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Morning Market Report

A strong start for local and worldwide markets off the back of more good news from the US.

The market is up 43 points. The Dow Jones was up 91 at 16,368  after a positive start due to a strong lead from European share markets, shares drifted lower until upbeat economic data boosted the index. The market was up 130 points at one stage with gains generally broad-based.

US economic data was largely positive —  consumer confidence rose to a six year high of 82.3 and a measure of home prices rose 0.8% in the month and 13.2% from year ago levels. New home sales fell 3.3%.

Market concerns generally eased —  The CBOE Volatility Index (VIX), a measure of investor uncertainty, fell 7.1% to 14.02.

ECB stimulus talk —  Governing council member, Jens Weidmann, said that the central bank had not ruled out providing further stimulus to support the euro zone as it slowly recovers from the debt crisis.

ECB President Draghi also spoke, saying the ECB is not currently seeing any evidence of deflation.

German data mixed —  The Ifo business climate index fell to 110.7 in March, below expectations. However the current assessment component of the index - which rose to 115.2 versus 114.4 last month – was seen as evidence of a continued upward trend.

UK consumer prices rose 0.5% in February and 1.7% over the year — in line with estimates but below the Bank of England target.

Russian concerns faded —  The MICEX closed 2% higher, breaking a four-day losing streak.

The Aussie dollar continued to rise and reached a high of US 91.76c - it’s currently trading at US 91.64c. Philip Lowe described it as “uncomfortably high” yesterday. He speaks again today at the Centre for International Finance and Regulation, and Governor Glenn Stevens speaks at the Credit Suisse Asian Finance Conference.

Gold stabilised —  rising US$0.40 or 0.03% to US$1,311.60 an ounce.

Iron ore rose US$1.30 to US$111.80 a tonne.

STORIES

  •  G8 Education (GEM 476c) — Have announced a capital raising of $100m, comprising a placement of ordinary shares to institutions and sophisticated investors in two lots of $50m each. The two tranches were at an issue price of 460c. The proceeds from the capital raising will be used to fund the acquisition of Sterling Early Education Limited and 91 childcare and early education centres. In conjunction with the placement, shareholders will be offered the opportunity to participate in the Share Purchase Plan. The Share Purchase Plan will offer Shareholders the opportunity to subscribe for up to $15,000 of the GEM shares. GEM is up 3.26% in early trade.
  • Nufarm (NUF 413c) — first half profit of $18.8 million up from $8.4 million more than double from what was posted a year ago. The result was boosted by a number of one-off tax credits during the half and strong growth in South America, more than offset the impact of drought conditions in Australia and lower earnings from North America and Europe. NUF expects their full year profit to be above the $81 million during 2012/13 financial year. Fully-franked interim dividend of 3c.
  • Automotive Holdings (AHE 360c) — Have announced the successful completion of a share $115 million placement.
  • Beadell Resources (BDR 60c) — Up 4% in early trade on the back of their full year results.
  • Sigma Pharmaceuticals (SIP 61c) — Have issued a market update. They have purchased Central Healthcare for $24.5m. Further potential for an earn-out payment at 30 June 2015. Acquisition will be immediately earnings accretive and will generate approximately $3.5 million in additional annual EBITDA in first full year of operations. ACCC clearance already received.
  • Panoramic (PAN 56c) — Closed up 2.75% yesterday after announcing that their joint venture with Drake in the Nordgruva and Lokken projects had received funding approval for the drilling programs at both projects. The program is to commence mid 2014.

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