Market Watch - Australian Shares

10 Oct 2012

Share prices continued to benefit from the general improvement in risk appetite globally. A series of more encouraging economic data releases in China augured well for an improvement in global economic activity.

A wide range of Australian companies held Annual General Meetings during the month, while two of the major banks – ANZ Banking Group and National Australia Bank – released their earnings for the full year ending 30 September 2012.

A number of mining and energy companies announced quarterly production reports. There were few surprises in the production reports themselves, but revenues for several mining companies were impacted by lower commodity prices.

There was a fair amount of corporate activity during the month. Steel maker Arrium and grain handling company Graincorp both received takeover bids, for example, while Woolworths announced a plan to spin off some of its property assets to form SCA Group. This new property trust is expected to list on the ASX in December.

In the airline sector Virgin Australia Holdings announced that Singapore Airlines had acquired a 10% stake in the company, while Qantas Airways announced plans to expand its freight network. Qantas is effectively swapping its 50% stake in ground transport company StarTrack for the 50% stake in air freight business Australian Air Express which it does not already own. Both entitles are currently jointly owned by Australia Post.