Briefs
Sydney Morning Herald
Saturday February 5, 2011
MARKET MAKERS BHP BillitonShares: $46.67 (+$2.42)BHP Billiton said it plans to move to the feasibility study phase on its Jansen potash project, indicating it is serious about producing from the basin. Experts predict the project could produce 8 million tonnes a year by 2025, with a mine life of about 70 years. It sought an immediate presence in the potash market last year via its $US45 billion ($44.7 billion) bid for Potash Corporation, amid growing demand for fertiliser. The failure of that takeover helped to speed the Jansen project.QBEShares: $18.20 (+70)Analysts warn QBE's acquisition of the US insurer Balboa could obscure a lacklustre 2010 performance, with margins lower than expected. Yesterday's statement of likely earnings said net cost to the company from the floods in Victoria, northern NSW, and Queensland were about $145 million, with early estimates for cyclone Yasi about $100 million. The group says the claims are "well within the significant allowances for large risks and catastrophic claims" in its business plans.TabcorpShares: $7.33 (+38)Tabcorp shares rose 5 per cent this week, after reporting net profit after tax of $265.5 million for the half-year to December 31. Much of the profit came from its casino business, reflected in revenue from high-rolling gamblers, which rose by 36 per cent. Tax credits worth $9 million helped the result. The company lost $10 million in revenue from the recent flooding on the east coast, and doubts still linger about the planned demerger of its casino division and upgrade of its Queensland casinos.GARETH HUTCHENSSuncorpShares: $8.56 (-6)Suncorp shares lost ground after the ratings agency Standard & Poor's warned of banks with exposure to the Queensland floods. The group said the financial effect of cyclone Yasi will be minimal, capping its net insurance claims costs at $10 million. The Assistant Treasurer, Bill Shorten, met with insurance bosses on Thursday, where the issue of plain-English definitions of floods was discussed. Investors will be concerned if insurers such as Suncorp have to cough up more as a result.QantasShares: $2.41 (+1)Qantas shares rose on Thursday when the company announced plans to raise fuel surcharges on international flights, but most gains were lost the next day, leaving the company up only slightly. Meanwhile, Qantas flights to Cairns and Townsville were suspended due to cyclone Yasi, with the Cairns route reopening only yesterday. The airline has been rescuing Australian tourists from Cairo in the recent Egyptian unrest, but a brake problem with a 747 left others stranded for a time.IAGShares: $3.73 (-8)IAG shares finished down on the week, despite the possibility of lower claim costs resulting from cyclone Yasi. The company expects claims from the recent floods in Queensland, NSW and Victoria to total $135 million to $170 million, while claims from Yasi are expected to cost a maximum of $125 million. "It is too early to determine whether the event will reach this level," the company told the ASX yesterday. Last year IAG paid $556 million in reinsurance premiums.
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