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Morning Market Report

A steady day on the markets on the last day of the financial year.

The market is up 12 points.

The Dow Jones was down 25 points at 16,827  —  The market opened lower and rebounded after higher pending home sales but drifted lower throughout the afternoon. Consumer staples was the best performing sector, and technology stocks such as Apple (up 1.0%) and Yahoo! (up 2.57%) also performed well. The technology heavy NASDAQ index managed to finish higher while the S&P was down one. The Industrials and Telcos were the laggards. Activity was well above average on the last trading day of the quarter and the market traded in a 69 point range.

US economic data was mixed —  Pending home sales rose 6.1% versus 1.5% expected but the Chicago PMI fell to 62.6 from 65.5 versus 64.3 expected.

European shares were mostly weaker —  The UK FTSE was down 0.20% and the French CAC was down 0.32% but the German DAX was up 0.18%.

The Aussie dollar was stronger and is currently trading at US94.32c.

Gold rose US$2.00 or 0.15% to US$1322.00c per ounce.

Oil was down US$0.37 or 0.35% to US$105.37 a barrel.

Base metals were stronger —  Copper was up 0.93%, aluminium was up 0.38%, nickel rose 0.59% and zinc was 1.27% higher.

Iron ore fell US$1.10 to US$93.80 a tonne.

Australian economic events today —  RBA board meeting and rate decision, Dun and Bradstreet business expectations survey, AiG performance of manufacturing (PMI) index for June, RBA index of commodity prices for June, RPData house price index

China  — Official Manufacturing PMI and HSBC Manufacturing PMI (final)

Dividends today —  eBbet Limited (EBT) 5.5c

Japanese data today —  Tankan survey.

Grain prices in the US were weaker last night after a USDA annual acreage report and quarterly grain and stock report results. July corn fell US 25 cents (or -5.7%) to US$4.17 a bushel, July wheat fell US17 cents (or -2.9%) to US$5.76 a bushel, July soybeans fell US49 cents (or -3.6%) to US$13.28 a bushel.

New Home Sales fell 4.3% in May, the first fall in five months. Sales for the three months to May are still 21.0% higher than the same period a year ago.

The TD/Melbourne Institute monthly inflation gauge was flat in June to be up 3.0% year on year.

Private sector credit increased 0.4% in May, led by household credit up 0.5%, and business credit was up 0.2% while personal credit fell 0.3%.

Euro zone inflation was 0.5% year on year in June, unchanged from May and below ECB target level of 2%. The ECB meets on Thursday.

STORIES

  • Carsales.com (CRZ 1059c) — Will acquire 50.1% Stratton Finance, a vehicle finance and insurance broker for $60.1 million. The acquisition will be funded by existing cash and a debt facility. Stratton has had EBITDA growth over 50%  per annum over the last three years Carsales expects the acquisition to be EPS accretive immediately. Stratton.com.au is one of Australia’s highest traffic generating vehicle finance websites with over a million visits per year. It offers a range of finance and insurance solutions for cars, boats, commercial vehicles, business equipment and property to personal, small business and corporate clients.
  • Macmahon (MAH 10c) has been awarded a $38 million, Two year contract extension at Newmont Mining’s open cut gold mine in Waihi, New Zealand. Macmahon will continue to provide a full range of open cut mining activities, including drill and blast, load and haul, crushing & conveying and construction of the engineered waste disposal dam. Macmahon has been on the Waihi site since 1998.
  • Origin Energy (ORG 1462c) and Karoon Gas (KAR 307c) —  PetroChina and ConocoPhillips have not exercised their pre-emption rights in relation to Karoon’s sale of its 40%  interest in exploration permits in the Browse basin, clearing the way for Origin to purchase the permits.
  • National Australia Bank (NAB 3278c) is talking to a number of global custody providers regarding the future of its NAB Asset Servicing (“NAS”) business.
  • Perseus Mining (PRU 41.5c) has provided details of further high grade gold intercepts recorded during recent drilling on the Bokitsi South Deposit at its Edikan Gold Mine in Ghana, West Africa. Managing Director Jeff Quartermaine said, “We continue to be very encouraged by the results from the Bokitsi South drill programme. A Mineral Resource upgrade and maiden Mineral Reserve estimate will now be prepared for the deposit and studies to assess the feasibility of bringing forward the development of the Bokitsi pit will commence.”
  • TFS Corporation (TFC 165c) — TFC has announced the acquisition of 364 hectares of established Indian sandalwood plantations for $35.0m. In a trading update, management also said product sales were strong they had executed investment agreements with UK institutional investor. They expect a record full year profit after tax result for financial year 2014 — up more than 25% to at least $70 million, and confirmed that “cash EBITDA” for financial year 2014 is likely to be broadly in line with financial year 2013.

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