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Morning Market Report

The market is down 35. SFE Futures were flat this morning.

Dow Jones up 1. The Dow was down 32 at worst and up 46 at best. The Dow managed to claw back some small gains after losing 277pts last week, volumes were light and bond markets was closed for the veterans public holiday. Markets were cautious ahead of the euro-zone finance ministers meeting which will be held in Brussels in their late afternoon. Greek banks down, led by selling in Alpha Bank SA, after a leaked copy of the “troika” review of Greece’s medium term fiscal outlook hit dealers’ screens. Reports were coming out that the Troika’s interim report has shown that Greece would require additional bailout funds of 15 billion euro through 2014 due to ongoing deterioration of their economy. The Troika sees “very large risks” to the Greek program, although Greece’s compliance has “perceptibly improved”. It added that giving Greece a 2 year extension to meet budget targets would ease the impact of austerity measures. Greek market down 3.63%. If press reports are right  —  the “troika” (IMF, European Commission and European Central Bank) report on Greece’s financial situation does not make for pretty reading.  Best sectors  —  Health Care (+0.5%); Telecoms (+0.5%) and Industrials (+0.4%). Worst sectors  — Utilities (-0.8%) and Technology (-0.5%). European markets mixed  — UK FTSE down 0.04%, German DAX up 0.07%, France down 0.35%, Spain down 0.90%, Italy down 0.39%. The Stoxx Europe 600 index down 0.3% with Industrials (-0.6%), Health Care (-0.5%), Energy (-0.4%), Technology (-0.3%) and Basic Materials (-0.3%), Financials (+0.2%) and Consumer Goods (+0.1%).

  • Incitec Pivot (IPL)  —  FY result  — Net profit of $510.7 million up 10.25% from $463.2 previously. The profit growth was due to one off items which gave a $106 million benefit 2012, and a $67 million cost in 2011. Net profit excluding one off items was $404.7 million which was broadly in line with consensus forecast. Final dividend of 9.1c with 6.83c franked. IPL is up 4.81% to 305c.
  • Leighton Holdings’ (LEI) subsidiary has been selected as the preferred party by US group Wynn Resorts to design and build the Wynn Cotai hotel resort in Macau. Leighton has also won the contract to commence construction of 567 Collin Street. LEI is reviewing the value of their investment in troubled BrisConnections. Any impairment would be offset by the $115m gain on the recent sale of the Thiess Waste Management business. LEI is down 0.7% to 1693c.
  • DWS  —  AGM  — Expects overall FY13 financial performance to be similar to FY12, but with 1H13 down from the previous period due to the unusually strong 1Q12. The company’s says 1st H2013 profit guidance will be in the range $7.75 million-$8.25 million (down 13 – 19% pcp). Patersons have reduced their recommendation to Hold from Buy on the expectation of a weaker than anticipated 1H13 result. DWS is down 9.87% to 137c.  
  • NAB’s business survey showed business conditions fell to -5 in October from -3. Conditions fell to their lowest point since May 2009 due to weak wholesale and manufacturing sectors. Business confidence also fell to -1 in October compared to 0 in September.

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