ShareDigest blog

Monday, March 15 – The Australian share market ended at a six-day low as
Moody’s Investors Service warned that the US government’s Aaa rating may
come under pressure and China cautioned the world could still fall into a
double-dip recession.

The All Ordinaries fell 32.1 points (0.66%) to 4,799.4 while the S&P/ASX 200
weakened 34.0 points (0.71%) to 4,784.1.

National Australia Bank (NAB)

NAB said it will spend $155m on renovating and relocating some of its retail
branches in the coming three years. The bank will also launch five new
business banking centres and will roll out a new branding campaign across
television, radio and online. The marketing campaign is to run over the
coming months. NAB lost 7 cents (0.26%) to close $26.83.

Telstra (TLS) and iiNet (IIN)

iiNet, Primus Telecom and Internode were named by the Australian government
as the first retail providers to offer services in Tasmania as part of the
planned $43bn national high-speed internet network. Still, most analysts
believe the project’s success hinges on the government’s ability to get
Telstra to agree to work with it on the national network’s construction.
Tasmania is being used as a pilot for the high-speed, fibre-to-the-home
network. The first services are expected to begin in July. TLS fell 2 cents
(0.65%) to $3.04. IIN rose 5 cents (2.16%) to $2.37.

Woolworths (WOW)

Woolworths is planning to offer more financial services to its customers, a
newspaper reported. The services could make up an important part of the
company’s growth strategy, chief executive Michael Luscombe was quoted as
saying. The company is planning prepaid debit cards, expanding its gift
cards and may reintroduce company-offered transaction accounts. WOW dipped
29 cents (1.02%) to $28.21.

Transurban Group (TCL)

Transurban said it will issue $250m of 2014 fixed rate notes, at 180 basis
points over swap. The notes will be used to repay bank debt. The group is
also arranging $230m of three-year bank facilities to replace facilities
maturing in June 2010. TCL weakened 5 cents (0.96%) to $5.16.

ResMed (RMD)

ResMed is defending an anti-trust case brought by a company trying to gain
access to distribute its products in the US, a newspaper reported. ResMed
and its main competitor in the sleep apnoea devices market, Philips
Respironics, a unit of Koninklijke Philips Electronics, have both been named
as defendants to a civil action in the Louisiana Eastern District Court
brought by Vaughn Medical Equipment Repair Service that alleges it has been
blocked in trying to supply their devices to users administered by the US
Department of Veterans Affairs. RMD fell 1 cent (0.15%) to $6.60.

Metcash (MTS)

Shareholders have approved plans for Metcash to take over distributor Mitre
10, injecting $55m in return for a 50.1% stake, a newspaper said. Mitre will
have the option to buy out the remaining stake in 2012 or 2013. MTS added 3
cents (0.74%) to $4.10.

Tatts Group (TTS) and Tabcorp (TAH)

Tatts Chief Executive Dick Mcllwain said the company has no plans to push
into casinos or hotels but said it will focus more on increasing revenues
from its lotteries business. He said the group is interested in Tabcorp’s
wagering business, but doesn’t expect Tabcorp to split wagering from its
other operations. For now the integration of NSW lotteries is the company’s
core focus, and there will likely be a trimming of staff in the newly bought
unit. Mcllwain indicated the base bid Tatts offered for NSW Lotteries was
“in the region of $700m, which wasn’t ridiculous”. The company eventually
paid $850m to the NSW government for NSW Lotteries. TTS fell 1 cent (0.41%)
to $2.44. TAH added 2 cents (0.29%) to $6.82.

Transfield Services (TSE)

Transfield said its North American business arm has been selected to service
a new 55km stretch of a Canadian highway for the next 30 years. Its
partnership with Dexter Construction has been named preferred proponent by
the New Brunswick province to provide operations, maintenance and services
to the Route 1 Gateway Project, with the contract expected to be finalised
in the next four weeks. Transfield did not provide a value on the contract,
but said its Transportation Infrastructure subsidiary has secured more than
$800m worth of contracts in North America since the start of fiscal 2010 on
July 1. TSE rose 7 cents (1.7%) to $4.19.

Economic News

ABS – January Lending Statistics

The value of commercial finance issued in Australia in January fell 1.6%
after seasonal adjustment from December to $26.33bn, the Australian Bureau
of Statistics said. Personal finance fell 1.5% in January in seasonally
adjusted terms from the previous month to $6.92bn. The decline in personal
finance comprised a 1.1% fall in revolving credit and a 2.1% fall in fixed
lending. A fall of 6.7% in revolving credit for commercial finance was
accompanied by a rise of 0.3% in fixed-lending commitments. Lease finance
fell by 10.3% after seasonal adjustment to $363m.

Bank Loan Losses have peaked

Loan losses for Australian banks have peaked and financial conditions are
strong and improving, said Malcolm Edey, assistant governor (financial
system) at the Reserve Bank of Australia. While losses for banks in
countries like the US and in Europe were still rising, the situation in
Australia is far superior. Edey says, “The evidence now is that bank loan
losses have peaked, profitability is improving, and the condition of the
financial sector is also improving.”

The NZSX50 rose 6.01 points (0.19%) to 3,231.15 while the Nikkei firmed 0.72
points (0.01%) to be last quoted at 10,751.98 and the Hang Seng dropped
182.82 points (0.86%) to 21,026.92.

Thursday, March 11 – The Australian share market ended flat in quiet trading
as weaker-than-expected jobs data dampened investor enthusiasm.

The All Ordinaries fell 4.3 points (0.09%) to 4,825.5 while the S&P/ASX 200
weakened 5.8 points (0.12%) to 4,814.2.

Leighton Holdings (LEI) and Macmahon Holdings (MAH)

Leighton Holdings said it has won a $463m contract to build a 7.6km twin
track tunnel as part of a high speed rail link planned between China and
Hong Kong. Leighton’s Asia subsidiary said work on the contract to build
tunnels and ventilation buildings between Tse Uk Tsuen and Shek Yam in Hong
Kong as part of the XRL project, is set to start this month, with completion
expected in 2015. Separately, Macmahon Holdings said it has a $115m
agreement with Leighton Asia to provide expertise and technical support to
help deliver the project. LEI firmed 65 cents (1.67%) to $39.65. MAH rose 3
cents (4%) to $0.78.

Goodman Fielder (GFF)

Goodman Fielder said the competition regulator has delayed its ruling on the
food group’s proposed sale of its fats and oils business to Cargill Inc. The
Australian Competition and Consumer Commission plans to release its findings
on April 1 instead of the original date of March 18. GFF fell 1 cent (0.67%)
to $1.48.

