tip off

Morning Market Report

Some disappointing results coming to light as AGM season kicks off.

The market is up 25 points. Dow Jones was up 75 points to 15, 468.

The S&P was up 10 to 1755, another closing high.

Oil fell 1.43% to US$97.80.

Gold rose US$24.40 to US$1340.20 per ounce.

The US$ fell against most major currencies on disappointing jobs data. The Aussie dollar continued its rally and is now trading at US$0.9707.

VIX volatility index rose 1.29% to 13.33.

US treasuries rose  — the 10 year yield fell over nine basis points to 2.514% and the 30 year yield trading fell seven basis points to 3.610%.

European share markets rose, hitting fresh five year highs. The German DAX rose 0.90%.

European bonds were stronger, with the exception of Portugal and Greece.

Base metal prices were stronger  — nickel led the way, up almost 3.5%. Most metals rose more than 1%.

STORIES

  • AGLEnergy (AGK) — Has announced a profit downgrade, signalling a broadly flat profit outlook this year due to warm whether. Underlying net profit will fall in the range of $560-610 million. In the year to June 2013, the underlying net profit was $585.4 million. The unusually warm weather could reduce profit by $30 million.
  • Crown (CWN) — Opposition by Buddhist leaders and political parties in Sri Lanka have led the government to alter tax concessions granted to James Packer’s Crown Ltd for a $400 million hotel resort.
  • Origin Energy (ORG) — Has signaled continuing tough trading conditions through this year, with little improvement in sight. At their AGM today, MD Grant King the group anticipates “strong growth in earnings and cash flow” between fiscal 2015 and 2017 as it benefits from the start up of operations of its Queensland export gas project.
  • Merrill Lynch says growth in the banking sector is expected to be quiet. The sector is expensive, trading 17%-22% above historical average PE multiples.
  • A new study by UBS says Brambles, Amcor and UGL all stand to benefit by de-merging. They say separated businesses perform far better after a spin-off, usually outperforming the market up to a year after the break-up. One month after the de-merger, the spin-off outperforms its parent by an average of 2.4%. Then 8.5% after one year.
  • APN News and Media( APN) — Closed up 8.33% yesterday after announcing that they will sell their remaining stake in the outdoor advertising business to a private equity group.
  • Bega Cheese (BGA) — Closed down 1.96% after the company held their AGM. They told shareholders that the market is increasing the value of their takeover offer for Warrnambool Cheese and Butter Factory every day, so much so that its almost equal to the Saputo offer.
  • Blackmores (BKL) — Shares fell 3.42% yesterday after they said profit was down 31% in  the first quarter of the financial year due to falling sales in Australia.
  • Bradken (BKN) — AGM yesterday. Shares closed up 5.74%. They said the first half has so far proved challenging due to slowing project investment, but they still expect financial year performance to be in line with the previous year.
  • Ruralco (RHL) — Closed down 9.5% after they said they expect profit to fall sharply as a result of lower livestock prices and lower sales of agricultural chemicals due to drought.
  • Southern Cross Media (SXL) — Received their first strike for their executive pay policy at their AGM yesterday.
  • Nine Entertainment Co  —  IPO  — Is looking at listing the day before the Melbourne Cup. Up to $1 billion worth of shares may be available for the public. Some are saying it may be $500-750 million.
  • ANZ shares hit a record high yesterday of 3234c raising ANZ’s market capitalisation to $88.2 billion. This puts the bank  in fourth place behind CBA (market cap $121 billion), BHP ($119 billion) and WBC ($106billion).

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