Australian Stock Market- Close 05/25/2011

The S&P/ASX 200 Financials index was one of the worst performers after falling 1.04 pct or 45.1 pts to 4275.9. National Australia Bank (NAB) was the biggest drag on trade and lost 1.93 pct or 51 cents to $25.98, Commonwealth Bank of Australia (CBA) slumped by 1.79 pct or 91 cents to $50.01, Westpac (WBC) lost 0.55 pct or 12 cents to $21.72 and ANZ Banking Group (ANZ) eased by 0.46 pct or 10 cents to $21.70.

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There has been concern recently from some in regards to the exposure that Australian banks have in troubled European nations. However, the exposure is a lot less than most people think. As an example, NAB is estimated to have less than 0.7 pct of its total assets invested in Portugal, Ireland, Italy, Greece and Spain which is a group of nations often called by the somewhat controversial acronym, PIIGS.

Online car classifieds website, Carsales.com (CRZ) announced an on-market share buy-back for up to 10 pct of its shares over the next 12 months. Based on yesterday’s closing price, this would cost the company close to $106 million. The buyback period kicks off on 9 June and does not need shareholder approval. CRZ shares jumped 1.96 pct or 9 cents to $4.69.

Although most sectors ended lower today, the retailers posted healthy gains throughout the day. Discount retailer, JB Hi-Fi (JBH) received a broker upgrade early in the day after the stock has fallen by 11 pct throughout the month of May. JBH rose 1.94 pct or 32 cents to $16.85. Australia’s largest department stores did even better with Myer (MYR) jumping 3.58 pct or 10 cents to $2.89 while its competitor David Jones (DJS) rose 2.35 pct or 10 cents to $4.35.

One of the world’s largest owners of shopping centres, Westfield (WDC) held its Annual General Meeting (AGM) today at the Sydney Town Hall starting at 10am (AEST) this morning. The company reaffirmed its previous earnings guidance of $1.7 billion for the 2011 full year. WDC shares ended better than most by falling a modest 0.22 pct or 2 cents to $9.01.

Australia’s largest airline, Qantas (QAN) ended 0.95 pct or 2 cents lower to $2.09 after a warning that its pilots could be preparing to take industrial action against Australia’s oldest airline for the first time since the mid 1960s.

According to the BRW Rich 200 list, Gina Rinehart is the richest person in Australia with her net wealth estimated at AU$10 billion. Gina Rinehart became the country’s first female billionaire back in 2006. She is the daughter of the late mining magnate Lang Hancock, who famously discovered the world’s largest iron ore deposit in the Pilbara region of Western Australia in 1952.

The Hancock Group was founded by her father and is the holder of a number of iron ore leases in the Pilbara region and covers as much as 500 square km.

On the economic front, the Australian Bureau of Statistics (ABS) released numbers on construction work for the previous quarter. There was a 0.7 pct improvement in the amount of construction work done across the country in the March quarter (January to March 2011). Most of the gains came from engineering work done which rose by 4.6 pct, while commercial building slumped 10.2 pct over the same period.

Commsec Economist, Savanth Sebastian said that “The lift in construction activity was certainly a welcome result, despite the modest nature of the rise. It was especially pleasing given that it was solely driven by the private sector, and in an environment that was disastrously affected by wet weather. Certainly states on the eastern seaboard fared worst with Queensland and NSW both seeing a drop-off in construction activity but the smaller states and territories experienced stronger activity.”