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Market Update

Fall in Chinese Trade Trim Australian Market Gains

Author: Marcus Jacob
Last Update: 9:29 AM ET July 10 2013

5:30 PM Sydney – Stocks in Sydney opened higher and began trimming gain in the afternoon after China reported first decline in trade activities in eighteen months. Pepper Australia launched a competing bid for its mortgage lender rival RHG.

Stocks in Sydney trading opened higher but market indexes pared gains after China reported a decline in exports and imports activities in June, the first decrease since January 2012.

The ASX 200 index gained 19.70 or 0.4% to close at 4,901.40 and the broader All Ordinaries rose 18.90 to 4,885.40.

Australian dollar traded higher at 91.81 U.S. cents and in stock trading turnover edged up to 763 million shares worth $4.2 billion.

China’s customs agency said exports in June declined 3.1% from a year ago and imports declined 0.7% in the period.

The decline in trade activities was unexpected but the accuracy of the data is hotly debated by economists. Chinese manufacturers are known to do invoicing padding that may distort month-to-month data.

A private measure of Australian consumer confidence was flat according to an index reported by Westpac and Melbourne Institute. The consumer sentiment index fell slightly to 102.21 in July from 102.2 in June.

In general, the survey participants were more confident about the economic outlook but were nervous about personal finances.

Stocks in Review

Rio Tinto added 35 cents to $52.39 and BHP rose 22 cents to $31.83. Woodside Petroleum Limited increased 16 cents to $36.75.

David Jones Limited fell 5 cents to $2.49 and Breville Group gained 9 cents to $7.39.
Woolworths lowered 3 cents to $33.20.

Mirvac Group added 5 cents to $1.70. Lend Lease up 3 cents to $8.86.

Westpac increased 9 cents to $29.04 and launched $750 million capital notes placement and priced tier-2 capital securities at $100 a share. The note priced at the sum of the 90 day Bank Bill Rate and a margin per annum is expected between 2.35% and 2.45%. It will mature on August 22, 2023 and may be redeemed as early as August 2018.

Commonwealth jumped 0.3% to $70.35 and National Australia Bank edged up 0.1% to $29.45. ANZ slid 2 cents to $28.64.

Transurban Group closed unchanged at $6.80 and the toll roads operator expects toll revenue to increase in the full-year and traffic on its U.S. toll roads surged and strong traffic growth across all of its businesses.

The company said toll revenue in the second quarter on daily average surged 65% to $45,270 from the first quarter.

Pepper Australia launched a competing bid for RHG Limited that valued the mortgage lending company at 46 cents a share, 1.9 cents higher than the bid from Resimac and recommended by the board. RHG stock jumped 5% to 49 cent as investors expect higher bids.

Virgin Australia Holdings Limited gained 1.1% to 45.5 cents and the competition regulator ACCC permitted to continue its trans-Tasman alliance with Air New Zealand Limited, and plans to grant a 3-year conditional approval.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc