Herald Sun

QBE’S BLACK EYE AS BOURSE BOUNCES BACK

- By MACCA

IN­SURER QBE will sport a $US120 mil­lion ($163 mil­lion) shiner on the sale of its Mort­gage and Len­der Ser­vices busi­ness in the US but says the deal will free up cash­flow.

QBE has agreed to sell the busi­ness to Na­tional Gen­eral Hold­ings for $US90 mil­lion but ex­pects to make a $US120 mil­lion loss on the deal, due to non-cash charges and write-offs as­so­ci­ated with the trans­ac­tion.

The deal will free up more than $US100 mil­lion of cap­i­tal to be rein­vested else­where in its oper­a­tions, the Syd­ney-based com­pany said.

Shares in QBE gained 28c, or 2 per cent, to $14.67.

It came as the broader Aus­tralian share mar­ket closed higher, spurred by the Greek par­lia­ment’s ap­proval for bailout con­di­tions.

“We’ve emerged from the dark clouds of Greece and China,” IG mar­kets strate­gist Evan Lu­cas said.

“We were un­der­per­form­ing com­pared to in­ter­na­tional and Asian mar­kets and ap­proach­ing re­port­ing sea­son with pes­simism, but in the past week in­vestors have be­gun to get back in the mar­ket as it looks more at­trac­tive.”

Yesterday marked ae third straight day of gains for the share mar­ket, with some of that down to the re­bound on Chi­nese mar­kets.

The bench­mark ASX 200 in­dex closed up 33.4 points, or 0.6 per cent, at 5669.6 points while the broader All Or­di­nar­ies in­dex was up 30.8 points, or 0.6 per cent, at 5649.8.

Wood­side Petroleum shares tum­bled 39c to $34.57 af­ter plung­ing oil and gas prices con­spired to al­most halve its rev­enue.

Wood­side’s rev­enue slumped to $US898 mil­lion in the June quar­ter, from $US1.68 bil­lion a year ago.

BHP Bil­li­ton re­cov­ered from losses in­curred af­ter Wed­nes­day’s an­nounce­ment that its full-year earn­ing would take a $2.8 bil­lion hit, clos­ing 18c higher at $27.08.

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