The market is down 21. The SFE Futures suggested a 19 point rise in the market this morning.
The Dow Jones was up 38.9 – It moved in a 61 point range and closed higher for the second consecutive session on the back of takeover activity and lower bond yields. Coventry Health Care Inc. said they intended to take over Florida Health Plan Administrators for $685m, Hexicon Specialty Chemicals Inc. upped their offer for Huntsman Corp and the world’s largest derivatives exchange was created after shareholders of CBOT Holdings Inc approved the merger with Chicago Mercantile Exchange Holdings Inc. ConocoPhillips closed up 4.5% despite a 1% fall in the oil price, they announced a $15bn share buyback (tripled) and Alcoa kicked off the 2nd Q results season – they announced a slightly better-than-expected profit after market hours although the share price went from being up 1.7% in the normal session to down 1.3%. The NASDAQ closed up 0.1% and the S&P 500 finished higher for the fifth consecutive session.
Resources struggling today…BHP down 26c to 3857c and RIO down 124c to 10216c. Metals mostly down overnight. Copper up 1.6%, Nickel down 2.6% and Zinc down 0.1%. Aluminium was unchanged. Zinifex down 44c to 2088c. Oil price down 66c to $72.14. Woodside up 3c to 4723c. Gold up $7.70. Newcrest up 23c to 2337c.
The market has done the complete opposite to Wall St. and is down 0.5% early on. Property trusts all lower along with banks and most retailers.
- Woolworths 4Q sales numbers are out this morning – up 12.6% to $42.3bn for the full year. The quarterly number is up 9.6% which compares to most forecasts for a 7.0% to 9.0% rise. They have also upgraded earnings growth guidance for the year from 20-24% to 25-27%. These results were always expected to be good and the story was that WOW had brought the release of these numbers forward because they were good. The numbers reflect badly on Coles and Wesfarmers but we knew Coles was struggling against Woolworths with their eyes completely off the ball during the takeover. Woolworth’s gain is Coles’ loss. WOW is down 46c to 2859c – they are up from 2635c this month ahead of results. WES down 4c to 4132c. Coles up 10c to 1523c.
- Publishing & Broadcasting (PBL) up 15c to 1944c. Their Melco joint venture listed on the NASDAQ is up 11.6% since Thursday but is still down 32% from its listing price. One analyst suggested that a $1 movement in MPEL should theoretically represent a 33c movement in PBL’s share price.
- Cabcharge (CAB) announced their subsidiary, ComfortDelGro Cabcharge Australia, had acquired Toronto Bus Services. The deal also includes the Outer Metropolitan Bus System Contract. Not a bad acquisition, the Toronto Bus Services operates 80 buses and four coaches out of three Newcastle Region depots. CAB up 101% in the past 12 months and up 12c to 1272c today.
- Renison Consolidated (RSN) have attracted a bit of attention with a bit of a blip in the share price after a long decline. They have a speeding ticket response out this morning saying they have quarterly results coming up, are selling their Tom’s Gully gold mine in NT (shareholders vote next Monday) and that they are starting a drilling program in Northern Queensland. Other than that….don’t know why the price went up. RSN last traded at 9.5c down 0.5c today.
- Credit Suisse say that Orica (ORI) could debt fund acquisitions and buybacks up to $1.1bn and still maintain their BBB+ credit rating. They believe ORI will target a mining services company saying “We believe ORI has a clear preference for acquisition growth versus ‘active capital management”. ORI up 14c to 2994c.
- People Telecom (PEO) up 0.6c or 9% to 6.8c after announcing they had signed a major voice and broadband supply agreement with Crazy John.
- AMP have sold around 8m shares in Perseverance Mining (PSV) bringing their holding down to 71.7m shares or 10.06% of the company. Only another 71m to sell then. PSV unchanged at 19.5c. It is down from 33c in a couple of weeks.
- UBS Warburg significantly upped their iron ore, uranium, lead, copper and Molybdenum price forecasts this morning resulting in a number of profit upgrades for the likes of BHP and RIO. They interestingly suggest RIO will perform better into results in anticipation of some capital management initiative. Fortescue is up 3.3% today. They have Paladin as their preferred play in uranium. The PDN price is down from 1080c to 800c since February. The RIO capital management initiative suggestion raises the point that a number of resources companies that are throwing off cash at the moment are likely to have increased dividends, special, dividends, buybacks and maybe even the odd acquisition to announce.
- Zinifex taking a breather today after its run up from 1819c less than two weeks ago to a high of 2160c yesterday on talk of a bid from Oxiana. ZFX down 46c to 2086c.
The Rinker risk free arbitrage is still on the go although it has narrowed from 1850c last week to 1879c down 10c today. You can buy 2000 shares and sell them to Cemex at 1950c. There are still thousands of 2000 share trades going through in Rinker as people take advantage of it. If you want to know any details (and we are fielding a lot of questions) call the Cemex hotline – they are all geared up for it on 1300 721 344. Or visit Marcus Today on this link
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