Crikey

The market is up 54. The SFE Futures suggested a 10 point gain this morning. The reason for today’s rise is RIO announcing a $US15.2bn rights issue and an iron ore joint venture with BHP Billiton. BHP and RIO are responsible for 49 of those 54 points. BHP up 8% to 3792c, RIO up 11% to 7425c.

Our market is closed on Monday  — Queen’s Birthday holiday.

The Dow Jones closed up 75 — closed on its high. Dow up 76 at best down 41 at worst. S&P 500 up 1.15%. NASDAQ up 1.32%. Gold up $16.70, Oil up 4% and metals all had a positive session in London.

MAIN STORY TODAY: Chinalco deal off  — BHP deal on. RIO has announced an iron ore JV with BHP. BHP will pay RIO $5.8bn for an equity interest and the business will then be owned 50:50. It also means they have bigger bargaining power when it comes to setting prices. Early comments suggest there will be $10bn worth of synergies. Rio also announced a $US15.2bn rights issue. It will not pay an interim dividend and expects to pay a final dividend if the trading environment improves. The cash will be used to reduce debt to $US23.2bn. Analysts’ expect the JV to get the green light from regulators.

In other news…

• Energy Developments (ENE) has received an unsolicited, conditional and incomplete bid from private equity. Its biggest shareholder, Infratil, might sell its stake to the company to give it a 19.9% shareholding. The board will review the offer and consult other major shareholders.
• Neptune Marina (NMS) announces an earnings and revenue upgrade, a share purchase plan and that it has raised $40m to fund future growth.
• Fortescue Metals (FMG) announces it has sealed a deal with BC Iron, putting it on track to become the Pilbara’s next iron ore producer. Some brokers suggest FMG will be re-rated based on the RIO/BHP JV. FMG breaking out  — up 21% to 340c.
• BlueScope Steel (BSL) completes its $614.6m retail component of its equity raising. Its underwriter Credit Suisse has taken up a 59m share shortfall under the raising.
• AGL Energy (AGK) has refinanced $800m of its 2009 and 2010 debt obligations via new facilities maturing June 2012.
• Aspen Group (APZ) has provided a market update.
• Carbon Energy (CNX) has successfully completed a $32m capital raising.
• Karoon Gas Australia (KAR) in a trading halt this morning pending a capital raising.
• A stock called Enerji Ltd (ERJ) that is up 325% today.
• Citi note in their research this morning that the All Ords in US$ terms has risen over 64% in 60 days, the biggest three-month rally in over 50 years.
• GSJB Were has placed Equinox (EQN) on their Conviction List as a Buy idea saying copper is their preferred base metal and that earnings upside risk remains.

The Dow Futures suggest a 3 point rise on Wall Street tonight.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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