Housing finance up 1% in August, Shares at five-month high: Economy Roundup

The value of housing finance commitments for owner occupiers increased by a seasonally adjusted 1% during August, according to the latest figures from the Australian Bureau of Statistics.

The figures also show the total value of those commitments fell by 1.3% to $20.15 billion. The figures come after a Reuters poll estimated commitments would rise by 1.5% during the month.

The value of owner-occupied housing commitments remained flat at $13.6 billion, while the value of commitments for investment housing fell by 3.9% to $6.5 billion. The number of commitments to purchase new homes fell 2%, with commitments for established homes rising by 1.4%.

Meanwhile, the Queensland state government has said it plans to raise up to $5 billion through the float or QR National.

State treasurer Andrew Fraser told Reporters that, “if you believe in the growth story of Asia, you can believe in this stock. It is a very durable investment”.

The Queensland government said yesterday it plans to sell between 1.464 and 1.684 billion shares in the company, priced at between $2.50-$3 per share.

“The share offer for QR National is officially open, with more than one million share documents set to make their way across Australia from today,” premier Anna Bligh also said.

“This is an opportunity for Queensland mum and dads to be part of a dynamic top 50 ASX-listed company based here in Brisbane.”

Shares in mining giant Fortescue Metals Group jumped over 6% this morning to $6.15 after the company announced a $2.06 billion bank facility that will allow it to fund expansion plans.

“While coming at some cost, even though largely mitigated by the strengthening Australian dollar, Fortescue has now secured the pathway to realise our goal of becoming the world’s best iron ore producer,” chief executive Andrew Forrest said in a statement yesterday.

“[The] refinancing represents critical endorsement of the potential of our assets by world leading financial institutions.”

Shares open at five-month high

The Australian sharemarket has opened to a five-month high this morning, following solid leads from Wall Street last week where investors hope the Federal Reserve will soon announce stimulus measures.

The benchmark S&P/ASX200 index was up nine points or 0.2% to 4960.7 at 12.20 AEST, while the Australian dollar has continued its rise above US99c – bringing criticism from the Federal Opposition, with finance spokesman Andrew Robb calling for more support for exporters.

ANZ shares gained 0.4% to $24.17, while Commonwealth Bank jumped 0.6% to $51.41. Westpac gained 0.1% to $23.20 as NAB rose 0.4% to $25.85.

The United Arab Emirates has now dropped a threat against BlackBerry manufacturer Research In Motion that would have seen the company unable to operate its devices in the area due to security concerns. Now a deal has been made that will allow the company continue, both entities said.

However, Ovum analyst Tony Cripps points out the deal might not be locked down and there could be some difficulties ahead.

“That said, it is unclear what will have changed in the nature of the RIM service that could lead the regulator to be “satisfied services on the devices are now compliant with its security needs” as has been reported when it had previously said the encryption of the BlackBerry service and the storage of data outside of the UAE’s border contravened local policy.

“RIM itself has said nothing on the statement but has previously been very clear that it would not change the architecture of the BlackBerry services to placate countries who found its extremely tight security objectionable. After all, solid security has been one of the main foundations of RIM’s success over the past 10 years.”

Virgin Blue has said it will pursue different options to recoup the cost of its recent computer failures, which come in at $15-20 million. Group executive Andrew David said last month the company is considering some legal action.

Upstream gas under pressure

Fitch has said Australian upstream gas companies are facing pressures on proposed liquefied natural gas projects.

“Fitch expects these companies to continue to use an appropriate mixture of debt and equity to fund major developments,” Fitch energy and utilities director Sajal Kishore said in a research note today, according to Reuters.

“Long-term sales contracts are key to funding and first-mover projects are far more likely to proceed in a timely fashion,” Kishore said. “Fitch does not believe that buyers’ appetites will be deep enough to commit to contracts to underpin all of the proposed projects.”

Meanwhile, IMF members have said at a meeting of world leaders that there is a current discord between member nations about the ongoing “currency war”.

“That there seems to be lack of agreement as to what needs to be done at the global level with the major economies is of concern to us,” Thailand finance minister Korn Chatikavanij told Reuters. “There seems to be a race to the bottom… and that’s very problematic.”

“This is about much more than the Fed getting ready to launch more quantitative easing,” Deutsche Bank’s global G10 currency strategy head Alan Ruskin said. “We’ve had low interest rates in the most developed economies for some time and we have robust growth and the need to tighten policy elsewhere. That suggests the flows going into the emerging world are going to continue.”