Myer (MYR)

Myer said first-half net profit rose 38% to $115m, up from $83m a year ago.
Headline sales were $1.8bn, up 2% from a year ago. The reported profit
figure doesn’t account for the $93.5m of initial public offer costs the
company recorded in the first half. Myer said sales were growing above 2% in
the first six weeks of the current period but that total sales growth would
fall between 0% and 2%. The group said it remains cautious as it is entering
a period in which year-ago comparable figures were bolstered by federal
stimulus spending. Rising interest rates also could constrain customers, the
group said. Management expects full-year sales to rise between 1% and 2%
from a year ago. The group declared an interim dividend of 10.5 cents. MYR
dipped 3 cents (0.86%) to $3.44.

Cape Lambert Resources (CFE)

Cape Lambert Resources announced that it has sold its Lady Annie copper mine
in Queensland to an Asian buyer for about $35m more than it estimates it
would have raised in an abandoned public float of the mine. The initial
public offering would have generated about $108.5m for Cape Lambert, with
the company having planned to retain a 15% stake in the listed entity. The
Lady Annie assets include open pit mines and a heap leach processing plant
as well as thousands of square kilometres of exploration tenements in
Queensland’s north. CFE shares are in a trading halt and were last quoted at
$0.445.

Economic News

February Labour Force Figures

The Australian Bureau of Statistics said Australia’s unemployment rate rose
to a seasonally adjusted 5.3% in February, from a revised 5.2% in January,
and that 400 new jobs were created in the month. Unemployment was in line
with expectations, but new jobs fell short with economists having expected
15,000 new jobs. The number of people in full-time work rose by 11,400 to
7.66m in February from 7.65m in January, while the number of people in
part-time work fell 11,000 to 3.31m from 3.32m.

The Bureau said its seasonally adjusted workforce participation rate, the
proportion of working-age persons at work or actively seeking work, fell to
65.2% in February from 65.3% in January. Aggregate monthly hours worked rose
2.4% in February from January to 1.55bn hours, reversing a trend in which
hours worked remained low even as thousands of jobs were added.

4Q Export Figures

The Australian Bureau of Agricultural and Resource Economics said Australian
earnings from exports of mineral and energy products rose 1.3% to $30.85bn
in the fourth quarter of 2009 from the third quarter, but were still down
35% from $47.15bn a year earlier. ABARE highlighted strong demand for iron
ore and coal with export volumes of these products rising to record levels
in the quarter. The record volumes of bulk commodity exports were attributed
to demand from steel mills and power stations in Japan, the Republic of
Korea and China. Despite earnings from exports of mineral and energy
products falling sharply from the 2008 fourth quarter, resources exports
still accounted for greater than half of total exports of goods and services
in the fourth quarter.

The slight increase in fourth quarter export earnings came despite a 9% rise
in the value of the Australian dollar. ABARE’s index of export prices of
Australian energy and mineral resources fell 4.7% in the fourth quarter from
the third quarter and was down 42% from a year earlier. Higher world prices
for metals and other minerals such as aluminium, copper, gold and zinc
largely offset the effect of the higher Australian dollar in the fourth
quarter.

The NZSX50 dropped 2.75 points (0.09%) to 3,223.45 while the Nikkei rose
101.03 points (0.96%) to be last quoted at 10,664.95 and the Hang Seng shed
74.07 points (0.35%) to 21,134.22.

Wednesday, March 10 – The Australian share market Wednesday ended mostly
flat as strong Chinese imports data helped it recover from disappointing
Australian housing finance data.

The All Ordinaries rose 0.5 points (0.01%) to 4,829.8 while the S&P/ASX 200
fell 0.1 points (0.00%) to 4,820.0.

ANZ (ANZ)

ANZ said it received regulatory approvals for its acquisition of the Royal
Bank of Scotland’s Singapore and Taiwan businesses. ANZ said its
acquisitions of RBS’ Asian assets are progressing according to plan, with
Hong Kong, Taiwan, Singapore and Indonesia to be completed in the next three
months. The acquisition of RBS’ businesses in Vietnam and Philippines has
also been completed. ANZ gained 12 cents (0.5%) to $23.94.

Orica (ORI)

Orica said a court ruling against it over a dispute with Australia’s tax
authorities is likely to have a $192m adverse impact on its profits. Orica
said that the Federal Court has only “partially allowed” its appeal against
an amended tax assessment issued by the Australian Taxation Office in 2004
relating to the sale of its pharmaceutical business to Zeneca BV in 1998.
“The effect of the Federal Court judgement is that the ATO’s claim has, for
the most part, been upheld,” said the company, adding it is considering
appealing the decision within the allowed 21 days. After previously paying
around 50% of the amount owing on the amended assessment, a further cash
payment of around $126m may be required, with an after-tax effect of around
$92m. ORI rose 30 cents (1.2%) to $25.31.

Qantas (QAN)

Qantas Airways carried 5.7% more passengers in January than it did a year
before, the company said. Revenue per passenger kilometres decreased by 0.2%
and available seat kilometres rose 0.6%, resulting in a revenue seat factor
decline of 0.6 percentage point to 81.2%. Passenger numbers in Qantas’
international business fell 16.4% in January on year but rose 78.4% in the
Jetstar international business. Jetstar domestic passenger numbers rose 0.4%
but Qantas domestic numbers fell 4.8%. QAN rose 7 cents (2.53%) to $2.84.

Primary Health Care (PRY)

Primary Health Care has filed legal proceedings against Australian General
Practitioners Network to prevent its use of “Primary Health Care” as a
trading name. Australia’s largest pathology services company said AGPN and
its divisions recently applied for trademarks and business names that
include the phrase “Primary Health Care”. “Medical professionals to whom we
provide services know us as Primary Health Care so we need to enforce our
legal rights to prevent confusion in the marketplace,” Primary Health Care
Managing Director Edmund Bateman said in statement. PRY advanced 7 cents
(1.73%) to $4.12.

Southern Cross Media (SXL)

Southern Cross Media has refinanced a $375m debt facility with a consortium
of six banks for a four year term, which it says will enable it to proceed
with its restructure and sever its management agreement with Macquarie
Group. The company said in a statement earlier that it should reach
financial close on the refinancing of the facility by its Australian media
arm which will enable the management internalisation to proceed. A previous
pre-condition, that its US business American Consolidated Media reach
financing agreement after breaching lending covenants, has been waived. The
company said Stephen Kelly, currently Chief Financial Officer at SMS
Management & Technology, will replace Liam Buckley as CFO in April following
the restructure. SXL firmed 8 cents (3.9%) to $2.13.

Alesco (ALS)

Alesco downgraded its full year earnings guidance and warned of more
writedowns in its water products business. Alesco said it now expects
earnings per share for the year to May 31 to be 24 to 27 cents, from
guidance it delivered just six weeks ago of 34 to 36 cents. The company said
it experienced surprisingly soft trading conditions in February and that the
water products business continued to underperform despite management efforts
to clean it up. The carrying value of the business will be reviewed
following completion of the company’s 2011 financial year budget. While
improvements from cost cutting are evident, the company said overall revenue
for the third quarter was 9% lower than it expected at the half year and 6%
lower than the same quarter last year. Fourth-quarter revenue is expected to
be much weaker than anticipated. ALS fell $1.44 (31.58%) to $3.12.

