Housing finance falls 1.6% in November, Chinese company eyes CSR’s sugar business: Economy Roundup

The total value of dwelling finance commitments excluding alterations and additions decreased by a seasonally adjusted 1.6% to $22 billion in November, according to the latest figures from the Australian Bureau of Statistics.

The figures show that the number of commitments for owner occupied housing finance fell 5.6% to 59,916, with their value moving down 2.9% to $16 billion. Additionally, the value of investment housing loans increased by 2.1% to $6 billion.

The number of new dwelling construction commitments fell by 6.5% to 7,485, with commitments for the purchase of new dwelling also falling 5.1% to 2,456. The number of commitments for the purchase of established dwellings decreased by 5.4% to 49,574.

Meanwhile, Chinese food company Bright Food has said it is now in talks with CSR negotiating a deal to buy the company’s sugar and renewable energy business.

CSR shares rose over 5% after the talks were announced. In a statement, CSR said it would continue with the demerger of its business and said the release was just “merely an expression of interest”.

“Bright Food Group had previously expressed to CSR an interest in the sugar business however its expression of interest similarly lacked certainty as to value, timing and likelihood of completion,” CSR said in a statement to the ASX.

“As previously advised to the market, CSR continues to progress the proposed demerger of its sugar and renewable energy business and will consider a range of options as part of this proposal… The CSR Board will of course consider any proposal and keep the market informed.”

Shares fall after weak Wall Street leads

The Australian sharemarket has opened lower today following poor leads in the US, where stocks were subdued to a disappointing result from mining giant Alcoa.

The benchmark S&P/ASX200 was down 28 points or 0.57% to 4922.2 at 12.10 AEST, while the Australian dollar also dropped slightly to US93c.

NAB shares fell 0.6% to $27.09, with Commonwealth Bank shares rising 0.7% to $59.86. ANZ shares rose 0.1% to $22.41, with Westpac shares gaining 0.2% to $25.22.

As reported in The Age, Qantas Airways executives have now joined a delegation from the Oneworld airline alliance in an attempt to keep Japan Airlines controlled by allies.

Qantas commercial chief Rob Gurney, along with other executives from the alliance led by American Airlines, are set to appear at a press conference in Japan in order to promise financial support for the company.

Meanwhile, investors have lost about $3.5 billion in toll road projects with large write-downs and collapses occurring in the industry, the Australian Financial Review has reported.

Additionally, the report also claimed further write-downs are expected with the Brisbane RiverCity Motorway opens later this year, with Sydney’s Lane Cove Tunnel also expected to see losses of about $1 billion.

Alcoa announces $US1.19 billion loss

Overseas, Wall Street stocks fell after mining giant Alcoa posted a fourth-quarter loss due to higher aluminium prices, with the company’s shares falling 6%.

The company said the net loss was about $US277 million, compared to its loss of $US1.19 billion in the fourth quarter of 2008. Revenue fell from $US5.68 billion to $US5.43 billion, but had improved since the third quarter.

“This was a tough year for the aluminium industry – a price crash, demand destruction and credit crunch,” president and chief executive Klaus Kleinfeld said in a statement.

“We reshaped our cost structure and portfolio for profitable growth. And, we built the cash reserves to weather current economic uncertainties and invest in opportunities for future.”

Also in the US, the White House and New York attorney-general Andrew Cuomo have attacked Wall Street bonuses, with Bank of America, Bank of New York, Citigroup, Goldman Sachs and JPMorgan preparing to deliver their yearly bonus payments.

A senior US official told Reuters president Obama is considering placing a fee on financial services firms as part of the 2011-12 budget he is preparing to unveil next month.

The Dow Jones Industrial Average managed to reach a 15-month high despite the troubles from Alcoa, gaining 45.8 points or 0.43% to 10,663.99.