Sydney, Sept 22, 2008 (ABN Newswire) - Share markets around the world rebounded strongly on Friday as regulators took steps to shore up the financial system. The Australia sharemarket regained much of its losses last Friday, closing 4.3% higher, but still down 2% for the week.

The benchmark S&P/ASX 200 index gained 198.2 points, or 4.3%, to 4805.5, the largest daily gain since January 25. The broader All Ordinaries had swelled 193.2 points, or 4.15%, to 4845.1.

The cash injection by the central banks and other measures take to rescue the market in panic had helped calm investors and restore their confidence in the short term. But long-term stability was still uncertain.

At 6.58am, the Sydney Futures Exchange's December Share Price Index contract was 133 points higher at 4928.

The Australian dollar has opened 2.5 US cents higher as the US authorities' $US700 billion rescue plan buoyed investors' demand for high-yielding currencies. At 7am, the Australian dollar was trading at $US0.8365/70, up from Friday's close of $US0.8112/17.

Oil prices surged on Friday after the US government announced its plan to rescue the troubled banking system, prompting traders to reassess the outlook for the economy and energy use. Light sweet crude for October delivery jumped $US6.67 to close at $US104.55 a barrel.

Key Economic Facts and Figures

The Australian Securities and Investments Commission banned short selling on all listed shares in Australia, following moves by other countries to prevent short sales of financial stocks. ASIC said Sunday it decided to ban covered short selling from the start of trading Monday because a number of countries had banned covered short selling of financial stocks. Investors had expressed concern that if Australia continued to allow short selling, it could become a target for global hedge funds looking to short stocks after they were locked out of the U.S. and U.K. markets.

Australia has gone further than any other country, banning short selling on all 2600-odd stocks listed here, whereas in the US and Britain short selling has been banned only in financial stocks such as banks.

In news today, the Australian Bureau of Statistics releases new motor vehicle sales data for August.

The PKF Business and Population Monitor report will be released, focusing on Australia's changing demographics and the opportunities and risks for Australian businesses.

M&A News

Wayne Swan yesterday approved Chinese steelmaking giant Sinosteel's application to acquire up to 49.9 per cent of West Australian iron ore miner Murchison Metals(ASX:MMX). Sinosteel recently acquired more than 97 per cent of Midwest Corporation(ASX:MIS), which has iron ore deposits next to Murchison's, in the Mid-West region of WA.

Citic Group, the oldest state-backed investment fund on the mainland China, is considering bidding for the iron ore and coal assets that Australian mining company Aquila Resources(ASX:AQA) has put up for sale.
Australian contractor Lend Lease Corp(ASX:LLC) and real estate trust Stockland Group(ASX:SGP) have joined the bidding for retirement homes investor Babcock & Brown Communities.

The directors of Sunshine Gas Ltd(ASX:SHG) have recommended a takeover offer from Queensland Gas Co Ltd(ASX:QGC), following the independent report which found the offer fair and reasonable.

Hong Kong-based merchant banking and asset management group Crosby Capital Ltd(HKG:8088) has launched an off-market A$182 million cash takeover bid for Philippines-focused gold producer Medusa Mining(ASX:MML).

Important Corporate News

Iron ore miner Fortescue Metals Group(ASX: FMG) has reported producing a A$72 million trading profit and a bottom line loss of A$2.5 billion. The miner has also increased its projected ore reserves by over 50 percent. Chief executive Andrew Forrest also said the company was relatively unaffected by the global credit crisis, and would use free cash flow to fund the second stage of its operations expansion.

Seven Network(ASX:SEV) said that profit before tax in 2008 was likely to be about 40-50% below the previous year, due to weak advertising revenue. The group also said it had taken a loss on its investments of A$14 million and expected to take further losses as it unwinds its portfolio.