NAB in trading halt ahead of AXA announcement, Shares move higher: Economy Roundup

National Australia Bank shares have been placed in a trading halt ahead of an announcement regarding the company’s proposed $13 billion acquisition of AXA Asia Pacific Holdings.

The company has said in an announcement it requested a halt until an announcement is made, or trading commences on March 31. AXA APH shares have also been placed into a trading halt.

“NAB requests the trading halt in relation to an imminent announcement to the market regarding the status of contractual negotiations to acquire the Australian and New Zealand businesses of AXA Asia Pacific,” the lender said in a statement on Tuesday.

Earlier this month AXA extended the deadline on a terms agreement to March 20. Both NAB and AMP have been after AXA over the past few months.

However, any decision will still require approval from the Australian Competition and Consumer Commission – and it has raised objections to the proposal. The ACCC is set to rule on AMP’s offer by April 1, and on NAB’s by April 22.

Iron ore giant BHP Billiton has signed a number of agreements with Asian customers that will see contracts moved to shorter-term limits rather than on an annual pricing basis.

“The structural change that these settlements represent is consistent with BHP Billiton achieving market clearing prices,” the company said. No further details have been announced.

The news comes as Brazilian mining giant Vale has approved a quarterly iron ore price deal with Asian companies, which will see prices rise by 90%.

Australian chief executives are confident of surviving the next 12 months unhurt, but the latest Business Spectator Accenture CEO Pulse survey shows executives are wary of new Fair Work laws and their ability to fill vacancies.

An increase was recorded in the number of CEOs expecting rises in sales and profits, up 12% to 71%, and 16% to 73% respectively. But executives are worried about sourcing skilled staff, with 52% saying this issue would keep them “awake at night”.

About 45% of executives expect to see rises in employment levels, with more than one third also saying they expect to see technology innovation drive productivity in their industry.

Latest figures from the Australian Bureau of Statistics show there were 9.1 million active internet subscribers in the country by the end of December 2009.

The statistics show nearly 90% of internet connections are now non dial-up, with 62% of connections recording download speeds of 1.5Mbps or higher. DSL is the major technology for connections, accounting for 51% of non dial-up connections.

Mobile wireless connections is the fastest growing type of connection, increasing to 2.8 million by last December – a 40% increase from the previous June.

Shares higher following strong Wall Street lead

The Australian sharemarket has opened higher today following good results from overseas and strong leads from commodities markets.

The benchmark S&P/ASX200 index was up 12 points or 0.25% to 4909.7 at 12.05 AEST, while the Australian dollar has also risen higher following strong overseas markets, to US91c.

Westpac shares have lost 0.2% to $27.99, while Commonwealth Bank shares have lost 0.5% to $56.75. ANZ shares have fallen 0.6% to $25.29, as AMP gained 1% to $6.37.

A new BankWest report shows Australians are set to inherit about $407 billion in property assets over the next 15 years due to an aging population, rising home prices and high ownership rates.

”One in 10 homes owned by households will potentially be given away by 2025, which represents an unprecedented baton change in intergenerational wealth, the likes of which we have never seen before,” Bankwest retail chief executive Vittoria Shortt said in a statement.

Meanwhile, Reserve Bank of Australia assistant governor Guy Debelle has said the RBA takes higher mortgage rates into account when setting monetary policy, but also said home loan rates have not risen as much as funding costs for banks.

“Interestingly, while the standard variable rate has been increased, there is little sign of any reduction in the discounts offered on new loans,” Debelle said in a speech “While interest rates on mortgages have increased relative to the cash rate, the Reserve Bank is able to take account of those changes in its policy deliberations.”

“The cash rate determined by the Reserve Bank is still the major determinant of the interest rate structure in Australia, including that of mortgage rates.”

His comments come after RBA governor Glenn Stevens took the unusual step of appearing in a television interview in order to discuss monetary policy and the risk of first home owners borrowing beyond their means.

Lend Lease completes rights offer

Property developer Lend Lease has sold shares at $8.60 in order to cover a $806 million rights offer. The company said yesterday the retail portion of a rights offering at $7.70 per share was only 46% covered for, with the remaining balance to be sold through a book build.

“The Shortfall Bookbuild priced at $8.60 per new security, represents a small discount of 1.4% to the last traded price of $8.72 of Lend Lease securities and a premium of 90 cents or 11.7% to the Entitlement Offer price of $7.70 per new security,” it said in a statement.

“This premium will be returned to renounced eligible institutional and retail security holders and to ineligible security holders on or about Friday April 9, 2010, as described in the Retail Entitlement Offer Booklet dated Wednesday March 3, 2010.”

Agricultural chemicals group Nufarm has recorded a net loss of $40 million during the first half of the 2009-10 financial year, but expects a profit of $80-100 million for the full year.

“The company is forecasting a headline result for the full year, including the impact of material items of between $80 million and $100 million and an operating result of between $110 million and $130 million,” Nufarm said in a statement to the Australian Securities Exchange.

“These forecasts assume at least average climatic conditions and subsequent demand in the key selling regions and a gradual improvement in glyphosate margins through the balance of the financial year.

In the US, stocks rose due to good performances in mining and energy companies, caused by the weakness in the dollar. The Dow Jones Industrial Average gained 45.50 points, or 0.42%, to 10,895.86.