Wall Street tumbled significantly overnight amid renewed concerned over the economy outlook. The Dow index dropped 200 points after the World Bank downgraded its expectations of the global economy in 2009. Sharp falls in oil and other commodities also hit the resources stocks.
The Australian market closed higher yesterday driven by the news of Xstrata's proposed merger with Anglo-American and NAB's buying Aviva Australia. The benchmark S&P/ASX200 index was up 0.5 per cent, or 18.6 points, at 3918.2, while the broader All Ordinaries index advanced 0.4 per cents, or 16.4 points, at 3910.8.
Key Economic Facts and Figures
The Australian Bureau of Statistics data showed that new motor vehicle sales in Australia jumped 5.4% in May, seasonally adjusted, the biggest increase since early 2005. New car sales reached 75,472 units in May, up from 71,626 units in April.
The economy is expected to record a contraction of 0.9 per cent in 2009 in year-average terms, Dun and Bradstreet (D&B) says in its latest Global Economic and Risk Outlook report. D&B forecast GDP to grow by 0.7 per cent in 2010, and the unemployment rate to reach 8.5 per cent by the end of next year.
M&A News
Gindalbie Metals Ltd (ASX:GBG) said that the Chinese Government has formally approval the company's previously announced A$162.06 million share placement to its joint venture partner Ansteel. Following the placement, Ansteel will hold a 36 per cent stake in Gindalbie. The two companies will be working to complete the placement procedures within the next seven days, Gindalbie said in a statement.
Important Corporate News
Mining service, chemicals and consumer products group Orica Limited (ASX:ORI) says it is still working on a demerger of its consumer products division, but a split is unlikely in the next 12 months. Orica dumped plans to spin off its consumer business in November last year due to financial market concerns.
Construction company Bovis Lend Lease, wholly owned by Lend Lease Corporation (ASX:LLC), has lost a $US72.7 million contract to build a New York school for failing to reveal it was the focus of a criminal probe, according to a newspaper report. US authorities are investigating Bovis Lend Lease for payroll and billing irregularities at five other New York projects.
Australia's APN News & Media Ltd (ASX:APN) has completed an equity sale to raise $A99 million. APN's main shareholder Independent News & Media's 39.1 per cent stake in APN was diluted to about 32 per cent after the share sale.
Telstra (ASX:TLS) executives will have their pay frozen as part of the company's annual wage review. Telstra plans to freeze the salaries of around 300 of its top executives, including section heads, a person familiar with the situation said Tuesday.
Industrial property company Goodman Group (ASX:GMG) has had its long-term, unsecured credit rating reduced from Baa2 to Baa3 by ratings agency Moody's Investor Services. Goodman said the downgrade would increase the non-residential property company group's interest bill by about A$2 million a year.
Aquila Resources Limited (ASX:AQA) and API Management Pty Ltd ("API") which is the manager of Aquila's 50% owned West Pilbara Iron Ore Project, have signed a Cooperation Agreement with Fortescue (ASX:FMG) to investigate the potential for shared development of port facilities at Anketell Point.
Contact
Michelle LiangAsia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
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