US stocks closed higher overnight as Dubai World said it was in discussions with banks to restructure US$26 billion in debt and the talks were proceeding on a constructive basis. Global markets strongly rebounded yesterday as investors realised that Dubai's trouble might be a regional problem.
The Australian share market opened slightly lower ahead of the interest rate decision by Reserve Bank of Australia. Yesterday, the benchmark S&P/ASX200 index rose 129.2 points, or 2.8 per cent, to 4701.3, while the broader All Ordinaries index jumped 118.3 points, or 2.6 per cent, to 4715.5.
The Australian dollar opened marginally lower, after fresh worries over Dubai countered gains in commodity prices. At 0700 AEDT, the Australian dollar was trading at $US0.9143/45.
Key Economic Facts and Figures
The Australian Industry Group/PriceWaterhouseCoopers Performance of Manufacturing Index (PMI) dipped 0.5 points to 51.2 in November, above the 50.0 point level that separates it from contraction. It is the fourth consecutive month of growth for the sector.
Sales of new homes in Australia dropped 6 per cent in October, on top of a 4.3 per cent decline in September, according to the Housing Industry Association. "Sales activity from investors and upgrade owner-occupiers has not chimed in to offset weakening first home buyer-related activity," said HIA chief economist Harley Dale.
Today the RBA is to hold its December board meeting, releasing its decision on interest rates at 2.30pm. The Australian Bureau of Statistics issues building approvals data for October and the RBA also issues its index of commodity prices for October.
M&A News
Indophil Resources (ASX:IRN) has agreed terms with China's Zijin Mining Group Company Limited (SHA:601899)(HKG:2899), which operates the biggest gold mine in China, for a recommended takeover offer of Indophil for A$1.28 cash per share. The offer is valuing Indophil's share capital at approximately A$545 million. Indophil directors have resolved to unanimously recommend that shareholders accept the offer, in the absence of a superior proposal.
Power producer Energy Developments (ASX:ENE) yesterday received a A$431 million takeover bid from Greenspark Power Holdings, which is owned by private equity group Pacific Equity Partners, valuing it at A$2.75 a share. The new bid replaced an indicated offer of A$2.65.
OZ Minerals (ASX:OZL) chief executive Terry Burgess outlined the miner's new strategy yesterday and said the company would focus acquisition activity on copper projects after China Minmetals bought majority of its assets in a US$1.3 billion deal. OZ Minerals is looking for opportunities in Australia and Southeast Asia and a few options have already been explored.
Rio Tinto (ASX:RIO) said it has completed the sale of Alcan Composites, part of the Alcan Engineered Products division, to Schweiter Technologies (SWF:SWTQ) for a total consideration of US$349 million. In addition, Rio Tinto received a binding offer from Amcor (ASX:AMC) in August for US$2.025 billion for Alcan Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions.
Important Corporate News
Metcash Limited (ASX:MTS) has lifted its net profit by 36.5 per cent to A$109.2 million for the six months to 31 October, 2009, up from A$80 million in previous corresponding period. The result was struck on a 6.6 per cent rise in wholesale sales to A$5.6 billion. The company reiterates its guidance of 7 to 10 per cent growth in pre-abnormal earnings per share for the year to 30 April 2010.
Australian Agricultural Company Limited (ASX:AAC) today said in a statement that its 2010 and 2011 debt maturity obligations have been successfully refinanced. The new facilities, which total A$330 million, comprise two debt lines. The first line is a term loan of A$270 million, which is a fully drawn facility with a three year term. The second line is a A$60 million revolving facility, subject to annual review.
Contact
Michelle LiangAsia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
Related Companies
Australian Agricultural Company Limited
Related Industry Topics: