Slumping business confidence in Germany and an overnight iron ore price fall saw the Australian share market open marginally lower this morning. The market traded within a 15 point range for most of the day before edging down further this afternoon and closing 0.29 per cent down.
Today, the S&P/ASX 200 index closed 13 points down to finish at 4,373. On the futures market, the SPI is currently 13 points down.
Although the global banking system is facing major challenges from the euro crisis Australian banks remain strong, the Reserve Bank of Australia (RBA) said in todays Financial Stability Review. The RBA said; "The Australian banking system remains well placed to cope with shocks from abroad," due to strengthened capital, funding and liquidity positions in the wake of the 2008 global financial crisis. In the last six months, Australian banks raised $50 billion of mostly unsecured debts on money markets. The big four’s banks total exposure to Europe was 0.6 per cent of assets, with all four continuing to obtain a larger share of their funds from domestic deposits.
Tasmanian timber company Gunns Limited (ASX:GNS) has indicated that the failure to retain proceeds from asset sales has played a key role in its dramatic downfall. The woodchipper says that lenders, including ANZ bank, will not permit them to retain further funds from asset sales which had previously been allowed to keep it afloat. The company now finds itself chopped down to voluntary administration on the back of long term declines in woodchip exports as well as poor investor support for a $2.3 billion pulp mill project. Gunns has been in a trading halt since March 9th, and last traded at $0.16.
Leighton Holdings Limited’s (ASX:LEI) has put a price tag of between $500 and $800 million on its high margin telecommunications assets, including Next Gen, in an effort to reduce debt and ensure shareholder dividends. Other speculated asset sales include portions of Leighton’s stakes in companies such as Devine, Sedgman and Macmahon Holdings. Earlier today the international contractor announced wholly owned subsidiary Leighton Contractors Pty Ltd has been awarded a $US1.5 billion mine management contract by Fortescue Metals Group Limited (ASX:FMG). Shares in Leighton Holdings closed 0.3 per cent up at $16.53.
Newcrest Mining Limited (ASX:NCM) is raising $US1 billion after a successful offering in US bond markets. The gold miner intends to allocate the proceeds toward repaying existing unsecured indebtedness.
Suncorp Group Limited (ASX:SUN) launched a $350 million capital raising with an offer of convertible preference shares. The insurer plans to deploy the funds to general funding and capital management purposes.
Amcom Telecommunications Limited (ASX:AMM) believes it is on track to achieve comparable underlying earnings growth this financial year as it did in 2012.
The telecommunications company believes growth will be driven by product base broadening and the addition of annuity based IT services.
Virgin Australia Holdings Limited (ASX:VAH) has explained its concerns to Australia’s competition regulator over a potential arrangement between Qantas Airways Limited (ASX:QAN) and Middle Eastern airline Emirates. Virgin believes the Qantas-Emirates alliance would result in unfair domination of market share.
Best and worst performers
The best performing sector was Telco Services adding 7 points to close at 1,331. Materials meanwhile was the worst performing sector, losing 98 points to close at 9,889.
The best performing stock in the S&PASX 200 was Intrepid Mines Limited (ASX:IAU), rising 6.59 per cent to close at $00.48. Shares in Bathurst Resources Limited (ASX:BTU) and BlueScope Steel Limited (ASX:BSL) also closed higher.
The worst performing stock was Gindalbie Metals Limited (ASX:GBG), dropping 10.45 per cent to close at $0.30. Shares in Lynas Corporation Limited (ASX:LYC) and Arrium Limited (ASX:ARI) also finished lower at market close.
Gold is trading at $US1,765 an ounce. Light crude is $0.18 up at $US92.11 a barrel.
The Australian Dollar
The Australian dollar is buying $US1.042.