Atlas Iron (AGO) and Aurox Resources (AXO)

Atlas Iron said it has agreed to merge with Aurox Resources in a share deal
valuing Aurox at $143m, a $90m premium to its current market capitalisation.
Aurox shareholders will receive one Atlas share for every three Aurox shares
held. Aurox’s board has unanimously recommended the merger, which would
create an iron ore miner with a combined market capitalisation of $1.13bn.
An additional 10m to 12m metric tonne long-term port capacity at Port
Hedland will be created and Atlas will have ownership of the Balla Balla
magnetite project, the company said. AGO increased 10 cents (4.52%) to
$2.31. AXO added 47 cents (172.22%) to $0.74.

Economic News

Housing Finance

Housing finance dropped for a fourth straight month in January, subdued by
interest rate hikes and the withdrawal of government housing stimulus in
late 2009. The number of housing-finance approvals fell a seasonally
adjusted 7.9% in January from December, the Australian Bureau of Statistics
said. Economists had expected a rise of 2.0%. However, the value of housing
finance being directed to property investors ticked higher during the month
by 0.9%.

The NZSX50 firmed 12.99 points (0.40%) to 3,226.19 while the Nikkei weakened
3.73 points (0.04%) to 10,563.92 and the Hang Seng added 7.95 points (0.04%)
to be last quoted at 21,215.50.

Monday, March 8 – The Australian share market rose for a seventh consecutive
day, hitting a seven-week high, after stronger-than-expected US economic
data boosted offshore equities and commodities markets.

The All Ordinaries rose 46.2 points (0.97%) to 4,819.6 while the S&P/ASX 200
firmed 40.7 points (0.85%) to 4,807.9.

BHP (BHP)

BHP Billiton has succeeded in pricing a large portion of its coking coal
with a range of international customers on a quarterly basis. The company
said it has reached an agreement with customers in Europe, China, India and
Japan, as part of its commitment to achieve market clearing prices across
all of its bulk commodities. Japan’s major steelmakers agreed to a 55% hike
in price for the April-June quarter, marking a significant step away from
the annual benchmark system. Japanese steel mills will buy coking coal from
the BHP Mitsubishi Alliance at US$200/mt, up from last year’s benchmark
price of US$129/mt. BHP increased $1.01 (2.38%) to $43.51.

Suncorp (SUN) and IAG (IAG)

Suncorp-Metway said it expects the number of insurance claims from severe
weather events in Victoria and Queensland in recent days to continue to
rise, noting it is too early to estimate their cost. A spokesman said the
firm has received around 6,000 claims from policyholders across all its
insurance brands, including GIO, AAMI and APIA, in both states. “As of
Sunday, we had about 5000 claims coming out of Melbourne. We do expect that
number to increase as people return from the long weekend,” said the
spokesman, adding there has been “about 1,000″ claims lodged from
policyholders across southern Queensland where there has been widespread
flooding. He said it is too early to estimate the costs to the firm from
either event, as they focus on putting extra claims assessors into affected
areas to process the claims as quickly as possible. A spokesman for
Insurance Australia Group (IAG) said it is “still too early,” to comment on
the impact of bad weather. SUN fell 15 cents (1.73%) to $8.54 and IAG fell 8
cents (1.97%) to $3.98.

Arrow Energy (AOE)

PetroChina launched a bid with Royal Dutch Shell for Arrow Energy. Royal
Dutch Shell and PetroChina are offering to pay around $3.26bn in cash for
Arrow Energy. Shareholders are being offered $4.45 a share, representing a
28% premium from Arrow’s last closing price of $3.48. Arrow said
shareholders would also get one share in a new entity that would comprise
its international business for each existing Arrow share. Arrow’s board has
recommended shareholders take no action on the offer. It is unclear how
large a role PetroChina is playing in the joint bid. The offer is currently
non-binding and conditional. A spokesman for Shell confirmed the bid is only
for Arrow’s Australian assets and wouldn’t speculate if the company would be
prepared to invest beyond its current 10% interest in Arrow’s offshore
business. AOE shot up $1.63 (46.84%) to $5.11.

Western Areas (WSA)

Western Areas said it has made a new nickel sulfide discovery at its
Sandstone joint venture with Troy Resources in Western Australia. A drill
result has returned spot values of 1.0% to 1.5% nickel for disseminated
sulfides and up to 9.5% nickel for the vein sulfides. “While the drilling at
Sandstone is still at a very early stage, the results are already considered
to be very encouraging,” Western Areas said. WSA rose 6 cents (1.24%) to
$4.91.

Charter Hall Retail (CQR)

Charter Hall Retail said it acquired two retail properties in Australia for
$69.8m following its recent restructure. The trust said it bought the Manuka
Terrace shopping centre in Canberra and the Mile End Homemaker Centre in
Adelaide, at an average yield of 9.5% before acquisition costs, using
existing cash reserves and debt capacity. The REIT expects the properties to
be accretive to earnings in the first year following the purchase. CQR
remained unchanged at $0.59.

The NZSX50 added 8.17 points (0.25%) to 3,222.82 while the Nikkei
strengthened 216.96 points (2.09%) to be last quoted at 10,585.92 and the
Hang Seng gained 398.12 points (1.92%) to be last quoted at 21,186.09.

Tuesday, March 2 – The Australian share market crept up to five-day high in
slow trading after moderately strong gains in offshore equities and
commodities markets.

The All Ordinaries rose 15.0 points (0.32%) to 4,709.9 while the S&P/ASX 200
firmed 15.4 points (0.33%) to 4,701.9.

Rio Tinto (RIO)

Rio Tinto said that it is well placed to consider investment opportunities,
having divested over US$10bn worth of assets to ease a heavy debt burden.
The miner said over US$7bn of divestments had been completed since the start
of 2009, with the sale of its Alcan Packaging Food Americas business for
US$1.2bn bringing it past US$10bn.

In other news, Rio Chief Executive Tom Albanese said he is “somewhat
concerned” the global economy may dip back into recession, dampening demand
for commodities in the next 18 to 24 months. “I am somewhat concerned about
a W-shaped recession,” Albanese said. Sovereign risk issues in Greece and
Spain, a probable slowdown in China’s stimulus spending and possible limits
on US stimulus spending all offer near-term risks, he said. But longer term,
Albanese said he was confident demand from emerging markets like China and
India would underpin rising demand for iron ore, coal, copper and other of
the company’s products. RIO gained 62 cents (0.87%) to $72.02.

