Sydney, Aug 4, 2008 AEST (ABN Newswire) - The Australian share market opened higher today led by the financial sector and despite disappointing US economic growth data. US equities slumped on readings on jobs and manufacturing which indicated that businesses and workers still face a tough economy.

The US economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, signaling that the country is in worse shape than investors had anticipated. Economists said it was going to widen and deepen. Gross domestic product increased at a 1.9% annualized rate, the Commerce Department said in Washington. The Labour Department said that recently more Americans filed claims for unemployment insurance than at any time in more than five years.

In Australian market At 10.15am (AEST), the benchmark S&P/ASX200 index added 24.4 points, or 0.5 per cent to 4928.4, while the broader All Ordinaries was up 20.8 points, or 0.42 per cent, to 4998.8. The miners may decline as metals including gold and copper slipped on Friday.

At 0745 AEST on the Sydney Futures exchange, the September share price index futures contract was 38 points lower at 4,875.

Key Economic Facts and Figures

The Australian currency fell as low as US92.86 cents this morning,down from Friday's domestic close of US93.64c. With investors worried about the slowing economy, financial markets have priced a greater chance the Reserve Bank will cut rates later this year and in early 2009. There has been some recent speculation the Reserve Bank later this year or in early 2009 could cut rates by 50 basis points at a board meeting.

A new mortgage market report shows that the Australian banks are profiteering from customers despite claims by the industry that margins are suffering from a troubled credit market. It says the major banks have not only survived but strengthened thanks to the credit crisis and became the market price setter.

The house price index for capital cities for the June quarter, to be released by the Australian Bureau of Statistics this morning, could show whether the economic slowdown is biting the real estate sector. Economic reports over the past week has provided further evidence that the economy is slowing on the back of high interest rates and rising petrol prices.

Australia and New Zealand Banking Group (ASX:ANZ) releases its job advertisements data for July.

M&A News

Just Group Ltd says it will recommend a hostile offer for the company if predator Premier Investments Ltd receives acceptances of more than 50 per cent. Premier has so far received enough acceptance instructions to take relevant interest to 46.97 per cent of the ordinary shares in Just.

Seven Network Ltd (ASX:SEV) is set to emerge as a substantial shareholder in the James Packer-backd Consolidated Media Holdings Ltd. (ASX:CMJ). It is believed that Seven have increased its stake to 5% from 4.82% and intends buying more shares.
Dubai Government-owned developer Nakheel has purchased 31.2 million shares in Mirvac (ASX:MGR), lifting its stake from 12.6 to 14.8 per cent.

Important Corporate News

Australia's second biggest listed investment company Argo Investments Ltd (ASX:ARG) booked a 71.5 per cent lift in net profit to A$294.116 million. It says volatility in the Australian share market is likely to continue after it posted a large rise in profit, boosted by asset realisations.

Shares in Lend Lease (ASX:LLC) fell as much as 10 per cent in early trading today after the company said it expects full-year statutory profit to fall 47 per cent this year. The company is also forecasting a ten per cent to 15 per cent decline in operating profit after tax in fiscal 2009 from the A$447.1 million expected in 2008.

Further to its announcement last Friday, Babcock & Brown Capital Ltd (ASX:BCM) today released an addendum to the independent expert report prepared by KPMG Corporate Finance (Aust) Pty Ltd. As a result BCM has widened its off-market tender price range to between A$3.25 and A$4.50 a share from between A$3.50 and A$4.50.

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