Sydney, Sep 25, 2008 AEST (ABN Newswire) - Yesterday the Australian share market closed higher with most of the upside in the financial sector, after news that American billionaire Warren Buffet would buy a $US5 billion slice of investment bank Goldman Sachs. As Buffet is a long term investor with a good record of investing at the right time, people speculate that potentially it's the bottom of financial stocks.
Australia's benchmark S&P/ASX200 index had risen 58.4 points, or 1.2%, to 4981.9, while the broader All Ordinaries lifted 50.5 points, or 1%, to 5008.2.
Today the December share price index (SPI) futures were down 37 points at 5014.
The Australian dollar has opened weaker as falling business confidence in the eurozone and lower base metals nudged the local currency lower. At 0700 AEST, the Australian dollar was trading at $US0.8344/49, down from Wednesday's close of $US0.8383/86.
Crude oil prices dipped today after the US government reported a sharp drop in consumption, stoking worries about demand in the world's largest energy consumer. New York's main contract, light sweet crude for November delivery, fell 88 US cents a barrel to close at $US105.73.
Key Economic Facts and Figures
The Reserve Bank of Australia (RBA) has joined four other central banks, including the US Federal Reserve, in setting up temporary reciprocal currency swap facilities to address elevated pressures in US dollar short term fundings markets. The RBA said currency swap lines have been set up between itself, the Fed and the Denmark, Norway and Sweden central banks - Danmarks Nationalbank, Norges Bank and Sveriges Riksbank. On the other hand, the RBA will offer a short-term deposit facility, to be known as RBA Term Deposits (RBATD), to authorised deposit-taking institutions. Institutions will bid for these deposits under auctions.
Australia's biggest migration boom is worsening the rental crisis, while house prices are overvalued by between 5 per cent and 15 per cent, the International Monetary Fund has said. Immigration added a record 199,064 people to Australia over the year to March - the biggest annual rise in history, figures released yesterday by the Bureau of Statistics show. This surpasses the boom after World War II, which peaked at about 149,000 people in 1950.
Today the Reserve Bank of Australia will release the Financial Stability Review.
Woodchipper Gunns(ASX:GNS) said yesterday that it had entered into an exclusive negotiation period with an international forestry investor on Gunns' proposed sale of a A$170 million tranche of forest resources. Gunns has said proceeds of any sale would reduce bank debt and strengthen the group's balance sheet.
Australian stockfood manufacturer Ridley Corp.(ASX:RIC) Thursday reported a loss of A$39 million on the sale of its 69% stake in Canada-based unit Ridley Inc.( TSE:RCL) for A$93 million to Fairfax Financial Holdings Ltd. (NYSE:FFH). The carrying value of the unit on Ridley's books at Aug. 31 was A$122 million.
Commonwealth Bank(ASX:CBA) has been singled out as the most likely entity to pursue an acquisition of Suncorp's(ASX:SUN) banking operations, possibly paying about A$4billion. National Australia Bank(ASX:NAB) and ANZ(ASX:ANZ) were also cited as possible contenders.
Important Corporate News
The National Australia Bank(ASX:NAB) may seek to offload its A$1 billion exposure in US property markets to the massive banking rescue being mounted by the US Government.
Building materials producer Brickworks Ltd(ASX:BKW) has announced a 5.6 per cent dip in profit, but says the year ahead will be solid. Brickworks reported today profit in fiscal 2008 was A$101.478 million, down from $107.533 million in 2007. Revenue slid 0.8 per cent to A$553.716 million, while gross margin declined 12 per cent to A$187.18 million.
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Suncorp Group Limited
Ridley Corporation Limited
National Australia Bank Limited
Fairfax Financial Holdings Limited
Commonwealth Bank of Australia
Air New Zealand Limited