Virgin Blue's soaraway float success

AUSTRALIA was treated to a vintage display of razzmatazz from Sir Richard Branson for the debut of his discount airline Virgin Blue, which opened at A$2.40, 7% higher than its A$2.25 issue price. The shares touched A$2.49 before easing back.

A beaming Branson slurped champagne from a stockman's hat plucked from the head of one of the publicity women who always surround him on these occasions, as he turned the Australian Stock Exchange foyer into a departure hall. 'Today we've sort of grown up,' he said.

Billionaire Branson has made a cash windfall of more than A$400m (£170m) from the float of the company, in which he will retain a stake of about 25%. Local transport magnate Chris Corrigan's transport and logistics firm Patrick Corp will maintain its 45% holding.

Branson said he could not be happier with the progress of Virgin Blue, which has captured more than 30% market share in less than three years.

Virgin Blue, which will rank among Australia's top 70 companies, carried nearly 7m passengers in the financial year to June and has forecast a rise to 10m passengers in 44 planes by the end of September.

But it faces stiff competition from Qantas's planned no-frills-carrier Jetstar, due to take to the air next year.

The funds raised from the Virgin Blue float will be used to finance growth into the South Pacific.

With 1.03bn shares in issue and a forecast profit of A$150m, Virgin Blue is priced at 16.8 times earnings, against 11.8 for Aussie national carrier Qantas.

The All Ordinaries index was up 2.4 points, or 0.07%, at 3234.5.

Miners and banks were the leaders, with BHP Billiton up 1.13% at A$11.63, Rio Tinto up 0.96% at A$36.13 and National Australia Bank 0.03% higher at A$30.00 after shedding earlier gains.

Japanese stocks dived, weighed down by a sagging jobs market in the US and likely consequent lower demand for consumer goods from the Far East. Exporters suffered. Car giant Nissan fell 2.98% to 1237 yen while Canon was similarly hit, down 2.57% to 4930 yen, on fears the US jobs data and a strong yen would weigh on their results.

Financials were also hit, with Daiwa Securities off 5.98% at 676 yen and top lender Mizuho Financial down 1.74% at 283,000 yen.

The Nikkei 225 Average plunged 328.12 points, or 3.2%, to 10,045.34.

It was a similar story in Hong Kong, where the Hang Seng fell 123.17 points, or 1%, to 12,191.6. Blue-chips fell across the board on fears the soft US jobs market will affect demand in Hong Kong's second-biggest export market.

Hutchison Whampoa was anchored by more concerns about the cash drain of its 3G mobile phone service rollout. It continued the slide which began last week on news that it needed more funds if it were not to delay the break-even target for the services. The shares fell 3.59% to HK$53.75.

Johnson Electric fell 0.96% to HK$10.30 ahead of first-half results which were expected to show a 4% rise in earnings.

Singapore was little better, with the Straits Times index down 9.13 points to 1723.9, a 0.53% drop, as investors took flight on the same concerns surrounding US demand and what that may do to corporate earnings. Creative Technology was the biggest loser, off 2.7% to S$18, while Chartered Semiconductor Manufacturing dipped 2.42% to S$1.61.