Sydney, June 26, 2009 (ABN Newswire) - US stocks posted strong gains despite data showing that the number of workers filing claims for unemployment benefits increased in the week ended June 20. Investors were inspired as a series of positive earnings results were released and the Federal Reserve Chairman Ben Bernanke withstood questioning over the rescue of Merrill Lynch and Bank of America.
Yesterday, the Australian share market closed higher on the back of stronger commodity prices. The benchmark S&P/ASX200 index rose 49 points, or 1.29 per cent, at 3856, while the broader-based All Ordinaries index gained 49.3 points, or 1.3 per cent, to 3851.5 points.
Key Economic Facts and Figures
Westpac anticipates unemployment will increase the most in the second half of 2009 and remain close to 8.0% for much of next year. The Reserve Bank of Australia may have to take two further cuts of 0.25% each, with the cuts expected to be spaced a couple of months apart. Economists now expect the official interest rate to bottom at 2.50 per cent by year end.
M&A News
BHP Billiton (ASX:BHP) said it was conducting a review of options for its mothballed Ravensthorpe nickel mine in Western Australia. BHP was also still looking at the future of the Yabulu refinery in Queensland, and the internal review of the operation was due to conclude at the end of this month.
Coca-Cola Amatil (ASX:CCL) says Foster's Group (ASX:FGL) will have to dispose of its underperforming wine operations before any merger goes ahead. Foster's has already split its wine and beer operations, but has said it will not sell the wine division until market conditions improve.
Important Corporate News
Australian property firm FKP Property Group (ASX:FKP) plans to raise A$324 million to strengthen its balance sheet. The company reaffirmed its earnings guidance that the operating profit for fiscal year 2009 would be in the range of A$75-A$80 million. Malaysian company Mulpha International, the largest shareholder of FKP, has indicated that it will take up its full entitlement.
Qantas (ASX:QAN) said it had reached a mutual agreement with Boeing to defer the delivery of 15 Boeing 787-8 aircraft by four years and cancel orders for 15 Boeing 787-9s scheduled for delivery in 2014/2015.
Caltex Australia (ASX:CTX) said it is anticipating an after tax profit of A$270 million to A$295 million on a replacement cost of sales operating profit basis for the first half of 2009. The profit may rise as much as 50 per cent, compared with A$196 million in the corresponding period in 2008.
China's SouFun Holdings Ltd., a property consultancy 51%-owned by Telstra Corp. (ASX:TLS), will most likely launch its initial public offering in Hong Kong, rather than in the U.S. or mainland China. An IPO application can be filed as soon as this year or next year. Telstra said in July last year SouFun shelved plans for an IPO due to weakness in global equity markets.
Singapore Telecommunications Ltd. (ASX:SGT) (SIN:Z74) said it continues to look for new investment opportunities in Asia and that it is studying opportunities in Africa and the Middle East.
The Macquarie Leisure Group (ASX:MLE) yesterday unveiled plans to cut itself adrift from its investment banking parent Macquarie Group (ASX:MQG). The move, which involves removing Macquarie Group as manager and banishing the Macquarie name, is forecast to drive down fees and possibly boost the trust's image.