Telstra (TLS)

Telstra said it is “very concerned” by draft legislation released by the
Australian government last week that could give Canberra the power to allow
the planned $43bn National Broadband Network to become a retailer in some
circumstances. The group also reiterated its opposition to a separate piece
of legislation aimed at forcing Telstra to split its retail and wholesale
businesses and repeated its assertion that any move to split could cost up
to $1bn and take five years to complete. Telstra said it remains engaged
with both the government and NBN Co. but again noted that there are several
complex issues on which it needs clarity. TLS fell 1 cent (0.34%) to $2.93.

Leighton (LEI)

Leighton said that it has signed an agreement to recommence works on its
$125m contract to provide mining services at the Toka Tindung gold project
in Indonesia. Leighton said its Leighton Asia unit will provide a range of
services for PT Meares Soputan Mining and PT Tambang Tondano Nusajaya at the
mine, including land clearing, civil works, drilling and the selective
mining and hauling of ore. “This award represents an important milestone to
our business in Indonesia,” Leighton Asia managing director Hamish Tyrwhitt
said. “The commencement of this project has diversified Leighton into a new
commodity and further increased our work-in-hand to in excess of $4bn,”
Tyrwhitt added. Initial civil works at the mine, in North Sulawesi, will
start in May, with mining operations expected to start in July. LEI
increased 65 cents (1.71%) to $38.60.

Qantas (QAN)

Qantas Airways said its Chief Financial Officer and director Colin Storrie
will resign Friday for personal and health reasons. Qantas said Gareth
Evans, the CFO of Qantas mainline airline, will replace Storrie temporarily
until a permanent replacement is named. “I understand why Colin has decided
to spend more time with his family but we will miss working with him and
wish him well as his health recovers fully,” Qantas Chief Executive Alan
Joyce said. QAN rose 8 cents (3.05%) to $2.70.

Tatts Group (TTS)

New South Wales sold its lotteries business to Tatts Group for a price that
exceeded most analysts’ expectations and was “by far” the strongest bid for
the business, according to the state’s Treasurer. Tatts said it would pay
$850m in cash for the license and purchase of the state lotteries. New South
Wales said the sale would garner proceeds of more than $1bn, with NSW
Lotteries transferring roughly $160m of cash and other assets to the state
government as part of the deal. The NSW Lotteries purchase is expected to
contribute $120m of EBITDA by 2014, Tatts said. Tatts added that the
purchase will not threaten its standing within existing debt covenants and
the group will be able to maintain its current dividend policy. The New
South Wales government said the offer was binding and that Tatts would have
an exclusive, 40-year license to conduct public lotteries, excluding Keno,
throughout the state. TTS weakened 18 cents (7.26%) to $2.30.

Bank of Queensland (BOQ)

Bank of Queensland appointed Ram Kangatharan to the newly created role of
Chief Operating Officer. The group said it has commenced a search for a new
chief financial officer to replace Kangatharan in that position. “The
strategic opportunities available to us are significant and as such, I have
decided to consolidate all non-regulatory and legal operating units under
one executive to hardwire the small bank differences, and to move to a more
process- and outcome-focused organisation,” Bank of Queensland Chief
Executive David Liddy said. “In this role, Mr. Kangatharan will have
responsibility for ensuring our day-to-day operations support our strategic
operational objectives, which include achieving a cost-to-income ratio of
45% by 2011 and 15% return on equity by 2012, and Ram will be a key driver
in achieving this differential,” Liddy said. BOQ dropped 8 cents (0.72%) to
$11.10.

Nufarm (NUF)

Nufarm said it expects net profit of $80m to $100m this fiscal year as
shareholders strongly supported Sumitomo Chemical’s proposal to take a
strategic stake in the firm. Chief Executive Doug Rathbone said Nufarm
expects to post a $40m loss for the six months to the end of January later
this month, including a $33m loss from material items, including the impact
from glyphosate trading. However, he said the group expects a second half
profit of between $120m and $140m, with a full year operating profit of
between $110m and $130m. NUF fell 28 cents (2.87%) to $9.47.

Auckland Airport (AIA)

Auckland International Airport said international passenger numbers rose
3.8% on year in January. “More than 154,000 people travelled during the week
ending January 10 2010, the single largest weekly international passenger
volume ever at Auckland Airport,” the company added. Domestic passenger
numbers rose 11.8% on year, the largest growth of any month so far in this
financial year, it said. AIA advanced 2 cents (1.38%) to $1.47.

Economic News

Interest rate rise

The Reserve Bank of Australia raised its cash rate target a quarter of a
percentage point to 4.00%. The policy tightening, which was forecast by a
majority of economists, follows a pause in February. The RBA indicated that
it will continue to lead Group of 20 countries in removing stimulus from the
economy, saying that the latest rate rise is just another step in a process
of raising rates back to normal. “The board judges that with growth likely
to be close to trend and inflation close to target over the coming year, it
is appropriate for interest rates to be closer to average. Today’s decision
is a further step in that process,” RBA Governor Glenn Stevens said. Major
commercial banks said following the RBA move that their lending rates are
again under review. Treasurer Wayne Swan said that banks won’t be justified
if they continue the recent practice of raising lending rates by more than
the RBA hike.

Australian January Building Approvals Fall 7.0% On Month

The total number of Australian houses and apartments approved for
construction fell a seasonally adjusted 7.0% in January from December, the
Australian Bureau of Statistics said. Economists had expected on average
that total residential building approvals rose 0.9% from the month before.
Private-sector house approvals rose a seasonally adjusted 0.3% from a month
earlier and rose 36.4% from a year earlier, the ABS said.

Australian Retail Sales

Australian retail sales rose a higher-than-expected 1.2% to a seasonally
adjusted $20.14bn in January from $19.91bn in December and rose from
$19.55bn a year earlier, the Australian Bureau of Statistics said.
Economists surveyed ahead of the announcement on average had expected a 0.5%
rise in sales for January. Sales had fallen a revised 0.9% in December on
month. The bureau said the trend estimate for retail sales rose 0.4% to
$20.09bn in January from December. The trend estimate further smoothes the
seasonally adjusted numbers.

The NZSX50 added 19.09 points (0.60%) to 3,183.24 while the Nikkei
strengthened 38.97 points (0.38%) to be last quoted at 10,211.03 and the
Hang Seng fell 173.94 points (0.83%) to 20,882.99.

Thursday, March 18 – The Australian share market rose slightly in mixed
trading in anticipation of Wall Street’s continued positive reaction to a
supportive statement from the US Federal Reserve.

The All Ordinaries rose 10.8 points (0.22%) to 4,877.7 while the S&P/ASX 200
firmed 9.9 points (0.20%) to 4,863.1.

BHP Billiton (BHP)

BHP’s Chairman Don Argus in his final letter to shareholders said he
remained cautious about the state of the global economy, as countries face
the difficult task of winding back stimulus measures. Given the continued
uncertainty surrounding financial markets, he said BHP’s balance sheet
gearing of 15% was considered prudent at this point in time.

