Goldman Sachs and Morgan Stanley have abandoned their status as investment banks and sought to transform themselves into traditional bank holding companies. The investment bank era has ended on Wall Street. Overnight the Dow Jones index dived more than 3 per cent.
Yesterday the benchmark S&P/ASX200 finished 216.4 points, or 4.5%, higher at 5020.5 points, while the broader All Ordinaries gained 209.4 points, or 4.33% to 5050.1. Analysts say that investors are not totally overconfident although the market sentiment has a little bit recovered.
At 0744 AEST, the Sydney Futures Exchange's December Share Price Index contract was down 111 points at 4,920.
The Australian dollar has opened more than one US cent firmer as concerns about the impact of the US government's $US700 billion rescue plan on the American economy hurt the US currency. At 7am, the Australian dollar was trading at $US0.8436/41, up from yesterday's close of $US0.8328/31.
Crude oil climbed more than $US25 a barrel, the biggest gain ever, as the US dollar weakened the most against the euro since January 2001. The October contract, which expires today, rose almost $US12 more than the contract for November delivery, as traders rushed to close positions. Light, sweet crude for October delivery reached a high of $US130 a barrel on the New York Mercantile Exchange before falling back to settle $US16.37 higher at $US120.92.
Key Economic Facts and Figures
The Reserve Bank of Australia (RBA) injected more than the required amount of funds into the banking system on Monday in an effort to cool soaring money market rates as banks continued to hoard cash. The Reserve Bank of Australia added A$12.3 billion in the five days to Friday, the most in a week since August 2007. On Monday RBA added A$2.025 billion in repurchase agreements.
New motor vehicle sales fell 3.5 per cent in August, the Australian Bureau of Statistics (ABS) said yesterday. New vehicle sales also fell by 7.2 per cent in the 12 months to August, the weakest annual growth rate in about seven years. Rising fuel costs, high interest rates and tax changes to the purchase of luxury cars caused new vehicle sales to fall for a second straight month in August, economists say.
Middle East financial services business Dubai Group will buy an 18 percent stake in Queensland goldminer Citigold(ASX:CTO) for A$35 million.
India's Tata Steel(BOM:500470) bought a 7.3 percent interest in coalminer Riversdale Mining(ASX:RIV). An Australian Securities Exchange filing reveals that Tata's stake was acquired through indirect subsidiary TS Global Minerals Holdings. Talbot Group, a private company owned by Mr Talbot lifted its holdings in Riversdale from 11.27 percent to 13.38 percent.
The Singapore government-owned GIC Real Estate disclosed yesterday that it had secured a substantial shareholding in Mirvac Group(ASX:MGR) for almost A$145 million. GIC Real Estate acquired 57.5 million units (5.064 per cent) in Mirvac over the past four months, from May 18 to September 18.
Important Corporate News
Media and investment company Seven Network Ltd.(ASX:SEV) said Monday its first half pretax profit could halve on year after losing money on its share market investments, sending its shares sharply lower. Seven said it has so far realized losses of around A$14 million this financial year and expects to incur further losses as it continues to sell down its portfolio.
Fashion retailer OrotonGroup(ASX:ORL) has lifted its annual profit by 70.1 per cent and announced a new share buyback program as it looks forward to further store expansion in the new fiscal year. Oroton today reported a net profit of A$16.74 million for the year ended July 26, up from A$9.84 million the previous year.
Tata Steel Limited
Seven Network Limited
Riversdale Mining Limited
Macquarie Group Limited
Citigold Corporation Limited
Babcock & Brown Limited