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Tuesday, 18 August 2009

Wall St has worst fall in six weeks

by Marcus Padley

The market is down 13. The SFE Futures were down 45 this morning. It seems we might have absorbed most of last night’s 2% fall in the US market overnight in yesterdays 1.6% fall in the ASX 200 which came on the same driver  — the weaker than expected Japanese GDP number that we reacted to before they did.

Wall St. experienced its worst fall in six weeks. Dow closed down 186. Down 8 at best and down 205 at worst. Metals fell again, oil price fell to new lows for the month and Gold also fell $12.90. The Aussie fell to 82.08c from 82.87c yesterday morning.

Amcor Ltd (AMC) announced it will buy parts of Rio Tinto’s Alcan Packaging business for $2.42bn. It will acquire Alcan Packaging’s European and Asian food, and global pharmaceuticals and tobacco businesses, and will look to fund the acquisitions through a 4-for-9 entitlement offer at 430c a share, a $1.61bn underwritten equity raising and bank debt.

Results dominating the headlines…

  • James Hardie (JHX) up 22% on the back of its 1Q FY10 result. The key driver to the result was US EBIT margins of 31.3% compared to 23.9% last year. Management expect FY10 result to be at the top end of analysts’ forecasts of $US39- 67m.
  • United Group (UGL) result has come in better-than-expected. It announced a FY09 NPAT of $142.5m, up 8.7%. Its underlying result was up 10% to $150.3m. Analysts’ were expecting $148m. UGL up 3% to 1309c.
  • OneSteel (OST)  — Slightly better than expected result  — the stock is up slightly, up 1.34%. Its underlying result fell 32% to $215m, but above its guidance back in April of $200m.
  • Monadelphous (MND) – Results in line with expectations  — announced a FY09 NPAT of $74.2m, up 6.8%. Revenue was up 18% to $1.13bn with a 44c ff final dividend, up from 43c. MND up 5.3% with the CEO providing cautiously optimistic comments.
  • The National Australia Bank (NAB) has bought Challenger Financial Services’ (CGF) mortgage management business for $385m. CGF is out of its trading halt and has fallen 9.6%. NAB down slightly  — 7c to 2701c.
  • Western Areas (WSA) down 1.2% after announcing a FY net loss of $35.2m with no final dividend.
  • Dexus Property Trust (DXS)  — down 6.4% to 72c  — after announcing a FY net loss of $1.46bn on the back of property devaluations. It had operating earnings of $526.3m, up 5.7% from $498m. It has forecast FY10 EPS of 7.3c and a FY distribution of 5.1c.
  • Origin Energy (ORG) announced its liquefied natural gas JV with ConocoPhillips has chosen Laird Point on Curtis Island in QLD as the site for its proposed LNG terminal.
  • Santos (STO) has sold 60% of its Petrel, Tern and Frigate gas fields in the Bonaparte Basin offshore to French-based GDF SUEZ for up to $US370m.
  • Both James Hardie (JHX) and iSoft Group (ISF) have hit fresh yearly highs on the back of their results.

The Dow Futures are up 30 at midday.

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

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