of Arthur Hood as chief executive.

ASX Movers

Primary Health Care Limited led the decliners in the S&P ASX 200 index with a loss of 4.4% followed by losses in Charter Hall Group of 4.4%, in Virgin Blue Holdings Limited of 3.5%, in Hills Industries Limited 3.2% and in Mirabela Nickel Ltd 2.9%.

Gunns Limited led gainers in the S&P ASX 200 index with a rise of 11.6% followed by gains in Eastern Star Gas Limited 9.0%, in CuDeco Limited of 5.0% and in Australian Worldwide Exploration Limited of 4.7%.

Other Movers

AWB Limited the wheat exporter decreased 2.2% to A$1.08.

Australian Worldwide Exploration Limited an oil and gas explorer rose 4.7% to A$2.67.

Billabong International Limited the surfwear maker gained 3.6% to A$10.66.

James Hardie Industries SE the seller of home siding in the U.S. rose 2.1% to A$7.50.

Telstra Corporation Limited dropped 0.3% to A$2.91 after the company prepares for a bond offering in Europe.

TOWER Australia Group Limited climbed 1.5% to A$2.56 an insurance company says Japanese life insurance company Dai-ichi Mutual Life has received regulatory approval to increase its interest in the insurer.