Sydney, Jan 20, 2009 AEST (ABN Newswire) - US share markets were closed on Monday for the Martin Luther King holiday. The European market plunged sharply as Royal Bank of Scotland tipped to post the biggest annual loss in UK corporate history and investors worried the government bailout would not be enough to help the UK financial sector.

Australian shares yesterday closed higher after the lift of commodities prices. The benchmark S&P/ASX200 index was up 38.4 points, or 1.08 per cent, at 3,589.3, while the broader All Ordinaries index advanced 36.1 points, or 1.03 per cent, to 3,531 after a positive lead from Wall Street on Friday.

At 0755 AEDT on the Sydney Futures Exchange, the March Share Price Index futures contract was down 14 points at 3,535.

The Australian dollar opened weaker after more bad news from Britain's biggest government-controlled bank squeezed appetite for risk-driven currencies. At 0700 AEDT, the Australian dollar was trading at 67.14/19 US cents, down almost one US cent from Monday's close of 68.12/14. It was also buying 51.1 euro cents and 67.1 yen.

Oil fell more than $US2 towards $US34 a barrel on Monday after Russia and Ukraine signed a 10-year gas deal clearing the way for the resumption of supplies to a freezing Europe.

Key Economic Facts and Figures

Figures from the Australian Bureau of Statistics, released on Monday, showed housing finance for owner occupiers was up 1.4% in November to A$12.46 billion, on a seasonally-adjusted basis.

Prime Minister Kevin Rudd warned yesterday that the global economic crisis would get worse and signaled that the Government was preparing to announce initiatives to add to the A$36billion of measures it had already undertaken to reinforce the economy. The Government is assessing economic data to decide whether to develop another economic stimulus package.

M&A News

Sydney Gas(ASX:SGL) has recommended the all-cash bid from AGL Energy(ASX:AGK) and says shareholders are unlikely to achieve a better return on their investment than AGL's A$171 million takeover offer, given the company's capital needs.

CFS Retail Property Trust(ASX:CFX) has sold an Adelaide shopping centre for A$100 million. The company has signalled that its earnings will fall when they report interim results next month due to property revaluations.

Macquarie Media Group(ASX:MMG) offloaded its stakes in digital TV stations in two major regional centres last night. Its 50% stake in Darwin Digital Television went to Prime Media Group Ltd.(ASX:PRT), while 35.1% of Tasmanian Digital TV has been sold to WIN Television, for an undisclosed sum.

Important Corporate News

UBS cut its earnings guidance for BHP Billiton(ASX:BHP) by 11 per cent yesterday, citing concerns the world's largest miner is ominously quiet in the lead-up to its half-year result next month. BHP is reportedly considering the closure of its $2.2 billion Ravensthorpe nickel laterite mine.

Bakery and donut chain owner Retail Food Group(ASX:RFG) confirmed its earlier profit guidance and said it would achieve A$9.9 million first half net profit for fiscal 2009.

Wesfarmers Ltd(ASX:WES) is close to a deal to refinance A$7 billion in debt facilities due over the next two years as it is negotiating fresh terms with about two thirds of its creditors.

Fairfax Media(ASX:FXJ) has sold the Southern Star television production and distribution business to Endemol for A$75 million, plus an earn out.

Regenerative Stem Cell medicine company Mesoblast Limited (ASX:MSB)(PINK:MBLTY) announced that it has received Australian institutional ethics approval to begin the first trial of adult stem cell treatment for prevention of knee osteoathritis. In earlier trials a single injection of Mesoblast's allogeneic stem cells into the knee joint shortly after knee surgery resulted in sustained and significant protection of joint cartilage.

Industrea Limited(ASX:IDL) says it has secured new contracts worth more than US9.5 million of its mining productivity and safety equipment, including its inaugural sale in South Africa.

Globe Metals & Mining(ASX:GBE) has announced the further extensional drilling results from its 100% owned multi-commodity Kanyika Deposit in Central Malawi. Globe's Managing Director, Mr. Mark Sumich, said these results confirmed once again the existing Inferred JORC resource represents only a part of the true potential of this deposit.

The production of commercially viable syngas has been confirmed at Carbon Energy's (ASX:CNX) Undergound Coal Gasificiation (UCG) Plant in southeast Queensland. Carbon Energy says that the expectations for gas quality and quantity have been exceeded.


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

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