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Morning Market Report

The Dow Jones still unstable, while local markets rally.

The market is up 11 points. The Dow Jones was down 90 points at 16,041  —  The Dow rose early in the session and was up as much as 100 points at one stage in a 200 point range.

Economic data disappointed  — Disappointing housing starts and building permits put pressure on housing sector stocks and dragged the market lower. The FOMC minutes were also released and showed the economy continued to expand at a moderate pace. The minutes suggested the Committee may change its forward guidance about unemployment, with a fall to 6.5% no longer a catalyst for monetary policy change.

Oil rose 1.00% to US$103.45. 

Gold fell US$13.10 to US$1311.30 per ounce.

The US$ was higher against most major currencies and the Australian dollar was weaker and is currently trading at US90.03c.

US treasury markets were weaker —  The yield on the 10 year bond rose two basis points to 2.733% after weak economic data.

European shares were mixed  — The UK FTSE and German DAX were both unchanged and the French CAC rose 0.24%.

European bonds were stronger —  The yield on the Euro 10 year bond fell one basis point to 1.659% and the UK 10 year bond yield was 2 basis point lower at 2.728%.

Base metal prices were mixed —  Nickel rose 0.36% and aluminium rose 0.20% but zinc fell 0.59% and copper was 0.15% lower.

Iron ore fell US$0.50 to US$124.40 a tonne.

STORIES

  • Auckland Airport (AIA) — Interim profit was up 11.7% to $85.9 million. Underlying profit was up 13.9% to $86.7 million and below an expected $90.1 million.
  • AMP  — full year underlying profit was down 10.6% to $849 million but above an expected $840.5 million. Net Profit was $672 million down from $689 million in the pcp. Final Dividend 11.5c. They expect $200 million in recurring cost savings by the end of 2016.
  • Fletcher Building (FBU) — Net earnings were up 5% to $154 million which was below an expected $161.3 million. Operating earnings (EBIT) 7% higher at $281 million. Interim dividend 18.0c up 6%. Dividend not franked for Australian tax purposes this half. Restructuring costs of $20 million incurred in the half.
  • Fleetwood Corp (FWD) — Interim profit of $4.196 million down 53% and below an expected $6.7 million. Interim dividend of 2c.
  • iiNet (IIN) — Interim profit of $29.101 million down 9%. Underlying profit up 20% to $31.409 million which was better than an expected $26.4 million. Interim dividend of 9c. Revenue up 4% to $493 million. EBITDA up 6% to $95m.
  • Sandfire Resources (SFR) — Profit was down 57.6% to $79 million. Revenue was down 8.4% to $272.4 million. Interim profit after income tax of $33.5 million. Cash of $74.8 million.
  • Breville Group (BRG) — Interim profit of $31.179 million down 1.6%. Total revenue of $311.278 million up 17.7%. Interim dividend of 14c. Financial year 2014 guidance. Profit currently expected to approximate financial year 2013.
  • Adelaide Brighton (ABC) — Full year net profit down 1.2% to $151.1 million which was above an expected$147.9 million. Final dividend of 9c. Record revenue of $1,228.0m up 3.8%. ABC anticipates demand for cement and clinker in 2014 to be similar to 2013 levels.
  • Fairfax (FXJ) — Underlying profit was up 12.1% to $93.1 million which was better than an expected $84.9 million. The result was boosted by a 52% increase in earnings from the metropolitan media business. Net profit was $193.8m. Interim dividend of 2c.
  • Mirvac (MGR) — Profit of $200.2m up 3% but below a broker consensus forecast of $212.6m. Profit attributable to security holders was up 346% to $246.1m. Interim dividend of 4.20c.
  • Investra Office Fund (IOF) — Profit of $56m up 4.3% which was lower than an expected $67.8m. Interim dividend of 9.25c.
  • Invocare (IVC) — Profit of $48.9 million up 9.9% and better than an expected $43.3 million. Sales revenue up 4.5% to $385.4 million. Final dividend 19.5c. New Zealand acquisitions completed in 2013 are expected to generate annual sales of $4.5 million. Full year capex expected of $20 million. Caution using early weeks of 2014 as indicator of 2014 full year result.
  • Leighton Holdings (LEI) — Net profit Up 13% at $508.7 million. Underlying profit was $584 million which was within guidance range of $540-620 million. Dividend of 60c. They see gearing between 20%-35% by 2014 end.
  • Origin Energy (ORG) — Underlying Net profit up 5% to $381 million which was below an expected $391 million. Statutory profit was $322 million down 39%. Interim dividend of 25c. Underlying EBITDA up 3% to $1,082 million. The rise offset a continued weak performance at the electricity retailing business, where operating earnings slumped 23%. Warm weather over winter meant less people needed to power heaters, softening already tepid demand for energy. Origin said the gas-export joint venture with Conoco Phillips (COP) and China Petrochemical Corp remains on track to ship its first cargos of liquefied natural gas in mid-2015.
  • Myer Holdings (Myer) — Has reached an agreement to re-appoint Mr Bernie Brookes as Chief Executive Officer and Managing Director of Myer. He will continue in his role beyond the previously advised conclusion of his contract in August 2014. Myer has reached agreement with Brookes to re-engage him on an “open term” contract.

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