In operational news, BHP said production at its Kwinana nickel refinery in
Western Australia could be interrupted for up to two weeks due to a hydrogen
shortage. There was no estimate of lost production. Total output at BHP’s
Nickel West operations, including Kwinana in Western Australia stood at
59,400 metric tonnes of nickel for the six months to December 31.

In another closure, BHP said it will stop railing coal to its Hay Point
export terminal as stockpiles at the port are nearly full. The port is now
facing bad weather associated with Tropical Cyclone Ului and production at
some of BMA’s mines are being affected and could impact production
schedules.

In separate news, the Australian Taxation Office said it is still
considering whether to launch an appeal after losing the latest round in its
long-running $2.2bn tax dispute with BHP. BHP dropped 14 cents (0.32%) to
$43.16.

Rio Tinto (RIO)

Talks between Rio and Chinalco for a joint investment in the Simandou iron
ore mine in Guinea are closer to fruition, Lu Youqing, a senior executive of
Chinalco said. Lu also acknowledged that Chinalco was pursuing membership on
the board of directors in Rio Tinto, though he didn’t indicate how many
seats.

Separately, Rio’s copper division head Andrew Harding said the global copper
market appears to be pricing in expectations of continued supply constraints
and more tight market conditions. Harding said that the global financial
crisis has led to significant delays in copper projects. Harding added the
long-term demand outlook remains robust due to supply side constraints. RIO
rose 29 cents (0.38%) to $76.99.

Lend Lease (LLC)

The Victorian government said it has signed a contract with Lend Lease unit
Bovis-Lend-Lease for the construction of the $300m Melbourne Wholesale
Fruit, Vegetable & Flower Market. Bovis Lend Lease commenced early works on
site in late 2009 and has now been signalled to commence construction. The
project has been estimated to create 600 jobs and inject $870m into the
Victorian economy. The new market is expected to be completed in 2012. LLC
rose 7 cents (0.81%) to $8.72.

Oz Minerals (OZL)

OZ posted an initial gold resource at its Okvau project in Cambodia of
650,000 ounces. Drilling carried out to date has identified an inferred
mineral resource of 8.1m metric tonnes of ore at grades of 2.3 grams per
tonne for 605,000 ounces of gold. OZL shed 2 cents (1.71%) to $1.15.

Macarthur Coal (MCC)

Macarthur said it has started agreeing prices for its pulverized, or PCI,
coal at near double prices. Its settlements so far have featured a shift
from annual pricing resets to quarterly and half yearly resets, continuing a
trend to more short-term pricing of coal contracts. Macarthur did not say
what price its contracts had been struck at, but said they were in line with
other miners’ settlements. MCC firmed 30 cents (2.5%) to $12.30.

Sigma Pharmaceuticals (SIP)

Sigma said it doesn’t expect to pay a final dividend and is renegotiating
the terms of its banking covenants amid a forecast fall in cash flow and
significant pressure on its balance sheet. Sigma said it is still in the
process of finalising its full year accounts for the year to January 31.
This is likely to result in a material reduction in the carrying amount of
goodwill. The full year is also likely to be affected by inventory
writedowns and redundancy costs. SIP is in a trading halt and was last
quoted at $0.90.

Murchison Metals (MMX)

Murchison Metals and joint venture partner Mitsubishi said they have
increased the planned initial capacity of their $4bn Oakajee iron ore port
development by 29% to 45m metric tonnes per year and identified three
potential foundational customers. CEO of the joint venture, Oakajee Port &
Rail (OPR), John Langoulant said the increase of planned initial capacity to
45m tonnes from the previous 35m tonnes followed strong interest from
regional iron ore miners. MMX strengthened 12 cents (4.63%) to $2.71.

BT Investment Management (BTT)

BT Investment Management said its agreement to manage $16.7bn in investments
for Westpac wealth management arm BT Financial Group has been extended to 31
March 2015, from 19 October, with no change to the fee rates payable or the
make-up of the funds it manages. In a key change to the deal, BTT has lost
its exclusive management rights over the funds, giving BT Financial the
right to appoint other investment managers where it is considered to be in
the best interests of its investors. BTT rose 5 cents (1.69%) to $3.01.

Economic News

Merchandise Imports

Australian merchandise imports rose 2% to $17.01bn in February from $16.67bn
in January in seasonally adjusted terms, the Australian Bureau of Statistics
said. The bureau said machinery and transport equipment accounted for the
largest proportion of imports in original terms and were valued at $5.9bn.
Monthly trade figures for March, which will include seasonally adjusted
import and export figures, will be issued on April 21.

Forecasts For Long Term Energy Sources

In a new report influenced by current developments in global energy
sourcing, Abare released a forecast for the long term outlook for energy for
the country. Primary energy consumption in Australia will increase by 35% by
fiscal 2029-30 or by an average 1.4% a year. Coal and oil will continue to
supply the bulk of the nation’s primary energy needs, although their share
in the energy mix is expected to decline. By 2030, coal should account for
23% of primary energy consumption, oil will hold unchanged at 36% while the
use of natural gas and coal seam gas is expected to grow strongly by an
average 3.4% a year to account for 33% of primary energy use by 2030.
Renewable energy is projected to have the strongest growth prospects. Wind
energy is projected to account for most of the increase in electricity
generation from renewable sources, representing 12% of electricity
generation in 2030.

The NZSX50 added 19.73 points (0.62%) to 3,220.69 while the Nikkei fell
102.95 points (0.95%) to 10,744.03 and the Hang Seng strengthened 34.29
points (0.16%) to be last quoted at 21,418.78.

Thursday, March 18 – The Australian share market rose slightly in mixed
trading in anticipation of Wall Street’s continued positive reaction to a
supportive statement from the US Federal Reserve.

The All Ordinaries rose 10.8 points (0.22%) to 4,877.7 while the S&P/ASX 200
firmed 9.9 points (0.20%) to 4,863.1.

BHP Billiton (BHP)

BHP’s Chairman Don Argus in his final letter to shareholders said he
remained cautious about the state of the global economy, as countries face
the difficult task of winding back stimulus measures. Given the continued
uncertainty surrounding financial markets, he said BHP’s balance sheet
gearing of 15% was considered prudent at this point in time.

In operational news, BHP said production at its Kwinana nickel refinery in
Western Australia could be interrupted for up to two weeks due to a hydrogen
shortage. There was no estimate of lost production. Total output at BHP’s
Nickel West operations, including Kwinana in Western Australia stood at
59,400 metric tonnes of nickel for the six months to December 31.

In another closure, BHP said it will stop railing coal to its Hay Point
export terminal as stockpiles at the port are nearly full. The port is now
facing bad weather associated with Tropical Cyclone Ului and production at
some of BMA’s mines are being affected and could impact production
schedules.

In separate news, the Australian Taxation Office said it is still
considering whether to launch an appeal after losing the latest round in its
long-running $2.2bn tax dispute with BHP. BHP dropped 14 cents (0.32%) to
$43.16.

