The market is up 14. The SFE Futures suggested a 29 rise in the market this morning.

The Dow Jones was up 66 on Friday. It moved in a narrow 76 point range and closed higher ahead of the long weekend on the back of a heap of takeover activity. The NASDAQ exchange announced it was prepared to pay $3.67bn for Europe’s fifth-largest stock exchange OMX AB. The deal, if accepted, will be paid for in cash and shares and allow the NASDAQ to push into Europe after two failed attempts to acquire the London Stock Exchange Group, perhaps the reason why their shares closed 3.4% lower. Shares in Coca-Cola closed up (1.3%) after it announced it would pay $4.1bn for the maker of Glaceau Vitaminwater. According to TrimTabs, there have been around $32.3bn worth of deals this week alone and $270bn in announced corporate buyouts in the second quarter. Despite closing lower four of the five sessions, the Dow lost just 0.36% for the week, the S&P 500 was flat, closing 0.46% lower and the NASDAQ fell 0.5%. US Exchanges will be closed tonight for the Memorial Day holiday.

Resources all up today. BHP up 57c to 3123c and RIO up 231c to 9503c. Talk that RIO have appointed Deutsche Bank to advise on a potential bid for Alcan (who have been bid for by Alcoa in a hostile bid worth US$27bn). RIO have refused to comment on the story. Metals all up on Friday, Nickel and Copper up 2.8%, Zinc up 1.9% and Aluminium 1.3%. Zinifex up 38c to 1715c. They have put out a resource upgrade for the Rosebery underground zinc lead and silver mine. They have upgraded resources by 65% to 11.7m tonnes. Oil price up 97c to $64.59. The Nigerian government agreed to a 15% pay increase for all employees of the Nigerian National Petroleum Company, workers were ordered back to work after a two-day strike. Woodside up 51c to 4481c. The stock is up 25% since the start of the year. Gold up $2. Newcrest up 3c to 2192c.

A reasonably good start to the week. A rebound in metal prices on Friday has provided a boost for resources with some big rises in the pure metal plays that got hit so hard last week. A few things going on this week, Phil Burgess of Telstra makes a speech on Thursday. Wonder whether this Mum is buying the stock yet and Perpetual Trustees puts out earnings guidance tomorrow – in this market it surely has to be good.

  • The big news this morning is that CVC has pulled out of the consortium led by KKR (includes TPG, Carlyle Group, Blackstone Group and Bain) that is bidding for the Coles Group (CGJ) having been through the books in the last two weeks. Price now 1738c down 7c this morning. Coles peaked at 1795c this month. Seems the “tension” in the bidding has taken a bit of a dent. Still expect to see another bid sometime soon and then the debate will be how much earnings dilution Wesfarmers is prepared to take in the short term to fulfil its strategy in the long term.
  • James Hardie (JHX) down 5c to 889c after they announced OK final results this morning. They made US222.2m ahead of forecasts for $210m but their outlook statement is flat. Final dividend 15c making 20c up from 8c. No buyback announced. Price not inspired either way. Their outlook statement would not inspire hope for a North American housing market recover any time soon and that doesn’t reflect well on the rest of the sector.
  • APN News & Media (APA) up 9c to 596c after it announced it will pay non-franked final dividend of 20 cents a share for 2006, ahead of analysts’ expectations for a 16c dividend.
  • Lend Lease (LLC) have put out a market update this morning after presentations in Queensland on Thursday and Friday (so it’s in the price). There are 197 pages to get through. LLC up 21c to 1996c.
  • Paladin (PDN) have extended their offer for Summit Resources (SMM) to June 1st. They have 76.4% of SMM. PDN up 17c to 892c.
  • APA Group (APA) up 7c to 430c (35% owned by Alinta) after announcing a big US$654m capital raising this morning. APA have 10,000km of gas transmission pipelines in Australia and transport 40% of Australia’s LNG consumption.
  • Zinifex have put out a resource upgrade for the Rosebery underground zinc, lead and silver mine. They have upgraded resources by 65% to 11.7m tonnes. ZFX doing all the right things although it was expected. Price up 2% this morning.
  • UBS Warburg who have been advising Orica after its recent private equity bid approach at $32 have reinitiated research coverage today with a (predictable) BUY recommendation and a target price up from 2980c to 3650c. They say “ORI has solid fundamentals including strong earnings, returns and cash flow, and we believe there is still potential for management to pursue capital management and divestment strategies”. ORI at 3150c up 7c today. They were $27 before the bid approach and topped out just short of $35 after it.

In today’s edition of MARCUS TODAY, we have the second component to our two part series on Timeless Advice – five don’ts of investing from Philip L Fisher’s Common Stocks and Uncommon Profits.

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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