Australian Stocks Decline, Led By Wesfarmers, Commonwealth Bank

By Ian C. Sayson

Nov. 11 (Bloomberg) -- Australian stocks fell after business confidence plunged to a record low and a measure showed credit is hard to get for one in four companies, increasing signs the economy will sink into its first recession since 1991.

Macquarie Bank Group Ltd., the nation's biggest securities company, and Wesfarmers Ltd., the country's No. 2 retailer, sank at least 10 percent. Commonwealth Bank of Australia lost 6.3 to its lowest close in more than three years after Citigroup Inc. told investors to sell the stock. Babcock & Brown Ltd. slumped more than 20 percent on concern over its ability to sell assets.

The S&P/ASX 200 Index fell 146.90, or 3.6 percent, to 3,960.90 at the close in Sydney, its lowest since Oct. 29. The S&P/ASX 200 Index futures contract expiring in December dropped 2.3 percent to 4,003, while the All Ordinaries Index lost 3.4 percent to 3,921.80.

The S&P/ASX 200 has slumped 38 percent this year on concern the economy will not be spared from a looming global recession triggered by the worst financial crisis since the Great Depression.

Australian business confidence last month slumped 21 points to minus 29 from September, the lowest level since National Australia Bank Ltd. began the series in 1989. A new measure of credit availability, which the bank introduced today, shows one in four businesses is finding it harder to borrow.

Macquarie Bank decreased 10 percent to A$26.81, its lowest since Sept. 18. Wesfarmers declined 12 percent to A$20.13, its biggest loss since Oct. 10.

Commonwealth, Babcock

Commonwealth Bank, the nation's biggest mortgage provider, sank 6.3 percent to A$35.61, its lowest close since April 2005. The bank was downgraded to ``sell'' from ``hold'' at Citigroup, which lowered the stock's price target to A$35 from A$42 on prospects it will likely raise capital in six months.

National Australia Bank Ltd., the biggest bank by assets, slumped 9 percent to A$20.15 after the company increased by half the size of a share sale to A$3 billion to shore up capital. The bank sold the shares at a discount.

Babcock & Brown, an Australian asset manager struggling to repay debt, fell 20 percent to 60.5 Australian cents, extending its decline to 40 percent in two days on concern over the company's prospects of selling assets.

The following are among the most active companies in Australian trading. Stocks symbols are in parentheses after company names.

Alumina Ltd. (AWC AU), a partner in the world's No. 1 producer of the material used to make aluminum, dropped 28 cents, or 12 percent, to A$1.97, its steepest decline since Oct. 16. The company and its partner Alcoa Inc. suspended expansion work on the Wagerup refinery, citing the global financial crisis.

Asciano Ltd. (AIO AU), an Australian port and railroad operator, plunged A$1.03, or 60 percent, to 69 Australian cents after Citigroup told investors to sell the stock and slashed its target price 87 percent to 82 cents. The stock, previously rated ``buy'' at Citigroup, was halted today on the Australian stock exchange.

Centro Properties Group (CNP AU), the Australian shopping mall owner that has until Dec. 15 to sell assets to repay debt, fell 0.2 cents, or 2.9 percent, to 6.8 Australian cents, its lowest since Oct. 29. The company accepted lower offers for at least two of its shopping centers, the Australian newspaper reported.

CFS Retail Property Trust (CFX AU), an Australian shopping- center operator, fell 4 cents, or 2 percent, to A$1.96 after it said its retail sales showed signs of slowing in September and that it expects weakening growth in the next 12 months.

Count Financial Ltd. (COU AU), a provider of personal loans and financial planning services, sank 7 cents, or 6 percent, to A$1.10, its biggest loss since Oct. 17. The stock was downgraded to ``equalweight'' from ``overweight'' at Morgan Stanley, which cut the stock's price forecast to A$1.16 from A$1.98.

Foster's Group Ltd. (FGL AU), the nation's biggest brewer, fell 18 cents, or 3 percent, to A$5.75, its biggest loss since Oct. 24. The company scrapped plans to sell its A$4.5 billion ($3 billion) wine business for cash as the price would have been too low, the Australian Financial Review newspaper reported, without saying where it got the information.

Harvey Norman Holdings Ltd. (HVN AU), Australia's biggest furniture and electronics retailer, fell 6 cents, or 2.1 percent, to A$2.83, its biggest loss this month. The company said its like-for-like sales in the 28 days ended Nov. 9 fell 2.8 percent and that its margins remain under pressure.

Rio Tinto Group (RIO AU), the world's second-biggest aluminum producer, declined A$1.51, or 1.9 percent, to A$76.49 after it said a transformer failure at its New Zealand smelter cut capacity by about 30 percent. The company said it's studying options to restore production.

White Energy Co. (WEC AU), an Australian coal processing company, climbed 4 cents, or 2.2 percent, to A$1.90, its biggest gain in four days. The company said it formed a 51 percent-owned venture with a unit of Cargill Inc. to process coal in Africa.

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net.