Sydney, Jan 13, 2009 AEST (ABN Newswire) - Wall Street fell overnight as investors expected a bleak start of the reporting season, which will show the impact of deepening economic crisis on companies.

Yesterday the Australian shares closed lower. The benchmark S&P/ASX200 index ended 52.4 points, or 1.4%, lower at 3683.3, while the broader All Ordinaries shed 56.4 points, or 1.53%, to 3624.0. The market is pessimistic about the company earnings ahead both in Australia and abroad as investors get prepared for the news that would bring some unpleasant surprises.

At 0829 AEDT on the Sydney Futures Exchange, the March Share Price Index futures contract was down 60 points at 3,615.

The Australian dollar has opened lower, falling below $US0.6900 as increased risk aversion reduced demand for the high-yielding currency. At 0700 AEDT, the Australian dollar was trading at $US0.6824/26, down from Monday's close of $US0.6938/42.

Oil prices fell for a fifth straight day to below US$40 as rising near-term supplies swamp demand amid continued economic turmoil. New York's main contract, light sweet crude for delivery in February, slumped $US3.24 to $US37.59 per barrel on the New York Mercantile Exchange.

Key Economic Facts and Figures

The ANZ job advertisement survey showed that for the year to December the total number of job ads fell 30%. ANZ economist said in a statement that the rate of decline in job advertising intensified in the month of December, providing further evidence that the demand for new labour across the Australian economy is now at recession levels.

Today, the Manpower-Melbourne Institute Employment Report for January is due.

M&A News

Rio Tinto(ASX:RIO) is considering the sale of its Coal & Allied subsidiary in the Hunter Valley as part of its effort to lower its heavy debt load, and a queue of global players are said to be interested in the assets.

Babcock & Brown Power(ASX:BBP) said it would offload Alinta EATM, an energy trading business that held loss-making contracts with liabilities of A$160 million for A$15 million.

OZ Minerals(ASX:OZL) said it had made significant progress in arranging a bridging facility with its bankers to cover expected cash shortfalls at a number of its operations. The company is understood to enter exclusive negotiations for at least one of the mines in sale of its Prominent Hill copper-gold mine in South Australia and its Martabe gold project in Indonesia.

Transurban Group(ASX:TCL) says it will not exercise its pre-emptive right to acquire Macquarie Infrastructure Group's(ASX:MIG) 50 per cent stake in Sydney's Westlink M7 toll road. Transurban said the price Macquarie wanted for the stake "would not have been value creative" for it.

Platinum junior International Goldfields (ASX:IGC) said yesterday it had finalised the terms and conditions of its long-mooted friendly cash takeover by joint venture partner Nkwe Platinum(ASX:NKP) and was hopeful of completing the deal by the end of March.
Important Corporate News

Property group Sunland(ASX:SDG) has lowered its guidance of net profit after tax for the 2009 financial year from A$109 million to A$74 million.

Goodman Fielder(ASX:GFF) yesterday reconfirmed its first-half profit guidance following a significant rise in its share price last week.

Rio Tinto(ASX:RIO) has begun its massive program of slashing capital spending and workers by shelving the $US2.15 billion Corumba iron ore expansion in Brazil due to the "severe market downturn".

Investors reacted strongly to the news that Rex Minerals Limited (ASX:RXM) announced the Company has received further high grade copper-gold results over substantial widths from drilling at its 100% owned Hillside Project on the Yorke Peninsula, South Australia.

Emerging lithium producer, Galaxy Resources Limited (ASX:GXY) announced the results of a Definitive Feasibility Study (DFS) completed for its Mt Cattlin Lithium-Tantalum project near Ravensthorpe.

Nicholas Curtis, Executive Chairman of Lynas Corporation(ASX:LYC), says China's tightening export quotas on Rare Earths provide additional opportunity for Lynas to the meet the supply deficit outside of China. The Chinese government has reduced 34% of the Rare earths export quota for the first half of 2009 compared to the same period last year.


Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344

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