Australian shares rise despite more falls on Wall Street: Economy Roundup

The Australian sharemarket has managed to open higher today despite another 1% drop on Wall Street due to renewed fears of debt problems in Europe.

The benchmark S&P/ASX200 index was up 47 points or 1.09% to 4371 at 12.20 AEST, while the Australian dollar continued its fall to US81c.

AMP shares rose 2% to $5.62, while ANZ shares gained 1% to $22.25. Commonwealth Bank shares gained 1.5% to $50.81, as Westpac rose 1.7% to $22.56.

In the mining sector, Newcrest has announced it has completed due diligence on gold mining giant Lihir Gold regarding its $9.5 billion takeover offer, and will now enter an exclusivity period.

“As a result, the scheme meeting is likely to be held in August, with completion of the merger in September 2010, subject to Lihir shareholders approving the transaction,” Newcrest said.

Meanwhile, treasurer Wayne Swan has told ABC television that some miners could pay up to 58% tax on the upcoming resources super profits tax.

“Well, there would be some super profitable companies that could reach that level,” Swan said in response to a question regarding taxes of up to 58%.

In the telecommunications sector, Telstra has told the Australian Financial Review it will move to secure its future in the wholesale business if it manages to create a good deal with the Federal Government.

“There’s still a lot of work to be done in terms of the opportunities, but broadly that’s where the opportunities will be,” Telstra Wholesale managing director Paul Geason said.

This network would eventually be shut down, if Telstra strikes a deal to transfer its customers over to the National Broadband Network.

Goldman Sachs subpoenaed by financial crisis commission

Overseas, Goldman Sachs Group has been subpoenaed by the Financial Crisis Inquiry Commission in order to provide documents and conduct interviews regarding the probe into how the global financial crisis began.

The banking firm has produced over five terabytes worth of records, containing millions of records and documents.

While the FCIC wasn’t impressed with the response, a company spokesperson said in a statement that “we have been and continue to be committed to providing the FCIC with the information they have requested”.

The US Securities and Exchange Commission sued Goldman in April for civil fraud regarding the design of its collateralised debt obligation business.

In the Gulf of Mexico, the leader of the Government’s relief effort of the giant BP oil spill has told Reuters the company hopes to collect about 20,000 barrels per day as it works to stop the leak.

The ongoing crisis, which is the greatest natural disaster in the country’s history, is a massive strain on the Government. President Barack Obama cancelled his trip to Australia due to his involvement in the management of the crisis.

On Wall Street, stocks fell once again as investors grew nervous regarding BP and debt problems in Europe. The Dow Jones Industrial Average lost 115.48 points or 1.16% to 9,816.49.

Bilfinger launches prospectus

German construction group Bilfinger has lodged the prospectus for its upcoming public offering, and expects to raise up to $1.4 billion as a result of the float in July.

The company started marketing the offer this morning, with an indicative price range of $2.20-$2.50 per share, with 555 million shares on offer. The retail offering begins on July 16, followed by a book-build from July 6-7.

The IPO is valuing the business at between 10.5-12 times forward earnings, which is lower than earlier expectations set out.

The company has reportedly said it is not deterred by the recent performance of some Australian floats including Merlyn and Miclyn Express Offshore. Additionally, managing director Mark Elliott said in a statement the new company will trade as “Conneq”.

“The name Conneq represents the connection we provide between industries and communities and vital infrastructure,” he said.

Meanwhile, a member of the Reserve Bank of Australia board has reportedly said there is still uncertainty in the global economy.

In a speech to a stockbrokers’ conference, Jillian Broadband said that even though Australia has managed to achieve a V-shaped recovery, there are still a number of critical factors affecting global performance.

US hospital operator Tenet has pulled out of discussions regarding the purchase of Healthscope, citing the premature disclosure of its early interest and the inability to complete work necessary to convince shareholders of the value of the deal.

“Tenet has concluded that in order to eliminate a prolonged period of uncertainty and market speculation surrounding this possible transaction, it is best to withdraw from this process,” it said.

Healthscope said in a statement that its directors continue to recommend shareholders take no action on two other takeover bids, and said due diligence may, or may not, result in an offer.

“If it does not, the board believes that Healthscope has a very attractive independent future and that the company is well positioned to continue to deliver strong growth,” the company said.