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Monday, 5 October 2009

A quiet start to the week

by Marcus Padley

The market is down 6. A quiet start to the week as it’s a Labour Day holiday in New South Wales, South Australia and the ACT today.

Wall St. closed down 21. It was the seventh time in eight sessions that the market finished lower. The Dow was up 16 at best and down 79 at worst. Worse-than-expected economic numbers pushed the market lower. Metals finished lower as did the Oil price. Gold closed up $3.60 to $1004 and the Aussie dollar fell to 86.63c.

The RBA has a meeting tomorrow. After recent comments that the fiscal stimulus package has perhaps gone too far you might imagine a rate rise was on the cards although the futures market isn’t pricing one in until next month and the consensus opinion is that they will leave rates on hold tomorrow.

Making the news today…

  • ANZ Bank (ANZ) could be buying more Asian assets from Royal Bank of Scotland after talks between the bank and Standard Chartered collapsed on the weekend regarding the sale of operations in China. ANZ down 30c to 2331c.
  • According to Street Talk, Commonwealth Bank (CBA) is the bank that stands to gain the most from rate rises because of the size of its deposit book. The big four have made a habit of raising rates on loans much quicker than the rates they pay on deposits. CBA down 12c to 4988c.
  • Talk of Coca-Cola Amatil (CCL) and Foster’s Group (FGL) being involved in deals on the back of international players such as SABMiller and Heineken suggesting they are on the hunt for acquisitions. A bit of an old one, but SABMiller bidding for Foster’s Group has re-surfaced. CCL up 4c to 996c and FGL down 1c to 551c.
  • Bids for the MYER float (due to list on November 2) have apparently come in better than most institutions expected.
  • Sino Gold (SGX) announces Eldorado Gold has received unconditional approval from the FIRB to combining their businesses. SGX up 12c to 667c.
  • Babcock & Brown Infrastructure (BBI) is expected to announce an $850m capital raising on Wednesday according to the AFR. BBI last traded at 5.3c.
  • According to the AFR, research and pre-marketing for Kathmandu Ltd’s IPO believed to be around $400m was distributed to clients.
  • Some interesting comments: Former Fed Chairman Alan Greenspan predicts the jobless rate will pass 10% and stay there for a while and added a second stimulus package was not required. Dr. Doom, Nouriel Roubini, says stocks have risen “too much, too soon, too fast”.
  • China closed today. The IMF warns Australian unemployment will rise from 5.8% to 7.0%.

The Dow Futures are up 17 at noon.

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

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