The market is up 43. The SFE Futures suggested a 25 point rise in the market this morning.

The Dow Jones up 29.5 – It moved in a relatively narrow 50 point range and finished in record territory for the third consecutive session on the back of promising earnings results and better-than-expected economic numbers. The Labour department announced wages increased by a lower-than-expected 0.6% in the first quarter, providing some hope of an interest rate cut and positive earnings results from blue chips continued to impress the market. The Dow Jones is flying; it has now closed up 22 times in the last 25 sessions, its longest run since 1955, and has also managed 18 record closes since the start of the year and 40 since the beginning of October 2006. The S&P 500 index was also in the spotlight, it broke through the 1,500 mark, a level not seen since September 2000.

Resources are all surging ahead today. Metals all up overnight. Copper up 2.8%, Nickel up 2% and Zinc 4.1%. Aluminium up 0.7%. Oil price down 55c to $63.23. PetroChina, China’s largest oil producer announced it had discovered an oilfield with estimated oil and gas reserve of 1.02bn tons in Tangshan. Worth noting Berkshire Hathaway has over 2bn PetroChina “H” shares (or equivalents) in its equity portfolio. Gold up $9.30.

A little quiet today heading into the weekend, not much going on. The usual acquisition here and there, Property trusts and building stocks doing well.

  • The big news today is Norilsk Nickel trumping Xstrata’s bid for LionOre Mining (LIM). LIM is up 540c or 26.2% to 2600c. The move puts spice into the whole nickel sector. Not only are there two international predators around (one of whom will end up without a spouse) but it is also an endorsement of the fact that it is too hard developing projects at these prices and on the longer timeframes…better to acquire. The preferred stock has to be Jubilee Mines. PE of 12x. Churning out the cash. No wonder the share price is up 5%.
  • Alinta (AAN) up 7c to 1522c after AGL Energy (AGK) said this morning it is in talks with both Macquarie Bank (MBL) and Babcock & Brown (BNB) to buy the remaining 67% of the Alinta/AGL retail business should either of them acquire Alinta. AGK unchanged at 1562c.
  • Ansell (ANN) was down 1c to 1153c. It announced this morning that it will acquire Blowtex a Brazilian condom maker with around 20% market share. No price was mentioned but did say the deal was earnings neutral this year and accretive from 2008 onwards.
  • Centro Properties (CNP) up 20c or 2.1% to 974c after announcing it would buy Galileo Funds Management business for an undisclosed sum. It plans to review Galileo Shopping America Trust’s $2.7bn shopping centre assets by June 30.
  • Bolnisi Gold (BSG), Palmerejo Silver and Gold Corp. have agreed to merge with Coeur d’Alene Mines in a US$1.1bn deal. BSG down 7c to 323c, its stock is up 100% since last June. The implied bid price is a disappointing 335c and involves an offer of shares in foreign stock.
  • Progen Pharmaceutical (PGL) down 135c or 18.2% to 603c after announcing it would sell registered common stock in the US to raise US$32.8m and raise an additional $34.1m through a fully underwritten 1 for 9 Entitlement offer.

With takeovers left, right and centre in this market, we have compiled a list of companies that have had confirmed bid approaches and a list of those that have had rumoured bid approaches in the MARCUS TODAY stockmarket newsletter. We have also written up the “Nickel Boom” and highlighted the cheap resources stocks in this market. There is one stock in particular threatening to break out on the charts. Have the rest of the week off!

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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