Services sector activity picks up pace, New stock exchange in operation by October: Midday Roundup

The services sector picked up the pace in February as retailers started recovering and new orders increased, according to the latest Australian Industry Group-Commonwealth Bank performance of services index.

The index rose by 3.2 points to 48.7 in February, below the 50-point level separating expansion from contraction but representing a modest gain from January.

The index measuring sales grew by 8.5 points to 53.9, in the highest reading in four months, while the index of new orders rose 7.7 points to 47.4.

AIG chief executive Heather Ridout said in a statement the results are encouraging.

“The pick-up in retail activity is welcome and hopefully will get further support in the months ahead from strong employment and wages growth,” she said.

“Business conditions in Queensland are expected to be adversely affected for several months before picking up pace on the back of heightened rebuilding activity and as more businesses resume normal operations.”

The measure of input prices fell to 67.9, while the index of wages grew by 0.8 points to 57.1.

New stock exchange operational by October

As reported by the Australian Financial Review, the corporate regulator is expected to announce today the Chi-X market will be operational by October.

The publication reports that Chi-X will be able to operate within months, and that it has suggested a 12 month period before brokers are forced to connect to more than one exchange.

“Chi-X supports the proposed best execution framework and in particular the interim proposals that would limit the best execution obligation to allow firms to trade solely on the ASX markets for a transitional period,” the firm reportedly said.

Trade balances higher than expected

The trade balance on goods and surpluses was a surplus of $1.8 billion in January, representing a fall of $143 million but still higher than expected, the Australian Bureau of Statistics announced this morning.

Goods and services credits dropped by 4% to $23.6 billion, with non-rural goods falling 8%, rural goods falling 2% and non-monetary gold rising 38%

Goods and services debits fell by 4% to $21.7 billion, while intermediate and other merchandise goods fell 11%, non-monetary gold fell 26% and consumption goods dropped 1%.

Shares flat despite solid Wall Street gains

The Australian sharemarket has opened flat this morning despite all three Wall Street indices reporting gains overnight.

The benchmark S&P/ASX200 index was down 4.1 points or 0.09% to 4799.1 at 12.10 AEST, while the Australian dollar also lost ground to $US1.

AMP shares rose 0.75% to $5.34, while ANZ shares lost 1.01% to $23.62. Commonwealth Bank lost 0.86% to $52.12 as NAB fell 0.94% to $25.31.

Downer EDI partly completes capital raising

Downer EDI has completed the institutional component of a capital raising, the company announced this morning.

The company said it has raised $200 million at $3.25 per share. The next portion of the sale will be the retail component, which opens next week.

“This capital raising will strengthen Downer’s balance sheet and provide the financial flexibility to pursue attractive growth opportunities,” chief executive Grant Fenn said in a statement.

Wall Street rises on jobs data

Wall Street indices reported positive movement overnight as the ADP Employer Services report found that employers added 217,000 jobs in February – well above expectations.

The Dow Jones Industrial Average rose 8.78 points to 12,066.80.