Tuesday, May 08, 2012

POMSOX calm as Australian shares slump

Port Moresby Stock Exchange (POMSOX) remained calm but cautious yesterday as Australian shares traded deep in the red, on track for their worst day in three months, on the back of disappointing US jobs growth and European election results.
POMSOX general manager Geoff Mason told The National that there were nine dual-listed stocks – on both Australian Stock Exchange (ASX) and POMSOX - and all were in the red on the day.

 Geoff Mason…calm but cautious

The nine dual-listed stocks are Cue Resources, Coppermoly, Newcrest Mining, Oil Search, Highlands Pacific, New Guinea Energy, Steamships Trading, Marengo Mining, and Kina Petroleum.
“However, it is Newcrest Mining and Oil Search which are showing the largest falls,” he said.
“The negative news around will impact POMSOX as we see Newcrest down 1.2% and Oil Search down 2.4% in Australian trading.
“Any trading on POMSOX will mirror these downward movements.”
Mason added: “We are treating this no differently than any other day.
“Whilst no one likes to see large falls in the markets, markets are an indication of how economies are faring and at the moment there is negative news around.
“On the positive side, when the markets settle down it can be a good time to buy quality shares at lower prices.
“When markets begin to strengthen it is the quality shares that rebound first. “
Mason said the Australian market had opened the week heavily down on the back of news out of America, Europe and Australia.
US job figures released Friday showed lower than expected job figures. This may indicate the US economy was stalling on the back of falling consumer spending.
The political changes in Greece and France put pressure on the Euro bailout. Any uncertainty of the bailout would put pressure back on European markets and any hope the Euro zone problem was nearing an end.
Data out of Australia yesterday indicated the Australian economy is weakening. Only the mining sector on the continued demand for Australian resources and retail on the back of continued price discounting, showed signs of strength. The Australian dollar was below 103 against the US$, which was its lowest level for a long time; and
The Australian government continues to push for a surplus budget which would see a large fall in Government spending. This would put downward pressure on the Australian economy.

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