July 27, 2018 / 2:42 AM / a year ago

Australian shares jump, investors cheer BHP shale assets sale; NZ up

* BHP exits U.S. shale, investors eye share buy-back

* AMP slumps to near 15-year low

* Benchmark set to eke out gains for week

By Nikhil Nainan

July 27 (Reuters) - Australian shares celebrated news on Friday that BHP, the world’s biggest miner, had agreed to sell its troubled U.S. shale assets and promised to pass all proceeds to shareholders.

Nearly a year after putting its U.S. shale assets up for sale and after months of market anticipation, BHP agreed to sell the shale oil and gas assets for $10.8 billion, with BP Plc picking up most of them.

BHP shares were up 2.7 percent on Friday to their highest in more than two months, underscoring the deal’s better-than-expected sale price and expectations of a lucrative share buy-back.

“I think it (the deal) has certainly increased the likelihood of a buy-back and buy-backs have certainly been something that’s been driving markets globally,” said Damien Rooney, director of equity sales at Argonaut.

The deal ends a disastrous seven-year investment in the shale oil business, which triggered investors, led by U.S. hedge fund Elliott Management, to press BHP to dump its shale business.

The sale news helped drive the S&P/ASX 200 index up 0.9 percent to 6,298.4 by 0202 GMT. The benchmark ended slightly down on Thursday, but was set to eke out gains for the week.

AMP Ltd fell as much as 4.9 percent to its lowest in nearly 15 years after the wealth manager said its underlying first-half profit would be down by A$490 million to A$500 million ($361.47 million-$368.85 million), from a year ago.

The fall was due to a company-wide “reset” after a national inquiry found several instances of misconduct, AMP said, noting it was targeting a total fiscal 2018 dividend payout at the lower end of its 70-90 percent guidance range.

“(Lower dividend) That’s probably why the shareholders who are pretty beaten up will be really concerned today,” Argonaut’s Rooney said.

Financials, which account for well over a quarter of the benchmark, were nonetheless Friday’s biggest gainers, with Australia and New Zealand Banking and National Australia Bank up 1.4 percent and 1.2 percent, respectively.

Treasury Wine Estates was the biggest drag on the main board, and is on track for a third straight session of losses after falling more than 4 percent.

Earlier in the week, data showed that Australian wine exports to China surged 55 percent for the year ended June 30, which came after Treasury said it had faced customs delays at Chinese ports.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index gained 0.3 percent, or 29.77 points to 8,963.41. Fisher & Paykel Healthcare Corporation Ltd and Fletcher Building supported the gains, rising 0.8 percent and 1 percent, respectively.

Milk producer Fonterra said Chairman John Wilson resigned for health reasons. Its share price was unchanged. For more individual stocks activity click on (Reporting by Nikhil Kurian Nainan, additional reporting by Aditya Soni in Bengaluru Editing by Eric Meijer)

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