Rio Tinto (RIO)

Talks between Rio and Chinalco for a joint investment in the Simandou iron
ore mine in Guinea are closer to fruition, Lu Youqing, a senior executive of
Chinalco said. Lu also acknowledged that Chinalco was pursuing membership on
the board of directors in Rio Tinto, though he didn’t indicate how many
seats.

Separately, Rio’s copper division head Andrew Harding said the global copper
market appears to be pricing in expectations of continued supply constraints
and more tight market conditions. Harding said that the global financial
crisis has led to significant delays in copper projects. Harding added the
long-term demand outlook remains robust due to supply side constraints. RIO
rose 29 cents (0.38%) to $76.99.

Lend Lease (LLC)

The Victorian government said it has signed a contract with Lend Lease unit
Bovis-Lend-Lease for the construction of the $300m Melbourne Wholesale
Fruit, Vegetable & Flower Market. Bovis Lend Lease commenced early works on
site in late 2009 and has now been signalled to commence construction. The
project has been estimated to create 600 jobs and inject $870m into the
Victorian economy. The new market is expected to be completed in 2012. LLC
rose 7 cents (0.81%) to $8.72.

Oz Minerals (OZL)

OZ posted an initial gold resource at its Okvau project in Cambodia of
650,000 ounces. Drilling carried out to date has identified an inferred
mineral resource of 8.1m metric tonnes of ore at grades of 2.3 grams per
tonne for 605,000 ounces of gold. OZL shed 2 cents (1.71%) to $1.15.

Macarthur Coal (MCC)

Macarthur said it has started agreeing prices for its pulverized, or PCI,
coal at near double prices. Its settlements so far have featured a shift
from annual pricing resets to quarterly and half yearly resets, continuing a
trend to more short-term pricing of coal contracts. Macarthur did not say
what price its contracts had been struck at, but said they were in line with
other miners’ settlements. MCC firmed 30 cents (2.5%) to $12.30.

Sigma Pharmaceuticals (SIP)

Sigma said it doesn’t expect to pay a final dividend and is renegotiating
the terms of its banking covenants amid a forecast fall in cash flow and
significant pressure on its balance sheet. Sigma said it is still in the
process of finalising its full year accounts for the year to January 31.
This is likely to result in a material reduction in the carrying amount of
goodwill. The full year is also likely to be affected by inventory
writedowns and redundancy costs. SIP is in a trading halt and was last
quoted at $0.90.

Murchison Metals (MMX)

Murchison Metals and joint venture partner Mitsubishi said they have
increased the planned initial capacity of their $4bn Oakajee iron ore port
development by 29% to 45m metric tonnes per year and identified three
potential foundational customers. CEO of the joint venture, Oakajee Port &
Rail (OPR), John Langoulant said the increase of planned initial capacity to
45m tonnes from the previous 35m tonnes followed strong interest from
regional iron ore miners. MMX strengthened 12 cents (4.63%) to $2.71.

BT Investment Management (BTT)

BT Investment Management said its agreement to manage $16.7bn in investments
for Westpac wealth management arm BT Financial Group has been extended to 31
March 2015, from 19 October, with no change to the fee rates payable or the
make-up of the funds it manages. In a key change to the deal, BTT has lost
its exclusive management rights over the funds, giving BT Financial the
right to appoint other investment managers where it is considered to be in
the best interests of its investors. BTT rose 5 cents (1.69%) to $3.01.

Economic News

Merchandise Imports

Australian merchandise imports rose 2% to $17.01bn in February from $16.67bn
in January in seasonally adjusted terms, the Australian Bureau of Statistics
said. The bureau said machinery and transport equipment accounted for the
largest proportion of imports in original terms and were valued at $5.9bn.
Monthly trade figures for March, which will include seasonally adjusted
import and export figures, will be issued on April 21.

Forecasts For Long Term Energy Sources

In a new report influenced by current developments in global energy
sourcing, Abare released a forecast for the long term outlook for energy for
the country. Primary energy consumption in Australia will increase by 35% by
fiscal 2029-30 or by an average 1.4% a year. Coal and oil will continue to
supply the bulk of the nation’s primary energy needs, although their share
in the energy mix is expected to decline. By 2030, coal should account for
23% of primary energy consumption, oil will hold unchanged at 36% while the
use of natural gas and coal seam gas is expected to grow strongly by an
average 3.4% a year to account for 33% of primary energy use by 2030.
Renewable energy is projected to have the strongest growth prospects. Wind
energy is projected to account for most of the increase in electricity
generation from renewable sources, representing 12% of electricity
generation in 2030.

The NZSX50 added 19.73 points (0.62%) to 3,220.69 while the Nikkei fell
102.95 points (0.95%) to 10,744.03 and the Hang Seng strengthened 34.29
points (0.16%) to be last quoted at 21,418.78.

Thursday, March 18 – The Australian share market rose slightly in mixed
trading in anticipation of Wall Street’s continued positive reaction to a
supportive statement from the US Federal Reserve.

The All Ordinaries rose 10.8 points (0.22%) to 4,877.7 while the S&P/ASX 200
firmed 9.9 points (0.20%) to 4,863.1.

BHP Billiton (BHP)

BHP’s Chairman Don Argus in his final letter to shareholders said he
remained cautious about the state of the global economy, as countries face
the difficult task of winding back stimulus measures. Given the continued
uncertainty surrounding financial markets, he said BHP’s balance sheet
gearing of 15% was considered prudent at this point in time.

In operational news, BHP said production at its Kwinana nickel refinery in
Western Australia could be interrupted for up to two weeks due to a hydrogen
shortage. There was no estimate of lost production. Total output at BHP’s
Nickel West operations, including Kwinana in Western Australia stood at
59,400 metric tonnes of nickel for the six months to December 31.

In another closure, BHP said it will stop railing coal to its Hay Point
export terminal as stockpiles at the port are nearly full. The port is now
facing bad weather associated with Tropical Cyclone Ului and production at
some of BMA’s mines are being affected and could impact production
schedules.

In separate news, the Australian Taxation Office said it is still
considering whether to launch an appeal after losing the latest round in its
long-running $2.2bn tax dispute with BHP. BHP dropped 14 cents (0.32%) to
$43.16.

Rio Tinto (RIO)

Talks between Rio and Chinalco for a joint investment in the Simandou iron
ore mine in Guinea are closer to fruition, Lu Youqing, a senior executive of
Chinalco said. Lu also acknowledged that Chinalco was pursuing membership on
the board of directors in Rio Tinto, though he didn’t indicate how many
seats.

Separately, Rio’s copper division head Andrew Harding said the global copper
market appears to be pricing in expectations of continued supply constraints
and more tight market conditions. Harding said that the global financial
crisis has led to significant delays in copper projects. Harding added the
long-term demand outlook remains robust due to supply side constraints. RIO
rose 29 cents (0.38%) to $76.99.

