Australian Markets

Commonwealth Bank of Australia (CBA) has announced that it will earn $2 billion profit in the first half of 2009. The company said that it would outperform market expectations by as much as 20 per cent with interim cash profit as large as $2 billion. The ASX requires listed companies to make public any information which substantially differs from consensus earnings estimates. CBA's announcement comes ahead of its interim results which are scheduled for February 11th.

Newcrest Mining (NCM) has announced in the second quarter report that there was fall in the output and raise in the cost. The company’s output fell by 16.2 per cent to 382,584 ounces during the 4Q of 2008 after a drop in production from Gosowong in Indonesia and Cadia Hill in NSW. The miner is planning to expand its existing mines including Gosowong, where $179 million is being spent to lift annual output to 450,000 ounces, and the Hidden Valley mine in Papua New Guinea.

Many ASX listed companies had a boost in the stock market yesterday. Trading was thin ahead of a U.S. market holiday on Monday, and largely followed Wall Street's lead from last Friday. It was the miners that contributed most to the market's rise. This was particularly true for the gold stocks, which were helped by a more than 4% bounce in the price of the precious metal. Newcrest mining (NCM) that was the real standout performer, with shares shooting almost 9% higher.

Rio Tinto (RIO), a multinational mining and resources group and Peabody, the largest private-sector coal company in the world has announced that they are going to cut the production of coal as a result of the fall in demand. Peabody has revealed that it will cut the cooking coal production in Australia by 20% and Rio Tinto has said it would cut its output by 6% and workforce by 50%.

PanAust (PNA), an ASX listed cooper and gold mining company, has refinanced its debt worth $US 80 million with Goldman Sachs JBWere which is due next month. Even though the refinancing extension was expensive, the move increased the share price by 9 cents to 17.5 cents per share. PNA has issued the lender options worth of $75 million and would be forced to issue another $75 million if it fails to repay the debt within 31st of July.

As a result of the economic slowdown, many companies in the recent past have announced capital raising programs. About 28 companies in the first half of 2008 and 49 companies since June have increased their capital and majority of them managed to stabilise their balance sheets. This was not the case in the recent years as balance sheet stabilisation was not a big portion of companies.

BHP Billiton (BHP), a leading producer of manganese ore has decided to cutback manganese production at the Samancor operations in South Africa and Australia where it owns more than 60% of share. The global market condition and reduction in the demand of steel is said to be the cause of this production cut.

Markets reaction to announcement from Futuris Corporation was sharp and devastating after it announced that its full year profit would be lower by nearly 20 percent. It also flagged it's non-performing and non-core assets on sale. The scrip remained battered throughout the day to close down at 36.5 cents or 27 percent at 97 cents which was lowest since August 2005. The shares have fallen nearly 55 percent this year.

Australia's biggest electricity producer gained considerably at the Sydney stock exchange after it announced its refinancing achievements. Babcock and Brown today announced that it has managed to refinance it’s a$ 2.7 billion debt which led to increased investor confidence which made the share prices advance 16 percent or 12 cents to 85 cents. It has been its highest gain since June 12.

Businesses are looking bleak. Small and medium enterprises are the worst hit with the ongoing credit crisis around the world. According to the industry survey rising fuel prices, drop in consumer spending, rising inflation and the on-going world wide credit crisis has market a dent in sale and profits figures of the company.