Australian Dollar, Stocks Decline; Rio in Focus

Mayank Mehta
24 Mar, 2010
New York City

Australian dollar and stocks edged lower. China ended its three day bribery trial involving Rio Tinto Group four executives. Brambles Ltd is scheduled to raise $750 in bond offering. BHP Billiton and Rio Tinto rise on the expectations of higher prices set by Vale SA of Brazil.

[R]7:00 AM Sydney, Australia – Australian dollar and stocks edged lower. China ended its three day bribery trial involving Rio Tinto Group four executives. Brambles Ltd is scheduled to raise $750 in bond offering. BHP Billiton and Rio Tinto rise on the expectations of higher prices set by Vale SA of Brazil.[/R]

Australian stocks closed higher on a slight rebound on commodities and metals prices. The Australian dollar edged lower to 91 U.S. cents after European leaders appear divided in offering financial assistance to Greece.

ASX 200 index in Australia increased or 16.70 or 0.34% to 4,891.50 and of the stocks in S&P ASX 200 index, 95 increased, 79 declined and 26 were unchanged.

New Zealand reported current account deficit of 2.9% in the year ending in December according to the latest data released by the nation’s statistics agency.

China ended the trial of four Rio Tinto Group executives after three days of trial. China alleged Stern Hu, Liu, Wang Young and Ge Minqiang received total of 92.18 million yuan in bribery and infringed with commercial and trade secrets.

Xinhua News, the state controlled agency said yesterday that four pleaded guilty. However, Wang and Ge pleaded not guilty to trade secret charges according to lawyers Zhang Peihong representing Wang and Zha Jian representing Ge.

Australian Prime Minister Kevin Rudd has complained vociferously on the legal charges. However, Australia also has suffered damage to its reputation after more than fifteen hundred foreign students have been attacked in Melbourne and other cities.

At a mining conference in Singapore more steelmakers and iron ore miners voice their displeasure with the annual price contracts. The price negotiations are more likely to track spot prices and large mining companies may follow quarterly price reviews and not the annual price changes as practiced for the last four decades.

ASX Movers

Energy World Corporation Limited led decliners in the S&P ASX 200 index with a loss of 8.0% followed by losses in St Barbara Limited of 3.6%, in GWA International Limited of 3.4%, in Boart Longyear Limited 3.1% and in Carnarvon Petroleum Limited 3.0%.

Western Areas NL led gainers in the S&P ASX 200 index with a rise of 4.4% followed by gains in Southern Cross Media Group 4.2%, in Roc Oil Company Limited of 4.2% and in Ansell Limited of 3.9%.

Other Movers

BHP Billiton plc rose 0.7% to A$43.36 and Rio Tinto Limited added 1.9% to A$77.20 after Brazil based Vale Economico reported that Brazil based Vale SA has revised its ore prices and prices of some grades of ore are increased 100%.

Brambles Ltd declined 1.6% and after the close Bloomberg reported that its U.S. subsidiary is set to sell $750 million of senior notes as early as today. The two-part sale will raise $250 million in five year note and $500 million in 10-year bond. The five year note will pay 137.5 basis points more than the U.S. Treasuries and ten-year bond will pay 150 basis points premium.

Transurban Group fell 1.9% to A$5.05 after Australia’s sovereign wealth fund ended talks with two Canadian pension funds on joining a A$6.8 billion ($6.25 billion) bid for the company.