Aussie, Stocks Struggle; Telstra Vote Delay

Darlington Musarurwa
18 Mar, 2010
New York City

The Australian dollar declined after currency traders worried on the growing uncertainty related to bailout structure for Greece. Queensland Gas Company and BOC joint venture to invest in A$100 million LNG plant. Bankwest completed A$620 million asset backed bonds.

[R]3:00 AM New York, 7:00 PM Sydney – The Australian dollar declined after currency traders worried on the growing uncertainty related to bailout structure for Greece. Queensland Gas Company and BOC joint venture to invest in A$100 million LNG plant. Bankwest completed A$620 million asset backed bonds.[/R]

The Australian benchmark index rose fractionally despite strong commodity prices after an unexpected sell off in the afternoon session as investors locked in gains.

Gains were mainly driven by defensive stocks.

In Sydney trading the ASX 200 Index edged up 0.2% or 9.9 to 4,863.10.

Of the ASX 200 index stocks, 103 rose, 79 fell, and 18 were unchanged. Elders Ltd. led gainers in the index shares with a rise of 9.1% followed by Independence Group climbing 7.2%.

Commodity stocks gained as gold prices increased 0.2% to $1,124 per ounce. Murchison Metals advanced 4.6% to A$2.71 and Medusa Mining climbed 5.1% to A$3.91.

The Australian dollar fell 0.3% to 92.02 U.S. cents as investors worried the prospect of Greek bailout. Greece may be forced to seek low cost loan from the International Monetary Fund after German Chancellor Angela Merkel raised doubts of German led bailout.

Australia in A$100 million LNG Plant

Queensland Premier Anna Bligh today announced that Queensland Gas Company and BOC have entered into A$100 million joint venture for the establishment of a first plant that will convert coal seam gas to liquefied natural gas.

The plant will be built next to Condamine Power Station and construction is scheduled for early next year.

Under the agreement, QCG will supply gas to BOC from July.

“LNG produces up to 25% fewer emissions than diesel and is a proven safe alternative to other fossil fuels. Through this agreement, Queensland will join the rest of Australia, as BOC develops a network of fuelling stations across the country for vehicles converted to run on LNG,” said Bligh.

Bankwest in A$620 million Offer

The Australian reported today that Bankwest has issued its first public residential-mortgage backed securities since the bank was taken over by Commonwealth Bank of Australia.

The offer was for three classes of securities and rating agency Standard & Poor’s assigned a AAA rating to the A-class notes worth A$586 million and AB notes valued at A$23.4 million.

However, a double A-negative rating was assigned to the B notes worth $10.6 million.

According to the ratings agency, there is sufficient credit support for each class of notes comprising of “both note subordination and mortgage insurance covering 100% of the face value of all loans, accrued interest and reasonable costs of enforcement.”

S&P expects payment of interest and principal by April 2041 for all classes of notes.

The offering is led by CBA and Royal Bank of Scotland.

ASX Movers

ConnectEast Group led the decliners in the S&P ASX 200 index with a loss of 3.3% followed by losses in Sundance Resources Limited of 3.3%, in Transfield Services Limited of 3.3%, in Boart Longyear Limited 3.1% and in Healthscope Limited 2.9%.

Elders Limited led gainers in the S&P ASX 200 index with a rise of 9.0% followed by gains in Independence Group NL 7.2%, in Mermaid Marine Australia Limited of 6.3% and in Emeco Holdings Limited of 6.1%.

Other Movers

Australia and New Zealand Banking Group Limited added 1.1% to A$24.88.

BHP Billiton plc rose 0.3% to A$43.16 after the mining company said Nickel refinery shutdown may last two weeks.

CBH Resources Limited increased 2.7% to A$0.19 after the lead and zinc miner’s independent board committee recommended Toho Zinc Co''s bid for a stake in 49.9% of the Australian miner.

Origin Energy Ltd is likely to finalize its A$2 billion loan syndication as early as today according to the Australian Financial Review.

Sigma Pharmaceuticals Limited closed unchanged at A$0.90 after the drug distributor said it looks unlikely that it will be able to pay a dividend in the second half of its fiscal year due to a material reduction in the carrying amount of goodwill and write-downs.

Telstra Corporation Limited rose 1.2% to A$3.17 after Australia''s Senate plan to debate or vote on the split of the telecom carrier’s retail and wholesale network division soon according to a Senate spokeswoman.