The market is down 20. The SFE Futures suggested a 7 point fall in the market this morning.
The Dow Jones closed 5.6 down – It moved in a relatively large 176 point range and closed slightly higher on the back of better-than-expected consumer spending in February. The Dow spent most of the session in and out of positive territory as concerns of rising inflation and a weaker US dollar resulted in it being down 100 points during the session at one stage. General Electric and Boeing closed lower after the government imposed new tariffs on Chinese imports, increasing concerns that US exports will suffer due to trade tensions. The oil price had a big week hitting six-month highs on the back of political tension between Iran and the West and a 17 day strike between workers at the French port of Marseilles, Europe’s second largest oil terminal. It was a roller coaster quarter, the Dow Jones fell 0.9% and NASDAQ closed up 0.3%.
Resources dragging the market down today. BHP down 4c to 2985c and RIO down 31c to 7850c. Metals all up on Friday, Zinc up 0.2%, Zinifex down 15c to 1563c. Nickel up 2.1% and Copper up 1.5%. Aluminium was unchanged. Oil price down 16c to $65.94 despite tensions between Iran and the West persisting. It was the first time in eight sessions that the oil price went backwards. Year to date, oil price is up 8.2% (which is about what the oil price rose last week). Woodside down 37c to 3912c. Gold down $1.50. Newcrest down 22c to 1563c.
The S&P/ASX200 closed up 3.3% in March despite a short lived 6.5% correction at the end of February. The changes to the Media Legislation come into effect on Wednesday. We are quite literally expecting a number of deals to hit the market on Wednesday morning (if not before – why wait?). The market has started the week off pretty poorly.
- BHP announced the details of their off-market share buyback. They will be sending around $3.5bn of cheques out to BHP shareholders today, a lot of that money will find its way into BHP and the sector and it is probably the anticipation of that event that has caused the recent rise in BHP.
- Corporate Express Australia (CXP) down 19c to 610c after announcing it had completed a $90m off-market buyback, bigger than its original target of $50m.
- Fairfax (FXJ) up 8c to 506c after announcing it would sell two regional newspapers in the Newcastle region to alleviate the ACCC’s concerns and because of an overlap between the two groups in the area. Nothing significant…the company said it expected the sale to have no material impact on earnings.
- Veda Advantage (VEA) up 23c or 7% to 350c after its board recommended a 361c per share takeover offer from a private equity consortium led by Pacific Equity Partners and Merrill Lynch Global Private Equity. The offer values VEA at $814m on an equity basis and $963m on an enterprise value basis.
- Ventracor (VCR) announced its 100th implant of the VentrAssist left ventricular assist device. Done nothing for the share price up 1.5c to 94.5c.
- Publishing & Broadcasting (PBL) down 8c to 1977c after Melco PBL Entertainment (MPEL:NASDAQ) reported its FY06 results. Crown Macau is opening 9 May, while City of Dreams is on track but budget is likely to blow out. The stock remains on of Goldman Sachs JB Were top picks.
- Acrux (ACR) up 10c or 7.41% to 145c on the back of a US license agreement to sub-license rights and assets to ACrux’s skin spray treatment for menopause symptoms Estradio MDTS. Acrux is 12 months away from its US launch of EvaMist.
- The Boart Longyear (BLY) $2.5bn IPO which lists this week and is priced today and tomorrow has been dismissed as an AVOID by the Intelligent Investor newsletter. They say that “In a nutshell, the prospectus offers a ‘resources supercycle sales pitch’. But if the owners really believed that, they probably wouldn’t be selling”. It is being sold by private equity groups that bought it off Anglo American two years ago.
Go to the MARCUS TODAY newsletter to read about the important events this week. There is an RBA Meeting with the bond market pricing in a 40% chance of a rate rise. The market closes early on Thursday at 2.10pm and won’t re-open until Tuesday morning. Easter…in stockmarket terms…it’s bigger than Christmas.
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