Australian Stock Market Report – Midday 5/5/14
By Tom Piotrowski, CommSec Market Analyst | May 5, 2014 1:44 PM EST
Mid Session report 12:30 AEST
The ASX 200 has given up its early gains on Monday to be trading almost by 0.2% lower as investors focus on banking stocks.
Westpac (WBC) shares have fallen more than 1% after having initially risen by 0.8%. The bank reported first-half cash earnings rising by 8 per cent to $3.77 billion in the face of tighter margins. The result was 3 per cent above consensus expectations although the response similar to the better than expected ANZ result last week. WBC followed ANZ´s lead last week in posting a decline in margins due to competition for home loan customers. The market had anticipated that Westpac would increase its net interest margin, which reflects the difference between its cost of borrowing and the rates at which it lends to customers. This measure however fell eight basis points to 2.1 per cent. WBC lifted its fully-franked interim dividend to 90 cents, from 86 cents previously.
As perceived earlier by the country's central bank, Australia's economic pace has been slowing down, which was confirmed Wednesday by the latest Westpac-Melbourne Institute Leading Index.
Elsewhere in the banking sector, Bendigo and Adelaide Bank (BEN) announced it will purchase the Victorian government´s agribusiness lender Rural Finance Corporation for $1.78 billion. The purchase will be partly funded with a $230 million institutional capital rising, which is expected to be completed by mid-July. BEN will acquire Rural Finance´s $1.695 billion loan book, along with its 11 offices across Victoria.
China´s Baosteel Group and Aurizon (AUR) have announced their intention to make a joint offer worth $3.40 a share for the shares in Aquila that they don´t currently own. Baosteel is one of China´s largest steelmakers and already owns 20% in Perth-based Aquila. AUR, whose operations are mostly in Queensland, is Australia´s largest hauler of coal. AQA shares were at $3.37 a rise of 37 per cent
According to the ABS, the number of Australian home building permits fell 3.5% in March. This was the fifth monthly fall in the past half year adding to concerns about the contribution housing construction will make to the economic recovery. Building approvals have risen by 20.0% in March compared to a year earlier. Permits to build houses fell 0.7% from a month earlier.
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily
Most Popular Slideshows
- Real Life ‘Frozen’: Snow Overwhelms The US, Kills 7; More To Come (Pictures)
- Angelina Jolie, Brad Pitt in Sydney for ‘Unbroken’ Red Carpet Premiere [PHOTOS]
- ‘The Walking Dead’ Season 5, Episode 8 Spoilers: Daryl Dixon Is Set To Burn The Place Down in ‘Coda’
- G20 Summit Awkward Moments: Putin Yawns, Mystery Bubbles Appear, F18 Drama Ensues
Join the Conversation
- Walmart Early Price Matching Special Event On Nov. 21, 2014 Matches Its Competitors' Black Friday 2014 Prices And Includes Exclusive Deals For Samsung LED HDTVs And iPad Air 2 [WATCH VIDEO]
- US Plane Flying Over Russian Skies Spotted; Vladimir Putin Ready For 'Practical Cooperation' With US
- Alleged 'Microsoft Lumia 1030' Front Panel Leaked With Capacitive Buttons; 'Xbox One' Owners To Get Free Goodies On Anniversary
- Nexus 6 Release Date And Price Under AT&T, T-Mobile And Sprint Listed
- Cold War 2: Russia, China And North Korea’s Blacklisted Company Fortify Alliance -- Reports
- Xiaomi to Kill Redmi 1S for More Redmi Notes
- New Zealand Dairy Industry Feels Bullish At Chinese President's Visit