Sydney, Nov 10, 2008 (ABN Newswire) - At week's end, Wall St. rebounded with about 2.9% rise on hopes for further US rate cuts and President-elect Barack Obama's call for another economic stimulus plan. China's announcement over the weekend that it will spend 4 trillion yuan by 2010 to help re-ignite growth may also shore up Australian stocks, particularly miners.
Last Friday the benchmark S&P/ASX200 index ended 98.4 points, or 2.4%, lower at 4051.3 points. The broader All Ordinaries ended the week down 99.9 points, or 2.4%, at 4006.60.
Today the December Share Price Index futures contract on the Sydney Futures Exchange was up 24 points, or about 0.5%, at 4,148.
The Australian dollar has opened higher after dreadful US employment data caused the US dollar to weaken. At 7am (AEDT), the Australian dollar was trading at $US0.6803/06, up US1c, or 1.5 per cent, from Friday's close of $US0.6701/07.
Oil prices were steady on Friday after the week's giant sell-off, despite a government reported a 14 year-high unemployment rate and predictions from an international energy agency that put the price of crude at $US200 per barrel by 2030. Light, sweet crude for December delivery rose 27 cents to settle at $US61.04 a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
Momentum is building for another round of interest-rate cuts and spending packages with finance ministers from the Group of 20 nations declaring more action is needed to tackle the economic slowdown. The BRICs countries are also planning co-ordinated measures that would increase trade and capital flows among their countries.
Transport Department figures show best discount fares in November are 16 per cent cheaper this month than at the same time last year. In the past two months the CPI-adjusted best-discount airfare index has hit its lowest point since July, 2005, although fares rose by 3 per cent from October to November.
Today the Reserve Bank of Australia releases its quarterly Statement on Monetary Policy. The Australian Bureau of Statistics releases housing finance data for September. SEEK reports its Employment Index for October.
M&A News
Australia's small CBH Resources Ltd (ASX:CBH) will cut output by a third and review takeover plans for rival Perilya Ltd(ASX:PEM), as prices for base metals zinc, lead and nickel falls and 118 more employers are set to become redundant and production is halved at Endeavour mine. CBH made a hostile bid of 4.2 shares for each of Perilya's shares in early October after an agreed merger collapsed in June.
Woolworths(ASX:WOW) is still considering a takeover bid for New Zealand retail chain The Warehouse(ASX:WHS) despite the target company reporting a continued decline in sales revenue for the first quarter of the financial year. Both companies were until October unable to proceed with a takeover proposal after the NZ Commerce Commission ruled a tie-up with either group would reduce future competition in the supermarket sector.
Important Corporate News
National Australia Bank Ltd(ASX:NAB) plans to raise about A$2 billion by selling shares to institutional investors. The institutional placement, fully underwritten by investment banks Goldman Sachs JBWere, Merrill Lynch and UBS AG, will be used also to allow NAB to grow its business organically.
Chemicals maker Orica Ltd(ASX:ORI) has declared an eleven per cent rise in annual profit, and expects another rise in fiscal 2009. Orica says net profit in fiscal 2008 was A$540 million.
Rio Tinto(ASX:RIO) said the company could possibly team up with China's Chinalco in developing infrastructure in Queensland, a company spokesman said. Chinalco would build the infrastructure, the roads, railways and ports, needed to transport the minerals.
The Federal Government has put up A$22 million to prevent the closure of ABC Learning(ASX:ABS) child-care centres until New Year's Eve after it emerged that two in five facilities are unprofitable.
Macmahon Holdings(ASX:MAH) has cut its earnings forecast and expressed concern over slowing contracts and delays to project approvals. Macmahon is to slash its annual earnings guidance from 20 to 30 per cent to between 10 and 20 per cent.
Pilbara iron ore developer Aurox Resources Limited (ASX:AXO) said its Balla Balla Ore Reserve was estimated to increase by 34 per cent. The company also has binding 15-year off-take contracts secured with Chengde Iron & Steel (wholly owned by China's largest steel company Hebei Iron & Steel Group), and RockCheck Iron & Steel who is located on the China coast and one of the few independent steel mills still operating at full capacity.
1. Related Stocks - Mid Market (AEST 1230)
Last Friday the benchmark S&P/ASX200 index ended 98.4 points, or 2.4%, lower at 4051.3 points. The broader All Ordinaries ended the week down 99.9 points, or 2.4%, at 4006.60.
Today the December Share Price Index futures contract on the Sydney Futures Exchange was up 24 points, or about 0.5%, at 4,148.
The Australian dollar has opened higher after dreadful US employment data caused the US dollar to weaken. At 7am (AEDT), the Australian dollar was trading at $US0.6803/06, up US1c, or 1.5 per cent, from Friday's close of $US0.6701/07.
Oil prices were steady on Friday after the week's giant sell-off, despite a government reported a 14 year-high unemployment rate and predictions from an international energy agency that put the price of crude at $US200 per barrel by 2030. Light, sweet crude for December delivery rose 27 cents to settle at $US61.04 a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
Momentum is building for another round of interest-rate cuts and spending packages with finance ministers from the Group of 20 nations declaring more action is needed to tackle the economic slowdown. The BRICs countries are also planning co-ordinated measures that would increase trade and capital flows among their countries.
Transport Department figures show best discount fares in November are 16 per cent cheaper this month than at the same time last year. In the past two months the CPI-adjusted best-discount airfare index has hit its lowest point since July, 2005, although fares rose by 3 per cent from October to November.
Today the Reserve Bank of Australia releases its quarterly Statement on Monetary Policy. The Australian Bureau of Statistics releases housing finance data for September. SEEK reports its Employment Index for October.
M&A News
Australia's small CBH Resources Ltd (ASX:CBH) will cut output by a third and review takeover plans for rival Perilya Ltd(ASX:PEM), as prices for base metals zinc, lead and nickel falls and 118 more employers are set to become redundant and production is halved at Endeavour mine. CBH made a hostile bid of 4.2 shares for each of Perilya's shares in early October after an agreed merger collapsed in June.
Woolworths(ASX:WOW) is still considering a takeover bid for New Zealand retail chain The Warehouse(ASX:WHS) despite the target company reporting a continued decline in sales revenue for the first quarter of the financial year. Both companies were until October unable to proceed with a takeover proposal after the NZ Commerce Commission ruled a tie-up with either group would reduce future competition in the supermarket sector.
Important Corporate News
National Australia Bank Ltd(ASX:NAB) plans to raise about A$2 billion by selling shares to institutional investors. The institutional placement, fully underwritten by investment banks Goldman Sachs JBWere, Merrill Lynch and UBS AG, will be used also to allow NAB to grow its business organically.
Chemicals maker Orica Ltd(ASX:ORI) has declared an eleven per cent rise in annual profit, and expects another rise in fiscal 2009. Orica says net profit in fiscal 2008 was A$540 million.
Rio Tinto(ASX:RIO) said the company could possibly team up with China's Chinalco in developing infrastructure in Queensland, a company spokesman said. Chinalco would build the infrastructure, the roads, railways and ports, needed to transport the minerals.
The Federal Government has put up A$22 million to prevent the closure of ABC Learning(ASX:ABS) child-care centres until New Year's Eve after it emerged that two in five facilities are unprofitable.
Macmahon Holdings(ASX:MAH) has cut its earnings forecast and expressed concern over slowing contracts and delays to project approvals. Macmahon is to slash its annual earnings guidance from 20 to 30 per cent to between 10 and 20 per cent.
Pilbara iron ore developer Aurox Resources Limited (ASX:AXO) said its Balla Balla Ore Reserve was estimated to increase by 34 per cent. The company also has binding 15-year off-take contracts secured with Chengde Iron & Steel (wholly owned by China's largest steel company Hebei Iron & Steel Group), and RockCheck Iron & Steel who is located on the China coast and one of the few independent steel mills still operating at full capacity.
1. Related Stocks - Mid Market (AEST 1230)
------------------------------------------------ Code % Change Volume Turnover Low High ------------------------------------------------ ASX:CBH +7.69 156,200 $8,749 5.4 5.7 ASX:PEM 736,092 $148,740 19.5 20.5 ASX:WOW +1.48 1,543,380 $45,455,528 2900 2980 ASX:NAB +1.8 1,505,000 $53,186,000 ASX:ORI +5.8 1,560,912 $28,553,157 1787 1880 ASX:RIO +6.53 1,609,279 $124,585,869 7475 7876 ASX:MAH -8.57 3,058,092 $2,127,608 63 78.52. Top 10 ASX on Turnover - Mid Market (AEST 1500)
------------------------------------------------ Code % Change Volume Turnover Low High ------------------------------------------------ ASX:BHP +6.58 11,549,315 $342,421,090 2828 3018 ASX:CBA -4.79 6,184,183 $240,433,564 3804 3998 ASX:WBC -4.8 10,074,131 $204,630,615 1999 2080 ASX:TLS +2.55 44,648,177 $197,372,603 438 446 ASX:ANZ -2.76 10,921,529 $176,730,394 1570 1639 ASX:RIO +6.5 1,612,120 $124,804,626 7475 7876 ASX:QGC 19,358,563 $111,320,198 575 576 ASX:WDC -1.4 5,098,821 $71,750,969 1385 1454 ASX:QBE +.03 1,933,315 $54,858,175 2779 2865 ASX:NAB +1.8 1,505,000 $53,186,000
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