The market is up 38. The SFE Futures suggested a 56 point rise in the market this morning.

The SFE Futures suggested a 56 point rise in the market this morning. The Dow Jones was up 0.6 — it moved in a 100 point range and closed just slightly higher following its big session on Friday that saw all three major indexes close more than 1% higher with the Dow Jones up 157. There was plenty of takeover activity, British company Rexam agreed to buy the plastic packaging business of Owens-Illinois Inc. for around $1.83bn and US Steel closed higher on talk that Thyssen Krupp was interested in buying the company. Homebuilders fell on concerns that higher interest rates would lower demand and energy stocks had a good session on the back of a higher oil price. The NASDAQ also had a quiet session finishing 0.1% lower.

Just about everything is up today, including resources which had a strong night in the UK overnight. BHP up 63c to 3351c and RIO up 128c to 9325c. Metals mostly down since Friday although all up overnight — since Friday Aluminium is down 0.4%, Nickel down 0.9% and Copper down 1%. Zinc up 2.8%. Zinifex up 28c to 1812c. Oil price up $1.15 to $65.93 after Iran’s oil minister said OPEC doesn’t plan to release more oil into the market ahead of its next policy meeting in September. Woodside up 16c to 4351c. Gold up $8.70. Newcrest up 2c to 2367c.

Obviously the main driver for us this morning has been the 157 point gain on Wall St on Friday (unchanged overnight) after the 199 point fall the night before. Our market fell 79 on Friday with real fears for a bond yield driven fall on Wall St on Friday, which didn’t happen. Not much in the diary for this week, on Wednesday we have the RBA Governor talk on the economy and March retail figures in the US but nothing really significant to look out for.

  • ANZ Banking Group (ANZ) up 33c to 2943c. They announced this morning that current Hongkong and Shanghai Bank CEO Michael Smith will succeed John McFarlane on 1 October 2007. A bit of a surprise — many were anticipating an internal appointment given the success of McFarlane’s strategy. Not looking for any change of strategy.
  • Macquarie Media (MMG) announced the acquisitions of two US community newspaper publishers (Superior Publishing Corp. and Grove Sun Newspaper) by their subsidiary, American Consolidated Media. The acquisitions have a combined enterprise value of $80.1m. MMG up 7c to 435c.
  • Multiplex (MXG) up 4c to 504c after their board announced they support a much anticipated $5.05 a share offer made from Brookfield Asset Management and that the Roberts Family will sell their controlling 26% shareholding into the bid for $1.1bn.
  • Following in the footsteps of Timbercorp, Great Southern Plantations (GTP) have announced they have also received a non-binding expression of interest in the company. GTP up 19c or 7.6% to 269c.
  • AWB (AWB) up 13c to 383c despite the AFR article this morning suggesting they are also going to lose their veto over bag and container wheat exports on top of the loss of the single desk monopoly.
  • ABN AMRO have upgraded their forecasts in WHK Group (WHG) from Hold to BUY after recent share price weakness on the back of a capital raising. They have a 282c target price. They offer exposure to wealth management, super trends, acquisition driven growth, 20% earnings growth and a PE of 19x. Yield 2.2%. WHG up 5c to 257c.
  • Fosters (FGL) up 6c to 650c. They have signed a $208m sale agreement with Frasers Property for the 5.8 hectares site of the former Kent Brewery in Sydney.
  • St George Bank goes ex dividend 82c tomorrow.
  • Rain everywhere is good for AWB, ABB, GNC, IPL and AAC – all up today.
  • Macquarie Airports (MAP) up 9c to 419c on the expectation they will soon receive a bid for their 45% stake in Rome airport.
  • Oxiana up 7c to 339c after a Merrill Lynch earnings upgrade of 10% on the back of higher copper prices. They still predict a copper price slump later this year. They have a NEUTRAL recommendation. They have upgraded on RIO by 7% and 8% as well (BUY recommendation) and BHP’s by 3% and 18%. They prefer RIO over BHP because of BHP’s nickel price exposure (they expect a nickel price correction).
  • Carbine Resources (CRB) up 9c to 36.5c (32%) on the back of some drill results.

We have an article in Marcus Today today looking at whether we should worry about the latest Bond market drop and another looking at the Crash of 1987 from a “desk’s-eye view” – we ask the question if we are in the same boat now.

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Peter Fray

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