Australian Markets

The collapse of the planned merger of Rio Tinto (RIO) and Chinalco worth up to $19.5 billion on June 5 2009, has been accepted by the Chinese government as a failure that was beyond their control. The report to the State Council exonerates the resources company and the Australian government and accepts that ordinary economic forces halted the largest Chinese foreign investment deal.

Oroton (ORL), an upmarket Australian fashion house, has found that even during the global financial crisis, women were still in the market for pricey upmarket handbags and accessories. Sally Macdonald, the Oroton Chief Executive joined Oroton Group in September 2006 when the company reported a $9.4 million loss a result of high costs, underperforming brands and a string of dud acquisition deals under the leadership of controlling shareholders the Lane family.

Myer (MYR) has warned that sales for Australia's largest department store chain maybe flat as consumers no longer have the free government bonus handout cash to spend. The company had beaten forecasts and reported a 38 percent rise in their first half underlying profit due mainly to cost cutting and through selling higher margin private label products.

Orica (ORI), the fertiliser and explosives company have lost a court dispute over a large capital gains tax bill from the sale of its pharmaceuticals business over a decade ago in 1998. The company may be forced to pay the $126 million tax bill, but the company has the opportunity to appeal against the decision of Federal Court judge Ross Sundberg. Assuming the decision stands, then in the year that Orica pays the balance of the tax bill its reported net profit will be down $192 million.

Qantas yields are turning around its decline - with the average air fare price bottoming out last year. However, the Airline's monthly traffic figures show domestic yields for the first seven months of the current financial year are 6 percent less than the rquivalent period last year for Qantas and subsidiary - Jetstar. International yields for the airline group are 20 percent lower compared to last year.

Qantas (QAN) currently has troubles in two areas via two partially owned companies: Jetset Travelworld (JET) and Air Pacific. Qantas owns 46 percent of Air Pacific while they own 58 percent of JET after a merger of Qantas Holidays and Qantas Business Travel with Jetset which created Australia's largest listed travel agency franchise.

Arrow Energy (AOE) shares jumped $1.63 (47%), closing yesterday's trade at $5.11. The share price jump can be attributed to the joint bid by Royal Dutch Shell and PetroChina for AOE in a deal worth at least $3.3 billion as the companies seek to expand their presence in the coal seam gas sector. The conditional bid would give shareholders $4.45 cash per share plus a share in a newentity comprised of Arrow's international business.

Australian Gold production is set to reach $10 billion in 2010 as output is increased at a time of historically high gold prices. In 2009, Australia produced 227 tonnes (or 7.3 million ounces) of Gold (increase of 3 percent on 2008). At current gold prices of $1250 for an ounce of Gold, the Australian gold output of 2009 would have fetched $9 billion. With the high gold prices, this precious metal is set to be Australia's third biggest export earner after iron ore and coking coal.

Japanese life insurance group, Dai-Ichi Mutual Life Insurance received approval from the Australian Prudential Regulation Authority (APRA) to increase is ownership of Tower Australia (TAL) from its existing 29.7 percent to 49.9 percent without having to seek approval from the Foreign Investment Review Board. Their current stake was bought in August 2008 when Tower was at $3.75 per share, yesterday's close was at $2.52 per share.

Spot prices for cocking coal have increased to $220 a tonne. Coking coal is a raw material for steel making. The jump in spot prices has opened up a US$13billion annual revenue gap as contract prices were set almost a year ago.