The market has ventured into record territory again today and is up 12. The SFE Futures suggested a 28 point rise in the market this morning.

The Dow was up 8 overnight – It moved in a narrow 39 point range and closed slightly up for the eight consecutive session in what was a quiet day. It was the second day in a row that the Dow showed little overall movement as many are opting to stay on the sidelines waiting for earnings results to provide them with some type of guidance. Alcoa kicked off the 1Q earnings season on a positive note; it reported a 9% rise in profits after the market closed. Energy stocks had a good session after the oil price closed higher and the NASDAQ closed up as Apple Inc announced it had sold its 100 millionth iPod after just five and a half years of being on the market.

Resources are mixed. BHP up 22c to 3070c and RIO up 152c to 8332c. Metals mostly up overnight, Copper up 4.9%, Aluminium up 1.2% and Zinc up 3.2%. Zinifex down 7c to 1602c. Nickel down 2.1%. Oil price up 41c to $61.92 on the back of colder-than-expected weather in the Northeast of the US and Iran announcing yesterday that is has begun enriching uranium on an industrial scale. Woodside up 11c to 3923c. Gold up $4.60. Newcrest down 8c to 2411c.

Not much going on today… the market a bit stunned perhaps by yesterday’s 76 point gain. For those of us waiting for a correction there was an interesting piece from one broker this morning suggesting as much as $65bn could be making its way back into the market around June/July assuming the Qantas, Rinker, Coles and Rural Press deals go ahead and $13bn from the Future Fund gets invested. If you just work on dividends alone – before franking there is $3.765bn worth of payable dividends before the end of April and another $1bn paid out in May. AMP pays out $393m worth of dividend cheques tomorrow. RIO pays out $4378m on 13 April. PBL $203m on 13 April. IAG $236m on 16 April. For a full list go to the MARCUS TODAY newsletter today.

  • Coles Group (CGJ) hit a new record yesterday with many now tipping a bidding war after KKR consortium confirmed it has “ongoing interest” in CGJ and is confident of topping Wesfarmers’ (WES) 1647c offer. Merrill Lynch has come out this morning saying the numbers just don’t add up for WES acquisition of CGJ and that the conglomerate is acting like a private equity firm. CGJ up 6c to 1739c and WES up 1c to 3915c.
  • Telstra (TLS) down 2c to 483c. It is now on its year high. The ordinary shares yield 5.8% and the instalments 11.8%. Seems yield and franking are more important price factors than earnings these days. Broker spotted last month spruiking a target price to 600c.
  • The Building Material stocks are taking a breather today after receiving a significant boost yesterday from the new agreed bid for Rinker from Cemex. The bid is US$15.85 which adds up to 1977c (it was 1933c yesterday but the A$ hit a 17 year high overnight). The bid would return $16-18bn to RIN shareholders in cash….much of which is likely to find its way back into the other stocks in the sector. RIN down 4c to 1877c. CSR, BLD, JHX all worth a look on the charts – all seemed to “break up” yesterday.
  • Santos (STO) and Oil Search (OSH) have entered into an agreement with ExxonMobil and Nippon Oil to jointly progress a detailed pre-FEED study of a project based in Papua New Guinea. Hasn’t done much for their share prices. STO down 5c to 1022c and OSH up 6c to 356c.
  • UBS Warburg and Citigroup have upped their target prices on IRESS Market Technology (IRE) by 26% and 17% respectively after announcing yesterday the acquisition of IWL’s wealth management software unit VisiPlan.

We have an article about the 45 day rule in the newsletter today – it used to be something you didn’t need to worry about if you had less than $300,000 in the market… but with big tax efficient off-market share buybacks like BHP’s it is now a problem for almost everyone.

THE MORNING MARKET REPORT is provided by the MARCUS TODAY daily stockmarket newsletter. You can subscribe for a free five day trial here.

Peter Fray

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