Press Releases

Sydney, Sep 1, 2008 (ABN Newswire) - The Australian stock market has received negative leads from Wall Street on Friday. Oil rose again in anticipation of Hurrican Gustav making landfall in the continental US.

On Friday, the Australian share market closed substantially stronger, driven by gains in the financial sector. The benchmark S&P/ASX200 index was up 69.1 points, or 1.36%, to 5135.6, while the broader All Ordinaries Index advanced 72.2 points, or 1.4%, to 5215.5.

At 6.50am on the Sydney Futures Exchange, the September share price index futures contract was down 29 points at 5115.

The Australian dollar has opened lower as improved factory health boosted the American currency. Business activity in the US midwest grew in August. At 0700 AEST, the Australian dollar was trading at $US0.8566/73, down from Friday's close of 0.8609/11.

Oil futures jumped at the open of electronic trading today, as the energy industry braced for the onslaught of Hurricane Gustav. Light, sweet crude futures for October delivery were up $US2.13, or 1.8 per cent, at $US117.59 a barrel, off a session high of $US118.39.

Key Economic Facts and Figures

Reserve Bank governor Glenn Stevens is expected to accompany tomorrow's interest rate cut with a statement stressing the continuing threat of inflation. The central bank remains cautious about how the surge in income from iron ore and coal will flow through the economy.

UBS chief economist Scott Haslem says it remains possible that Australia will join the list of developed countries reporting that their economies contracted in the June quarter.

Gross domestic product is forecast to increase by 0.4 per cent in the June quarter for an annual pace of 2.9 per cent, according to the median of 10 economist forecasts. That would be slower than the 0.6 per cent growth record in the March quarter, and the annual rate of 3.6 per cent. If realised, the annual growth forecast for the June quarter would be the slowest growth since the December quarter of 2006, when it was 2.8 per cent.

Today, the Australian Bureau of Statistics is to release data on the balance of payments, foreign investment and business indicators for the June quarter. The Reserve Bank of Australia releases its commodity price index for August.

TD Securities and the Melbourne Institute release their inflation gauge, and the Australian Industry Group and PricewaterhouseCoopers issue their Australian Performance of Manufacturing Index, also both for August.

M&A News

Commonwealth Bank of Australia Ltd. (ASX:CBA) said it will take a strategic 33% stake in privately owned mortgage broker Aussie Home Loans, increasing its exposure to the home-loan market. Without disclosing the amount paid for the stake, CBA said Aussie Home Loans will remain an independently managed operation under the control of its founder and chairman, John Symond.

Santos (ASX:STO) is accessing the upcoming sale of electricity and gas retailer EnergyAustralia by the NSW government. In the past, it has looked to buy TXU Australia (now TRUenergy, owned by CLP holdings) and at merger prospects with AGL Energy (ASX:AGK) in order to move from exploration and production into retailing of energy to business and personal customers. Santos has strong cash reserves after collecting US$2 billion for a 40 percent stake in its Gladstone LNG project from Malaysian company Petronas.

Important Corporate News

ABC Learning Centres (ASX:ABS) chief executive Eddy Groves says a higher-than-expected loss for fiscal 2008 is due to a 'difference of opinion' between its old auditors, Pitcher Partners, and current auditors Ernst & Young. The childcare operator flagged a pre-tax loss of A$437 million four weeks ago, but is expected to post a worse result after being compelled to restate its accounts.

Queensland Gas Company (ASX:QGC) said a new A$7 billion liquefied natural gas project could eventually put the group on par with Woodside Petroleum (ASX:WPL). The company also said a joint development with BG Group (LSE:BG) in Gladstone, 550 km north of Brisbane, would give it roughly about the same amount of petajoules as Woodside is exporting when the project came online in six years.

Property investor and fund manager City Pacific (ASX:CIY) today reported a A$139.53 million bottom line loss for the last financial year, after it was forced to make writedowns on some its assets and investments. City Pacific said ructions in the property market due to the global credit crisis had impacted its business, resulting in the revaluations.