Shares higher after EU summit, Coal giants to merge: Midday Roundup

The local sharemarket has risen higher this morning after a positive overseas lead from late last week, after the European Union agreed on finding new solutions to stop the current debt crisis.

However, some experts are still concerned there isn’t enough detail surrounding the solution, while British Prime Minister David Cameron refused a motion to ratify the new treaty.

The benchmark S&P/ASX200 index was up 50 points or 1.2% to 4253.3 at 12.00 AEST, while the Australian dollar also rose to $US1.02c after last week’s announcement.

AMP shares rose 2.33% to $4.40, while Commonwealth Bank shares rose 1.84% to $49.74. ANZ rose 0.91% to $21.04 as Westpac rose 1.09% to $21.30.

Experts have also suggested that other problems cloud the Eurozone deal, such as Italian bond prices and weaker trade figures in Germany.

This also comes after S&P put several European countries on watch, at risk of downgrading credit ratings.

Whitehaven, Aston to merge

Coal miners Whitehaven and Aston Resources will merge to create the single largest coal company listed on the ASX, both announced this morning.

In a deal Aston shareholders will receive 1.89 shares for every Aston share, while Whitehaven shares will receive a fully franked dividend of 50 cents per share.

The deal, worth $5.1 billion proposal, has unanimous support from both companies.

“This asset base, combined with the positive long-term outlook for Australian export coal, places the merged entity in an excellent position to generate ongoing value for all shareholders,” said Whitehaven chairman John Conde.

Nathan Tinkler, the country’s youngest billionaire and Aston’s largest shareholder, also said the deal would present new and exciting opportunities.

“I believe the merged entity will represent an extremely attractive investment of scale in the rapidly consolidating Australian listed coal sector and is positioned to deliver substantial synergy benefits to shareholders,” he said.

Trade surplus down but housing finance rises in October

The trade surplus fell in October, according to the latest figures from the Australian Bureau of Statistics.

The figures show the surplus for October was a seasonally adjusted $1.595 billion, down from $654 million in the previous month – analysts had expected a surplus of $2 billion.

The figures also show exports were flat in adjusted terms, while imports rose by 2%.

Meanwhile, ABS figures also show housing finance rose for a fourth consecutive month in October, with the number of home loans granted rising 0.7% to 51,981.

The rise is slightly above expectations, with analysts previously forecasting finance to remain flat.

Qantas downbeat on global outlook

Qantas chief executive Alan Joyce says the current outlook for the global economy is still gloomy and that Australia will be subject to a number of difficulties.

“The next five years will see further competitive pressures from Middle Eastern and, increasingly, Chinese carriers in international markets,” he said at the company’s strategy day.

“At home we will see continuing attempts to erode our domestic dominance.”

“We are well positioned to respond very effectively to these challenges, and capture targeted growth opportunities while continuing our focus on lowering costs and improving productivity.”