Lend Lease (LLC)

The Victorian government said it has signed a contract with Lend Lease unit
Bovis-Lend-Lease for the construction of the $300m Melbourne Wholesale
Fruit, Vegetable & Flower Market. Bovis Lend Lease commenced early works on
site in late 2009 and has now been signalled to commence construction. The
project has been estimated to create 600 jobs and inject $870m into the
Victorian economy. The new market is expected to be completed in 2012. LLC
rose 7 cents (0.81%) to $8.72.

Oz Minerals (OZL)

OZ posted an initial gold resource at its Okvau project in Cambodia of
650,000 ounces. Drilling carried out to date has identified an inferred
mineral resource of 8.1m metric tonnes of ore at grades of 2.3 grams per
tonne for 605,000 ounces of gold. OZL shed 2 cents (1.71%) to $1.15.

Macarthur Coal (MCC)

Macarthur said it has started agreeing prices for its pulverized, or PCI,
coal at near double prices. Its settlements so far have featured a shift
from annual pricing resets to quarterly and half yearly resets, continuing a
trend to more short-term pricing of coal contracts. Macarthur did not say
what price its contracts had been struck at, but said they were in line with
other miners’ settlements. MCC firmed 30 cents (2.5%) to $12.30.

Sigma Pharmaceuticals (SIP)

Sigma said it doesn’t expect to pay a final dividend and is renegotiating
the terms of its banking covenants amid a forecast fall in cash flow and
significant pressure on its balance sheet. Sigma said it is still in the
process of finalising its full year accounts for the year to January 31.
This is likely to result in a material reduction in the carrying amount of
goodwill. The full year is also likely to be affected by inventory
writedowns and redundancy costs. SIP is in a trading halt and was last
quoted at $0.90.

Murchison Metals (MMX)

Murchison Metals and joint venture partner Mitsubishi said they have
increased the planned initial capacity of their $4bn Oakajee iron ore port
development by 29% to 45m metric tonnes per year and identified three
potential foundational customers. CEO of the joint venture, Oakajee Port &
Rail (OPR), John Langoulant said the increase of planned initial capacity to
45m tonnes from the previous 35m tonnes followed strong interest from
regional iron ore miners. MMX strengthened 12 cents (4.63%) to $2.71.

BT Investment Management (BTT)

BT Investment Management said its agreement to manage $16.7bn in investments
for Westpac wealth management arm BT Financial Group has been extended to 31
March 2015, from 19 October, with no change to the fee rates payable or the
make-up of the funds it manages. In a key change to the deal, BTT has lost
its exclusive management rights over the funds, giving BT Financial the
right to appoint other investment managers where it is considered to be in
the best interests of its investors. BTT rose 5 cents (1.69%) to $3.01.

Economic News

Merchandise Imports

Australian merchandise imports rose 2% to $17.01bn in February from $16.67bn
in January in seasonally adjusted terms, the Australian Bureau of Statistics
said. The bureau said machinery and transport equipment accounted for the
largest proportion of imports in original terms and were valued at $5.9bn.
Monthly trade figures for March, which will include seasonally adjusted
import and export figures, will be issued on April 21.

Forecasts For Long Term Energy Sources

In a new report influenced by current developments in global energy
sourcing, Abare released a forecast for the long term outlook for energy for
the country. Primary energy consumption in Australia will increase by 35% by
fiscal 2029-30 or by an average 1.4% a year. Coal and oil will continue to
supply the bulk of the nation’s primary energy needs, although their share
in the energy mix is expected to decline. By 2030, coal should account for
23% of primary energy consumption, oil will hold unchanged at 36% while the
use of natural gas and coal seam gas is expected to grow strongly by an
average 3.4% a year to account for 33% of primary energy use by 2030.
Renewable energy is projected to have the strongest growth prospects. Wind
energy is projected to account for most of the increase in electricity
generation from renewable sources, representing 12% of electricity
generation in 2030.

The NZSX50 added 19.73 points (0.62%) to 3,220.69 while the Nikkei fell
102.95 points (0.95%) to 10,744.03 and the Hang Seng strengthened 34.29
points (0.16%) to be last quoted at 21,418.78.

Tuesday, December 22 – The Australian share market surged to a two-week high thanks to stronger offshore markets and a reduction in profit taking on US dollar carry trades that has restrained equities and commodities for the past few weeks.
The All Ordinaries rose 64.9 points (1.4%) to 4,724.4 while the S&P/ASX 200 firmed 69.1 points (1.5%) to 4,712.8.
BHP (BHP)
BHP said it has no plans to exit its nickel business, countering a media report that it could be considering selling mines in Australia and Colombia. “We have absolutely no plans to exit nickel,” a spokeswoman for BHP said. BHP strengthened 70 cents (1.71%) to $41.65.
Newcrest (NCM)
Cyclone Laurence has made landfall in Australia’s eastern Pilbara region morning, forcing the closure of Newcrest Telfer gold mine, while major iron ore export terminal Port Hedland has reopened. “At this stage, production is expected to resume during the day shift on Wednesday,” Newcrest said. NCM lost 72 cents (2.07%) to $34.15.
News Corp (NWS)
News Corporation announced it has agreed to subscribe to up to 49m new registered shares in Sky Deutschland AG via a capital increase that is expected to raise EUR110 – 120m. As a result, the company’s stake in Sky Deutschland will increase from its current position of 39.96% up to a maximum of 45.4%. The issue price of the new shares will be the greater of EUR2.25 or the volume-weighted average price on XETRA over the 5 trading days prior to the resolution of the capital increase less a discount of 3%. The capital increase is expected to occur in the course of January 2010. NWS rose 42 cents (2.4%) to $17.89.
Fortescue (FMG)
Fortescue said it has reached a settlement over a shipping dispute, agreeing to pay SK Shipping Europe US$20.34m in return for ending its legal proceedings against the miner. The company said it had agreed to pay SK Shipping US$10.17m for each of the two suspended ship charter contracts that are in dispute. As part of the settlement, Fortescue has restructured its future cargo obligations to SK Shipping and agreed freight rates at a base daily rate plus a hire incentive payment and profit share arrangement. Fortescue said it has now struck settlements with four counterparties with which it has had disputes and expects the total damages from all the disputes to be in line with previous guidance of about US$171m. FMG strengthened 4 cents (0.92%) to $4.37.
Foster’s Group (FGL)
Foster’s Group said Managing Director Alex Stevens, who oversees the Australian-Pacific beer business, has resigned due to ill health. Chief Executive Ian Johnston will act as managing director for the unit until further notice. FGL gained 10 cents (1.87%) to $5.46.
GPT Group (GPT)
GPT said its board has appointed former Australand Property Group Chief Executive Brendan Crotty as a director immediately, subject to investor ratification at their annual meeting next year. The company said Chairman Ken Moss won’t stand for re-election at the meeting and the board has named Deputy Chairman Robert Ferguson as his successor, subject to investors’ ratification as a director. GPT rose 1 cent (1.75%) to $0.58.
Asciano (AIO)
Asciano refuted suggestions by an Australian state finance minister that it entered into discussions earlier this year with QR, its main competitor in Queensland, to sell its coal haulage business. Asciano said that while it did have discussions with QR as part of its review of recapitalisation options before its $2.45bn capital raising in mid-2009, these were to discuss a potential joint venture in interstate intermodal rail. The firm said it was disappointed that the confidential discussions had been made public by the Queensland Treasurer Andrew Fraser, “in a way that has the potential to mislead or confuse.” AIO lost half a cent (0.29%) to $1.715.
Boral (BLD) and Crown (CWN)
Boral said that Chief Financial Officer Ken Barton has resigned from the company to take up a similar role at Crown. A formal process to identify and appoint a new chief financial officer is underway and Barton will remain in his role until early March to help with a smooth transition to a newly appointed officer, it said. BLD strengthened 14 cents (2.55%) to $5.64 while CWN lost 1 cent (0.13%) to $7.71.
Nufarm (NUF)
Sinochem has revised down its proposed takeover offer for Nufarm to $12 a share from $13, valuing it at $2.62bn, Nufarm said. Nufarm Chairman Kerry Hoggard said the company is disappointed that Sinochem hasn’t proceeded with the proposed purchase on the basis that was previously agreed. “The Nufarm Board has strong confidence in the future growth and success of the company and isn’t prepared to support a proposal that undervalues the business,” he said. NUF was placed in a trading halt with a last price of $10.56.
GrainCorp (GNC)
GrainCorp said it expects earnings before interest, tax, depreciation and amortisation this fiscal year ending 30 September 2010 in a range of $180m to $210m. The contribution from the newly-purchased malt unit to this earnings measure will be in a range $100m to $120m, the company reported. Managing Director Mark Irwin said drought in Queensland and New South Wales had cut receivals from a harvest of winter grains, but receivals from the harvest in Victoria are meeting budget expectations. GNC weakened 43 cents (7.4%) to $5.38.
The NZSX50 rose 29.38 points (0.93%) to 3,179.18 while the Nikkei added 144.17 points (1.42%) to be last quoted at 10,328.20 and the Hang Seng strengthened 243.38 points (1.16%) to 21,191.48.
The Australian dollar was last quoted at US$0.8789.

