Bank of Queensland flags $91 million loss, Qantas inks China deal: Midday roundup

Regional lender Bank of Queensland has flagged a $91 million first-half loss, driven by an increase in impairment costs, and has announced plans for a $450 million capital raising.

“BOQ’s underlying performance was achieved against a backdrop of continued variability in the strength of the Queensland economy, which has negatively impacted the commercial and residential property market,” BOQ chief Stuart Grimshaw said this morning.

“Queensland has been negatively impacted by the flow-on effects of a downturn in tourism and has endured recent natural disasters such as floods and cyclones.”

The $91 million loss compares with a $48 million profit the previous corresponding period.

Its shares are in a trading halt.

Qantas inks budget airline deal with China Eastern Airlines

Qantas’ budget offshoot Jetstar will set up a budget airline with China Eastern Airline, called Jetstar Hong Kong.

It will fly across China, Japan, South Korea and southeast Asia.

“Jetstar Hong Kong’s fares will be 50% less than existing full-service carriers, which we’ve seen create new travel demand in our markets across Asia because it enables people to take more trips, more often,” the company said this morning.

“Jetstar’s vision is to make travel more affordable for millions of people across Asia, and the demographics of China with its booming middle class are a key part of that plan.”

Qantas shares were up 2.3% to $1.77 at 11.20 AEDT.

Abbott says ‘not cocky’ after Queensland LNP landslide

Opposition leader Tony Abbott says the weekend’s landslide win for the LNP does not guarantee a similar result at the federal election, but highlights that governments are punished for not telling the truth.

“There’s no such thing as a sure thing in politics,” Abbott said in a radio interview this morning.

“The last thing I want to do is get cocky.”

Abbott added that if the Coalition won the next election, he believed it would have the “clearest possible mandate to repeal it.”

“Every fibre of my political being will go towards getting rid of the carbon tax.”

Gunns seeks $400 million in equity raising

Tasmanian timber company Gunns is looking to raise $400 million in new funds, after Richard Chandler Corporation pulled plans to invest $150 million in the company.

In a market update, Gunns said it had been encouraged by investors to “raise sufficient equity capital to provide it with the desired flexibility in its approach to finance the Bell Bay Pulp Mill.”

“In addition, the company believes that its ongoing non-core asset sale program will be enhanced by a material strengthening in its balance sheet.”

The company remains in a trading halt, and says it expects to provide further information regarding the proposed capital raising on April 2.

Sharemarket edges up in early trade

The Australian sharemarket has opened slightly higher this morning, led by positive results from the energy market and from offshore markets late last week.

The benchmark S&P/ASX200 index was up 11.4 points or 0.3% to 4281.8 at 11.50 AEST, while the Australian dollar increased after a solid start from Wall Street late last week. The dollar is now trading at $US1.04c, up from $US1.03c.

In the US, the Dow Jones Industrial Average rose 0.3% to 13,080 last Friday.