Monday, December 21 – The Australian share market finished a touch weaker in sleepy pre-Christmas trading after testing the upper end of its short-term range on the back of slightly positive leads from Wall Street.

The All Ordinaries fell 11.6 points (0.25%) to 4,660.3 while the S&P/ASX 200 weakened 12.8 points (0.28%) to 4,637.7.

BHP (BHP) Tropical Cyclone Laurence forced the closure of a major iron ore export port in the Pilbara region of Western Australia as BHP warned of possible interruptions to its mining operations in the region due to the storm. “We expect that there may be some production interruption at some operations due to heavy rainfall but otherwise we are mainly keeping watch on the cyclone’s path at this stage,” a BHP spokeswoman said. BHP gained 35 cents (0.86%) to $40.95.

Qantas (QAN)

Qantas said for the first time that it expects to return to profitability this reporting period after on-year improvements in passenger numbers and average ticket prices. Qantas said it expects profit before tax of between $50m and $150m for the six months ended 31 December. QAN rose 14 cents (5.11%) to $2.88.

Asciano (AIO)

Asciano said it has completed a major $2.9bn debt repayment and entered into three new facilities totalling another $1.14bn, and confirmed it would not pay an interim distribution this fiscal year. The new facilities include an undrawn $500m revolving credit facility and $140m working capital facility that both mature in December 2013, and a $500m term loan maturing in December 2014. AIO fell 5 cents (2.83%) to $1.72.

Lend Lease (LLC)

Lend Lease said it will pay the New South Wales state government “several hundred” million Australian dollars for the right to develop the $6bn Barangaroo project on Sydney’s waterfront. Under a conditional contract, Lend Lease said it will make a series of payments totalling several hundred million dollars over eight years, including about $100m in the first 18 months. Lend Lease said construction on the 7.5 hectare site is expected to begin in late 2010 and the project will take 10-15 years to complete.

In other news, Lend Lease said that the company has closed its new wholesale fund, Lend Lease Real Estate Partners 3, after receiving $218m in commitments from investors. The fund will have capacity to invest more than $350m, with targeted gearing of between 30% and 50%, Lend Lease said. It also is expected to participate in the Lend Lease-led consortium as the preferred bidder for the $1.4bn ING Retail Property Fund, the company said. LLC rose 12 cents (1.29%) to $9.42.

Alumina (AWC)

Alumina said it will contribute about US$120m toward the development of a US$10.8bn aluminium project in Saudi Arabia. The deal will see Alcoa and Alumina provide alumina for the first stage of the project, due to come on line in 2013, with a bauxite mine and alumina refinery to be developed in the second phase. Alumina said it will consider a variety of debt funding options for its equity contribution, which will be contributed progressively between 2010 and 2014. AWC strengthened 1.5 cents (0.88%) to $1.715.

Arrow (AOE)

Arrow said that it has acquired a 35% stake in a Chinese coal seam gas block from Fortune Oil for US$13.3m and has an option to increase its holding to 75%. Arrow said the acquisition price includes US$6m of funds for a 2010 work program including the drilling of horizontal pilot wells. The block has proven, probable and possible reserves of 89 petajoules, Arrow said. AOE remained unchanged at $3.95.

UGL (UGL)

UGL said it has been awarded a contract worth $225m to build and maintain a communications network for the New South Wales state rail network. UGL said the project with RailCorp included the design, supply, installation and maintenance of a digital train radio system to cover 1,455km of rail track and 70km of tunnels across the Sydney metropolitan network, including the fit out of 675 train cabs with new radio equipment. UGL fell 7 cents (0.49%) to $14.16.

Economic News

APRA

The Australian Prudential Regulation Authority (APRA) issued proposed changes to prudential standards of banks to enhance the Basel II framework in Australia. APRA Chairman John Lake said the proposed changes aren’t expected to have a significant impact. Among the proposed changes to prudential standards, APRA wants higher capital requirements to capture the credit risk of complex trading activities. It also called for higher risk weights for so-called resecuritisation exposures to better reflect risk inherent in the products. The proposals also include increased credit conversion factors for short-term liquidity facilities provided to off-balance sheet conduits. The consultation package is a response to measures released in July 2009 by the Basel Committee on Banking Supervision to enhance the framework, APRA said.

The NZSX50 dropped 4.42 points (0.14%) to 3,149.81 while the Nikkei rose 41.42 points (0.41%) to be last quoted at 10,183.47 and the Hang Seng shed 135.69 points (0.64%) to 21,040.19.

The Australian dollar was last quoted at US$0.8843.